All traders probably have a dream to live in a high-rise near Wall Street, drive a Lambo, and spray cash left and right, at least at some point. But not all traders get there.
Everybody has an equal chance at the start of a trading carrier, but there are skills that take some people further than others. The good news is that you can master these skills with time and dedication (and yes, eventually buy a nice, shiny Lambo).
Without further ado, here are our top 7 skills that every trader needs to take their game to the next level.
1. Analyzing The Markets
If you want to be a master trader, you need to have extraordinary analytical skills. Without market analysis, trading becomes a gamble, and at that point, a trader can just as well try their luck at a nearby casino.
Thankfully, analytical skills are not something you are born with, they are something you gain with experience. Learn to read patterns in the charts and practice. Soon you will be able to balance the risk-reward ratio, make more successful trades, and lose less money in case of a mistake.
We put analytical skills on top for a reason. They determine the basic ability to understand market conditions and foresee trends. Traders that don’t have the best analytical skills let their emotions rule, and rely on luck.
2. Keeping It cool
Ups and downs are part of any carrier, but the trading takes emotional roller coasters to the next level. Every trader suffers significant losses at least once during their carrier. Sometimes traders lose and recover funds multiple times in one day.
To be a successful trader you need to be ready to take a hit. People who fall apart under stress have a higher chance to lose their money.
Staying in the game no matter what is essential. Even if you make a mistake there is always a way to fix it. Or course, it’s easy to be calm during a streak of luck. But to be successful you need to learn not to flinch even when everything seems to be against you.
3. Staying Focused
Trading is a diverse field. There are a lot of instruments, a lot of assets and opportunities.
And there are also a lot of ways to take a misstep. If you want to avoid them, focus on a single instrument and a limited number of assets. Choose one market and one strategy and poor all your focus into it.
With experience, you will learn to multitask and will understand how to venture out of your comfort zone. But at the beginning focus is everything.
4. Staying Disciplined.
Success in trading comes with experience and experience comes with time. Time, that you spend trading, of course, not lying on the sofa watching TV. Unfortunately, there is no way around discipline and hard work. The more you practice, the better you will get at trading.
Successful traders sometimes practice for hours even when they want to do something else, drive their Lambo, for instance. 😉
Staying motivated to trade after be difficult, especially after taking a loss. But don’t give and we promise, you will see improvements.
Here are a few tips on maintaining motivation:
5. Being Patient
You will feel those moments when the finger is itching to make a trade because nothing seems to be happening. But take our warning, taking action for the sake of doing something is dangerous.
Traders often have to wait for market opportunities. And sometimes a situation might feel like an opportunity, but if you insect the market conditions closer you will see that it’s better to wait some more.
So, if you are not sure about something, don’t rush a trade and wait until you figure out the situation. If you skip an opportunity it’s not a big deal, there will be more soon enough.
6. Controlling Emotions
Trading is about money (obviously) and people are programmed to take money matters close to heart. When you are about to gain a fortune, it is easy to let the emotions take over. But it’s also a good way to make a mistake. That’s why it is very important to identify emotions and keep them in check.
Here are a few most common emotions that can lead to missteps in trading:
- Anger. There is a pattern called ‘revenge trading’. After suffering a big loss, some traders dive headfirst into the game without analyzing their mistakes. They seek to get back the losses, but most often lose even more.
- Overconfidence. The opposite scenario: a trader is having a streak of fantastic luck and feels like it will never end. Unfortunately, it will. If it makes a trader careless, they are likely to make a mistake.
- Fear-of-missing-out. FOMO is one of the reasons traders lose money. For instance, a trader heard some rumor about a digital coin, and hastily buys it to out-compete others. Without proper analysis the chance of a mistake is high.
- Panic selling. It happens when the price of the asset is falling rapidly. it makes traders sell in haste, without considering the reasons and results.
- Greed. Although Gordon Gekko taught that Greed is the main driving force of the world, this emotion is very hard to control. It is a major threat to rational trading.
- Denial. Some people follow the same destructive pattern even if it’s clear that the market is against them at this moment. It’s a recipe for disaster.
7. Keeping Records
Keep a journal of all your trades. Make a note about your entry point and the reason why you bought or sold the asset. Mention everything that seems important and relevant to you, including how much you won or lost and what happened to the market later.
It may seem boring at first, but make record keeping a habit and stick with it. When you acquire a good amount of information, you will see how many insights about your mistakes and your right moves are in those trading journals.
And if you want to read a more serious and comprehensive article about trading, check out our complete cryptocurrency trading guide for beginners.
Originally published at Exscudo Blog. Check it out for more articles on crypto, blockchain, finance, trading, and technology.
