If you are reading this article, then I will assume that you have probably already had some experience trading the markets.
There is an inevitable journey that most people take once they learn about the possibilities of becoming a financial trader.
Most people start off with books, to learn the basics and move on to youtube videos and maybe they attend a seminar where a professional salesman tells you how easy it is to make money trading, and how you can quit your job and become a trader and be your own boss.
It all sounds amazing and your adrenaline spikes up thinking about the possibilities. Incidentally, this adrenaline spike is a similar, almost identical emotion that most people face when they are trading with the wrong trading psychology.
Is it possible for anyone to become a trader, or are we wired to fail?
Let me begin by saying that in my opinion anyone with enough determination can be a profitable and therefore successful trader.
Of course, we are all built differently, including some people having a more ‘natural’ trading mindset that is already conducive for success.
However, it goes without saying that being a successful trader means breaking habits that are normal for every day people.
Trading is not easy! Are we wired to trade the whole day and go home without a penny to show for our work? Or even worse, to end up out of pocket for our day’s work?
Or are we wired to be able to endure that sort of demoralising feeling and then come back the next day as if nothing happened, smile and go again?
Well of course we are not…
The average person in a job does the work and they get paid for that work no matter how good or bad their performance is.
Who has the most natural traits for a good trading psychology?
If you are someone who has always taken calculated risks, (maybe have run your own business perhaps), then you are already aware of what it’s like to work with no guarantee of a pay.
How about handling pressure? If you have an income goal to hit and the market isn’t giving you an opportunity, are you patient and disciplined enough to wait?
How about when it becomes to being organised. Are you attentive to detail and do you complete tasks in a timely manner (such as filling in your trade journal), or are you haphazard in your approach?
Clearly, if you already have some experience of taking calculated risks, can handle pressure, are organised and disciplined, then you already have some traits that are needed to trade successfully. This is the reason many professional sportsmen, or former army officers can move over into trading because they have already got the training they need to trade successfully.
Our natural human ways are not wired for us to become traders. We must do the opposite of what feels natural, which is why so many people struggle to be successful. In almost all cases, you have to go through a journey of personal transformation.
You can become an expert in doing technical analysis and predicting where the market is going to move, but this alone does not guarantee that you will make money. If you don’t build the foundational traits of a successful trader then you will fail, no matter how much knowledge you have.
The only way to succeed is to work on creating small habits every day and ultimately changing your actions from what feels natural. If you can do that consistently with small steps every day, you will transform into the right person that will give you the best chance of succeeding at trading. If you don’t do this and you only concentrate on strategy, then your chances of success are limited.
For further learning I would recommend a great book by Mark Douglass called ‘Trading in the Zone’. A must-read trading psychology book. If you are looking to take it a step further, then you can read more about the LTI trading psychology programme, by visiting: londontradinginstitute.com/trading-psychology-course/