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What Kind of Person is Best Suited to Trading?

  
  Education
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Great traders have a few personality traits that do give them a natural advantage.  That’s not to say you can’t succeed without them, just that it’ll be an uphill battle and a greater degree of reflection and self-correction will be required.  The trader with the best chance of success will be –

Independent.  Being happy with a good deal of autonomy will allow you to confidently execute your plan without needing 25 people to concur with your analysis.  Trading is a solitary game, and you need to be able to thrive on your own, to a large extent.  Support is great but when it comes down to it, it’s all up to you.

Decisive.  If you take hours to do something simple like choose a burger off a menu, the odds of you being able to see a trade set-up and coolly pull the trigger are greatly diminished.  Especially if you trade short time-frames that can be the difference between success and failure.

Insightful.  If a trader can honestly look at their skills, motivations and short-comings and actively work to rectify them, they have the tools to over-come nearly anything the market throws their way. (more…)

Three Motivations for Traders

  
  Education
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There are three motivations behind taking a trade: monetary reward, educational reward, and/or psychological reward. The first pays the bills, the second will pay the bills, and the last will prevent you from paying the bills.

Whenever I feel the pull of psychological reward, I have the voice saying “do you want to be a trader?” Letting go of the psychological need to take a trade or be right, is hard. Our brain does not know what money is. It listens in terms of chemical releases. Letting go of psychological reward is not easy. It is the most instantaneous form of reward.

The best way I know to give psychological power to money is to make a habit of seeing money as opportunity. Opportunity for financial freedom and opportunity to make another trade. The brain understands opportunity. This needs to be in balance as well.

If you are feeling the psychological pull, take a few seconds and answer the following.

Do I want to be a trader?
Did my last trade affect the thought process in an irrational way for this trade? (Need to be right, need to make my money back, I am invincible, etc.)
Can I get a better price or is this my best opportunity?
Am I seeing the whole picture?
As always, am I willing to accept the consequences of my action or inaction?

Be Responsible

  
  Education
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Be responsible for your own trading destiny. Analyze your trading behavior. Understand your own motivations. Traders come into commodity trading with a view to making money. After awhile they find the trading process to be fascinating, entertaining and intellectually challenging. Pretty soon the motivation to make money becomes subordinated to the desire to have fun and meet the challenge. The more you trade to have fun and massage your ego, the more likely you are to lose. The kinds of trading behaviors that are the most entertaining are also the least effective. The more you can emphasize making money over having a good time, the more likely it is you will be successful.

Be wary of depending on others for your success. Most of the people you are likely to trust are probably not effective traders. For instance: brokers, gurus, advisors, system vendors, friends. There are exceptions, but not many. Depend on others only for clerical help or to support your own decision-making process.

Don’t blame others for your failures. This is an easy trap to fall into. No matter what happens, you put yourself into the situation. Therefore, you are responsible for the ultimate result. Until you accept responsibility for everything, you will not be able to change your incorrect behaviors.

What's The Real Purpose of Trading?

  
  Education
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purpose-realThe real purpose of trading is not to make money. If that’s your goal you probably struggle with it a lot. But all of the following tend to work.

If you goal is to be a great trader, then you probably will do well.

If you goal is to use trading as a way to measure your self-development, then you will probably do well.

If you just love trading and that’s why you do it, then as long as you are willing to work on yourself you will probably do well.

Those, in my experience, are the key motivations that bring success in trading.

Be responsible

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #

Be responsible for your own trading destiny. Analyze your trading behavior. Understand your own motivations. Traders come into Future  trading with a view to making money. After awhile they find the trading process to be fascinating, entertaining and intellectually challenging. Pretty soon the motivation to make money becomes subordinated to the desire to have fun and meet the challenge. The more you trade to have fun and massage your ego, the more likely you are to lose. The kinds of trading behaviors that are the most entertaining are also the least effective. The more you can emphasize making money over having a good time, the more likely it is you will be successful.

Be wary of depending on others for your success. Most of the people you are likely to trust are probably not effective traders. For instance: brokers, gurus, advisors, system vendors, friends. There are exceptions, but not many. Depend on others only for clerical help or to support your own decision-making process.

Don’t blame others for your failures. This is an easy trap to fall into. No matter what happens, you put yourself into the situation. Therefore, you are responsible for the ultimate result. Until you accept responsibility for everything, you will not be able to change your incorrect behaviors.

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