4. Mental Toughness
You could also think of this as being thick-skinned. The market will constantly throw losing trades at you, and you need to bounce back. If you feel discouraged every time you lose a trade, or your strategy fails to produce the result you expect, your life will be miserable. Losing trades are constant; most successful day traders will have losing trades every day.
The difference between a successful trader and an unsuccessful one is that most successful traders win slightly more on their winners than they lose on their losers and typically win slightly more often than they lose. If your wins are much bigger than your losses, you may only need to win 30% or 40% of your trades.
Other traders may win 60% or 70% of their trades, but their wins may be equivalent to, or only slightly larger than, their losses. In either case, losing trades happen. Daily profits can still occur despite those losses, but only if the losing trades don't discourage you. If losing trades cause you to lose focus, you're more likely to miss (or skip) the next trade, which could be a winner.
Losing streaks also occur. Traders must stay focused and rational through a losing streak and not let the loss of capital affect their judgment—which will make matters worse. It requires mental toughness to stay focused on executing your trading plan and realize when the market isn't providing you with good opportunities for your strategy.
A trader must withstand a continual barrage of punches from the market. Losses are a fact of trading, but it's how we act after some tough trades that make all the difference. After taking losses, move on, and continue following your trading plan. If you are following your plan, but you just keep losing, market conditions likely aren't right for your strategy. In that case, walk away until they are. Sometimes being mentally tough means making the hard choice of not trading.
5. Independence
Initially, you'll likely get some help with your trading, whether it's from reading articles or books, watching trading videos, or receiving mentoring. Ultimately, though, it's you who will place your trades and determine your success.
Eventually, traders must develop a sense of independence, no longer relying on others. Most traders choose this path because they find it to be the most profitable. Once you have a trading method that works for you, you don't want other people's opinions. You do what works for you, and that is that.
Other traders must learn independence the hard way. They bounce from mentor to mentor, or trading book to trading book, always feeling like they are missing something. Or the service they subscribe to shuts down, and now they have no idea how to trade because they relied too heavily on someone else. If you develop independence, taking responsibility early on for your education, profits, and losses, you won't have these problems down the road.
Independence isn't taking on the world alone. Get help whenever you need it. Independence is just developing a trading style that works for you (whether someone else helps you or not). Independence is about working to build a personal toolbox, so you can remedy your trading, instead of relying on others (who may not always be there when you need them).
If you are just beginning your trading journey, start developing your independence now. Take the information others to offer, analyze it for yourself, make it your own, and master it. That way, you don't need to rely on them anymore.
6. Forward-Thinking Trading
Day traders can't be stuck in the past. While day traders use data from the past to help them make trading decisions, they must be able to apply that knowledge in real-time. Like a chess master, traders are always planning their next moves, calculating what they will do based on what their opponent (the market) does.
As discussed in the adaptability section, the markets are not static. We can't say we will buy at a certain price in five minutes, and then ignore all the price information that occurs during those five minutes. Day traders are constantly planning their next action, based on new price information they receive every second. They consider different scenarios that could play out and then plan out how they will implement their trading plan (entries, stop loss, targets, trade management, position size) under each of those various conditions.
Talk yourself through what needs to happen for you to enter a trade. This self-talk will keep you focused on the price action, as well as reiterate your strategy within your mind. As a trade approaches, consider what could happen while you are in the trade (doesn't move, moves a lot or little, moves quickly for or against you, moves slowly for or against you), and how that will affect your psychology and trade.
Go through what you will do in each scenario so that you can quickly navigate the changing market conditions. That is forward-thinking, and with practice, it can become almost instantaneous.
Forward-thinking knows what you will do, no matter what happens. It allows you to act decisively, without hesitation. Have a defined set of protocols to use in rare but inevitable events, like losing your quote feed, for example. Forward-thinking takes practice and consumes a lot of mental energy at first, but the more you practice forward-thinking, the quicker and easier it becomes.
The Final Word on Day Trading Traits
Most day traders aren't born with all these traits, rather they possess a few and must work rigorously on the others. You can learn these traits, which is a positive thing because it means successful day trading is determined by you and not necessarily your genes. Some of us are prone to certain weaknesses, but we can offset these with strengths, which can help us mitigate the damage of our weaker qualities.
Take a personal inventory of what qualities you need to work on and what your strengths are. Ideally, take this inventory based on trading experience, since trading tends to expose vulnerabilities and strengths we didn't know we had. The personal inventory requires looking at your discipline, patience, adaptability, mental-toughness, independence, and forward-thinking
Source:https://www.thebalance.com/day-trader-traits-4025905
You could also think of this as being thick-skinned. The market will constantly throw losing trades at you, and you need to bounce back. If you feel discouraged every time you lose a trade, or your strategy fails to produce the result you expect, your life will be miserable. Losing trades are constant; most successful day traders will have losing trades every day.
The difference between a successful trader and an unsuccessful one is that most successful traders win slightly more on their winners than they lose on their losers and typically win slightly more often than they lose. If your wins are much bigger than your losses, you may only need to win 30% or 40% of your trades.
Other traders may win 60% or 70% of their trades, but their wins may be equivalent to, or only slightly larger than, their losses. In either case, losing trades happen. Daily profits can still occur despite those losses, but only if the losing trades don't discourage you. If losing trades cause you to lose focus, you're more likely to miss (or skip) the next trade, which could be a winner.
Losing streaks also occur. Traders must stay focused and rational through a losing streak and not let the loss of capital affect their judgment—which will make matters worse. It requires mental toughness to stay focused on executing your trading plan and realize when the market isn't providing you with good opportunities for your strategy.
A trader must withstand a continual barrage of punches from the market. Losses are a fact of trading, but it's how we act after some tough trades that make all the difference. After taking losses, move on, and continue following your trading plan. If you are following your plan, but you just keep losing, market conditions likely aren't right for your strategy. In that case, walk away until they are. Sometimes being mentally tough means making the hard choice of not trading.
5. Independence
Initially, you'll likely get some help with your trading, whether it's from reading articles or books, watching trading videos, or receiving mentoring. Ultimately, though, it's you who will place your trades and determine your success.
Eventually, traders must develop a sense of independence, no longer relying on others. Most traders choose this path because they find it to be the most profitable. Once you have a trading method that works for you, you don't want other people's opinions. You do what works for you, and that is that.
Other traders must learn independence the hard way. They bounce from mentor to mentor, or trading book to trading book, always feeling like they are missing something. Or the service they subscribe to shuts down, and now they have no idea how to trade because they relied too heavily on someone else. If you develop independence, taking responsibility early on for your education, profits, and losses, you won't have these problems down the road.
Independence isn't taking on the world alone. Get help whenever you need it. Independence is just developing a trading style that works for you (whether someone else helps you or not). Independence is about working to build a personal toolbox, so you can remedy your trading, instead of relying on others (who may not always be there when you need them).
If you are just beginning your trading journey, start developing your independence now. Take the information others to offer, analyze it for yourself, make it your own, and master it. That way, you don't need to rely on them anymore.
6. Forward-Thinking Trading
Day traders can't be stuck in the past. While day traders use data from the past to help them make trading decisions, they must be able to apply that knowledge in real-time. Like a chess master, traders are always planning their next moves, calculating what they will do based on what their opponent (the market) does.
As discussed in the adaptability section, the markets are not static. We can't say we will buy at a certain price in five minutes, and then ignore all the price information that occurs during those five minutes. Day traders are constantly planning their next action, based on new price information they receive every second. They consider different scenarios that could play out and then plan out how they will implement their trading plan (entries, stop loss, targets, trade management, position size) under each of those various conditions.
Talk yourself through what needs to happen for you to enter a trade. This self-talk will keep you focused on the price action, as well as reiterate your strategy within your mind. As a trade approaches, consider what could happen while you are in the trade (doesn't move, moves a lot or little, moves quickly for or against you, moves slowly for or against you), and how that will affect your psychology and trade.
Go through what you will do in each scenario so that you can quickly navigate the changing market conditions. That is forward-thinking, and with practice, it can become almost instantaneous.
Forward-thinking knows what you will do, no matter what happens. It allows you to act decisively, without hesitation. Have a defined set of protocols to use in rare but inevitable events, like losing your quote feed, for example. Forward-thinking takes practice and consumes a lot of mental energy at first, but the more you practice forward-thinking, the quicker and easier it becomes.
The Final Word on Day Trading Traits
Most day traders aren't born with all these traits, rather they possess a few and must work rigorously on the others. You can learn these traits, which is a positive thing because it means successful day trading is determined by you and not necessarily your genes. Some of us are prone to certain weaknesses, but we can offset these with strengths, which can help us mitigate the damage of our weaker qualities.
Take a personal inventory of what qualities you need to work on and what your strengths are. Ideally, take this inventory based on trading experience, since trading tends to expose vulnerabilities and strengths we didn't know we had. The personal inventory requires looking at your discipline, patience, adaptability, mental-toughness, independence, and forward-thinking
Source:https://www.thebalance.com/day-trader-traits-4025905
