The business of trading involves a lot of work, passion and discipline, and a trader needs a good knowledge and understanding of the mechanism of the financial markets to perform in his trades.
Taking into account the significant progress made by both the capital market and the money market, the success of a transaction no longer depends on luck, but only on trading education and emotional balance.
Education is the key by which every trader can lay the foundations of his own way of trading. Having the informational support well built, they can effectively capitalize on their potential, adapting their system based on the formed vision.
In this article you will discover more useful information about the activity of a trader, the fundamental qualities that a successful trader possesses and how you can prepare for this interesting job.
What does a trader do?
The trader represents the person who carries out transactions on the financial market, more precisely he sells and buys contracts at his expense or on behalf of a client. He can trade financial assets – shares, bonds, stock indices, etc. The name trader comes from the English term trade, which means trade/sale.
Its purpose is to acquire profit by initiating – changing – closing existing positions on the financial market. Essentially, the trader is the person who makes efforts to obtain earnings from each trading activity in order to increase the profit/ decrease the loss.
In order to achieve his trading goals, a trader needs to consider several aspects, including:
- Psychology specific to trading – psychology has a key role in a trader’s life, the nature of trading being probabilistic. Therefore, it is difficult to earn profit without an investment culture and action directions based on risk management. A failure in trading is the result of a wrong vision, focused on establishing a strategy with a high success rate. Today, in order to be successful, a trader must accept that any trade carried out carries a predetermined risk. At the same time, emotions are a strong factor of harmful influence on the decisions adopted.
- Money management – the financial market is under the sign of instability, this generates price fluctuations, which can impact trading activity even in a small time frame. Considering this aspect, the trader can significantly minimize his capital in the situation of a forecast established in the medium term, but which was affected by the sudden price fluctuation that appeared against him.
- Identifying the state of the market – the financial market can oscillate on an upward or downward trend. In this case, a technical analysis is required in which the dynamics of the price on the chart are studied in order to identify some influencing factors.
What qualities are necessary for a trader?
As in any profession, constant investment in education, professionalism and the desire to constantly achieve performance are the key aspects for a trader, but these things are acquired over time as you experience the activity of trading.
From a psychological point of view, to be a trader you need:
Discipline in emotion control
Discipline is the key to exponentially increasing a trader’s return. Regardless of the actions taken or the results obtained, it is important to be aware of the experience lived and to learn from mistakes or successes.
It is essential to know your mechanisms by which you operate. In this job you experience emotions that are difficult to manage during trading or when the results appear. Obviously, when you get a profit, you become optimistic and tend to make other trades quickly without a thought-out plan of action (overtrading). Self-knowledge is what teaches you to rationally manage your emotions and form your own beliefs.
Constant knowledge improvement
For novice traders, the activity of trading involves an emotional build-up and an immense desire to succeed. However, all the objectives can only be achieved in time, based on the experiences lived and the results of the actions taken. You cannot achieve financial independence without rigorous discipline and continuous knowledge development.
An important aspect is related to the continuous adaptation of the work system to the context of the capital market. So the trader must present availability of time to improve his analysis techniques.
By taking trading courses, he can update his knowledge, achieving a rethinking of trading strategies in correspondence with market trends. In certain analysis situations, many traders find that they cannot handle the pressure. In this context, lack of control can trigger wrong actions, changing the direction of a transaction.
Patience is one of the strengths of a trader. This reflects confidence in one’s visions and accuracy in the actions performed. Lack of rules and lack of preparation are among the main reasons why some traders do not achieve their goals. Thus, traders do not get profitable trades.
How can you become a trader?
To be successful in this job you have to know that everything depends on your will and the whole of your efforts. If you want a career in this field, you need to set clear goals from the beginning. You must gradually improve your discipline so that you form your own trading system.
Currently, there is no clear recipe for success in trading. However, we can talk about a combination of qualities such as patience, intuition, self-knowledge, etc. Only the truly passionate, who have a proactive attitude can discipline themselves more effectively. At the same time, they will be able to establish action strategies more quickly based on personal beliefs.
To become a trader, it is essential to develop an investment culture and understand the psychology behind trading. You need to learn how to:
- Manage the capital;
- You correctly explain market phenomena, reports, graphs;
- You build your own trading strategy;
- You reinvest the profit obtained, etc.
To understand this field, the solution is to turn to specialists who have expertise in the stock market, forex or finance. Learn from experienced traders the mechanics behind trading success.
To become a successful trader, the Vestor team provides you with numerous courses tailored to your needs. With the help of these courses you will be able to significantly develop your trading knowledge.
Thus, you will be able to form your own vision and adopt effective trading strategies. Sign up now!