10 Elements of a Winning Trader’s Psychology
Struggling with binary options trading and trying to figure out what separates the winners from the losers? Sometimes it is said that failure is simply the absence of success. In other words, if you are failing at trading, you simply haven’t won yet. What makes you win? Determination, and the resourcefulness and insight which come out of it, along with patience and a great work ethic. If you are having a hard time with practical hurdles, like enough money to start a larger account, those factors can also make it difficult to move from failure into success. The internal traits of a winning psychology can assist you in overcoming those obstacles though, and ultimately are far more important.
This is probably the single biggest factor which divides the winners from the losers, not just in trading, but in any other walk of life. Yes, it pays to have money and time on your side, but you could have all the money and time in the world and still fail at trading if you do not have the drive to do well at it. On the other hand, you could have a lack of resources, but have a greater chance of success because you have the drive to win. That drive will help you preserver when the going gets tough.
Closely related to determination, this is the quality that keeps you from giving up when you are struggling. It is the ability to continue to follow through, even when you want nothing more than to throw in the towel.
This is one of the most important characteristics that a trader can possess. Patience not only is key because of how long it can take to become a successful trader, but also because it keeps you from making poor trading decisions like taking bad setups or investing too much of your bankroll.
This is the trait that keeps you focused and working when you would rather be doing something else. It is a kind of “override” on your other emotions and desires, and allows you to push yourself beyond your normal limits.
Pushing yourself beyond your limits is often an indispensable ability when it comes to achieving great success, but so is having the poise necessary to step back and take a break when necessary. If you push yourself too far, you can easily burn out. A trader with balance will make sure to rest, get plenty of sleep, spend time with loved ones, and relax and think about things other than trading now and again.
For some traders, resting and relaxing may be a given, but for others, it is easy for that discipline to turn into a tyrannical force. Ironically, it takes a different sort of discipline to keep that quality in check and to live a full and balanced life. You cannot exercise sound judgment if you do not have a clear and healthy mind and body.
Curiosity is a great trait for a trader because it takes you in new directions. When you were a child, you probably remember asking dozens of questions a day, or even more. How many questions do you ask a day now? The more curious you are, the more you expose yourself to new material and learn.
Being curious about trading will help you expand your knowledge. Being curious about other subjects will lend perspective. Often times insight comes when we least expect it. The more you engage your brain, the more connections you will make between different topics within trading and beyond. These connections can give you the edge that you are looking for. You can even test brokers before jumping on board.
As a trader, you are always facing chaos and uncertainty. The more often you deviate from your path, making massive, abrupt changes to your activities, the more chaos and uncertainty you introduce into your trading. When you are consistent, you reduce chaos and uncertainty, and introduce control and predictability. That is how you move from failure to success.
I do not want to imply that you should be a “risk-taker” and not a cautious trader. You actually need a balance of risk-taking behavior and caution to succeed. But you cannot be entirely risk averse and hope to make it in binary options. Every time you embark on a new path in life, and start a new professional journey, you are risking failure. And if failure is the non-presence of success, you are going to face your personal demons along the path. You need to prepare yourself for that if you are going to make it.
A trader who can admit his mistakes to himself and also recognize his positive traits is one who is likely to succeed. Honesty gives you clarity, and clarity allows you to make sound decisions which have a basis in reality. If you do not know yourself and cannot be honest with yourself about your trading activities, you cannot see what is going on. Imagine getting into a car blindfolded, turning the key, and driving out into rush hour traffic. That is what trading is like if you are dishonest with yourself. Another good metaphor would be driving drunk. An inebriated driver has no idea whether or not he is even making mistakes, and does not hold himself accountable from his actions. Stay sober and check your windows and mirrors when you trade.
This may not sound like the most obvious trait to list, but I absolutely believe it is a necessary ingredient of success. Generosity allows you to share your knowledge and your experiences with others. The flip-side of the coin is gratitude. You should be thankful for the knowledge and experiences that other traders share with you. Traders who work together and leverage their shared experiences are more likely to succeed than those who isolate themselves. Be part of a community and give something back, and you are positioning yourself for greater success.
What should you do if you do not have these personality traits? Don’t fret or get down on yourself too much. Not many people are born with all or even many of these qualities in abundance. Like trading, they are something you learn along the way. And they all start with determination—the will to become better and to win. Honesty is another core quality which will drive success. Combine your willpower and your honesty and you will probably start to cultivate the other traits on this list. Keep studying and testing, and as you do, you will continue to improve.
Do research to find out more ways for you to be successful – not only in binary options but overall.
Photo credits: Determination