Trade Like a Sage: Top 10 Characteristics of Successful Traders

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Principal Points

• Winning Characteristics of Successful Traders
• Helpful tips to support the development of these traits

The Key Traits Of Successful Traders

Well-honed trading skills and developing a trading edge comprise key elements in the quest for long-term success in the financial markets. For many, the most beneficial characteristics consist of appetite, commitment, and grit. Nonetheless, the ingredient to successful trading is to have the right blend of technical ability mixed with psychological characteristics.

Traders can spend hours, even months learning, but with the wrong attitude, this can be undermined. Here we will take you through the perfect mix of winning character traits that can guide the decision making process successful traders go through.

1. Patience & Discipline

Patience and discipline are entwined, and traders will be hard pushed to find an article or book that doesn’t stress these virtues. Nonetheless, achieving these traits consistently can prove difficult.

Patience presents itself at every stage of a trader’s journey. Patience in learning, patience with volatility, and patience in trades to maximize profits. Rome wasn’t built in a day after all. This couldn’t be truer when it comes to the financial markets. Traders shouldn’t be in a rush to profit, but rather develop discipline and consistency within their trading strategies and from here profits should accumulate.

What can help me in the development of this trait?

• Make goals and track their progress.
• Build a robust structure and strategic viewpoint around your trading and then apply the right tactics.

2. Humility & Humbleness

There are many reasons why traders fail, with greed and fear being two of the usual suspects. However, something that creeps up less often is pride or ego. The twin dangers of ego and excessive pride affect most traders at some moment and time. It is natural that after a streak of successful trades that egos inflate. The worst thing traders can do however is forget all their previous learnings and begin to think they are invincible. This is where the humble trader will triumph. They can see their weaknesses and can admit to the possibility of failure. They will avert from the “me against the market” attitude whereas ego or pride can lead to traders somehow trying to exercise their will over the market or even holding unnecessarily onto positions rather than suffer a loss.

What can help me in the development of this trait?

• Invest time in becoming more self-aware and realise when you make a mistake.
• Listen to and take on constructive feedback and ask questions.
• Avoid trying to be “perfect”. Flaws are part of life.

3. Positive Mental Attitude

It’s widely known that trading will surely not always play in the trader’s favour. Nevertheless, successful traders display a healthy dose of optimism regardless of their winning or losing streak. They train their mind to believe that downturns are temporary and have attained this self-belief by learning that they have the skills required to bounce back.

They also recognize that trading is a zero-sum game, made up of winners and losers. They will always visualize themselves on the winning side, irrespective of short-term results.

What can help me in the development of this trait?

• Always look for ways to clear your mind and develop objective thinking.
• Focus on long-term goals and identify the bigger picture.

4. A Sense of Internal Power

The duality of power and powerlessness is something every individual will face throughout their professional and personal lives. The worst thing we can do in situations of conflict is wave the victim’s flag. We should instead, take personal responsibility when things go wrong.

The very nature of trading demands investors to immerse themselves in uncertainty. This can lead to higher levels of stress and anxiety. Those emotions have a distorting effect on how you make decisions and perceive the environment around you. Prosperous traders develop various tactics to counteract feeling overwhelmed. Those tactics can include planning and reducing the need for “seat of the pants” trading. Blended with the management of personal resources such as time, physical and mental energy can help traders stay on top of their emotions as well as on top of the markets.

However, it is important to note that stress can also serve a purpose. Anxiety can help one’s creativity or productivity to flow.

What can help me in the development of this trait?

• Strike a balance of physical & mental exercises to help clear the mind. Read our “Good Health & Trading: The Perfect Duo” article to understand how healthy habits & trading go hand in hand.
• Avoid self-judgment and don’t act like the victim. Traders should take responsibility rather than seek pity.

5. Balance & Life Perspective

Traders enter the markets with the goal of making money and aiming to become financially independent. This does not mean they have to sacrifice a balanced and holistic life external to the trading arena.

For many, trading will become a huge part of their lives, and if other elements in their lives are off-balance this can affect their trading and vice versa.

Great traders perfect the fine art of balance to avoid allowing their trading to consume them. Instead, they make sure it is integrated into their daily lives.

What can help me in the development of this trait?

• Take a step back from time to time and make time for other life interests.

6. A Commitment to Learn

The rapid evolution of trading alongside the internet has created endless opportunities for those looking to get their feet wet in the financial market. Nonetheless, the digital age has also made it easier to fall into the trap placed on us by suave advertisements promising a “get rich quick” fix. What these messages fail to mention is that a trader’s best ally is knowledge. In all aspects of life, we learn to walk before we can run, and trading is no exception. Profits don’t come easy.
Great traders are not afraid of hard work, dedication and applying the proper educational preparation required to increase their ability to tackle the markets.

What can help me in the development of this trait?

• Avoid diving headfirst into trading.
• Prepare, make sure you continuously train and develop a learning plan for yourself so that you can maintain adequate trading knowledge.

7. Simple & Clear Planning

Without an adequate plan in place, traders will fall short. Planning and sticking to it gives traders a clear definition of their goals and how they will achieve them. Although your plan is there to be followed, it is not set in stone. As time goes on you will come across new strategies or techniques. You might also eradicate what isn’t working and adjust your plan accordingly.

What can help me in the development of this trait?

• Develop an approach for managing risk.
• Develop a trading plan and avoid placing too much emphasis on your day-to-day profit and losses.
• Place a great focus on attention to detail. Set parameters within your plan that can help execute trades more effectively.

8. Keeping a Record

A trading journal, or diary, is a log, and one of the most effective tools for managing and accessing performance. Efficient traders keep track of not only their trades but also their emotions and behaviors. This way they can effectively optimize strategies, manage emotions and adjust when things aren’t working. Maintaining records provides the knowledge you need to avoid repeating the same errors. But also, incorporating more of the tactics that did work into your new plans.

What can help me in the development of this trait?

• From the start of your trade until the exit, examine the session and all the surrounding data to assess your performance. This will bolster your confidence as a trader and set the stage for growth goals.

For a deeper understanding of how to keep a journal read our “Trading Journal: A Wise Direction Behind your Trades” article.

9. Adaptability & Resilience

This can also fall under the umbrella of “mental toughness”. Every trader will be faced with losses, but how they will bounce back will determine their long-term success. If you feel discouraged every time you are faced with hardship or the markets work against you, you will struggle to survive and compete against the big players. Successful traders are the ones who avoid thinking they know everything and have a willingness to learn. Mistakes are a trader’s greatest learning tool and losses are part and parcel of the trading game. How you adapt will determine if you win.

What can help me in the development of this trait?

• Keep a journal with not only trades but also behaviors & emotions.
• Practice developing clarity of mind and the ability to accurately assess your own actions.

10. Hype vs Reality

The rise of the internet opened many doors for traders. The internet has also however provided brokers with ample opportunity to entice prospective and new traders by promising the world. Traders need to be realistic and not believe the hype. Unfortunately, with the territory, you might stumble upon several trading scams and improper brokerages. It is important to research the broker of choice and make your own judgment. This will help determine if it is the right fit for your trading needs. Sage FX is devoted to providing a client-first service and this is why we place transparency, technology, and trust at the heart of our trading platform so that our traders can trade with peace of mind.

What can help me in the development of this trait?

• Conduct thorough research before committing to a trading platform, avoid believing everything you read and learn how to make your own judgment.

Conclusion

The most successful traders are proud of their skillset and have developed a real passion for the financial markets. Putting trading first and money second allows them to realize that uncertainty is inevitable and allows them to view the markets as a force of nature without an agenda. We are only in control of our own actions, behaviors and emotions. To ace the markets, we must realize that nobody is infallible and we all have predispositions and limits to cognitive abilities. Nevertheless, practice makes perfect. Start to take a personal inventory of the qualities that you need to work on and which of your strengths will help you rustle up the perfect recipe for trading success.