Thursday , November 16 2017
Home / Forex Articles / The 8 Habits of Top Traders

The 8 Habits of Top Traders

The 8 Habits of Top TradersAt easyMarkets we know that human beings are creatures of habit. We perform at our best when we follow a structured routine that maximizes our productivity. As the great French writer Andre Maurois once said, “If you can create a habit, you can create a character.” It is therefore no coincidence that the world’s most successful financial traders have adopted certain character-building habits. Below are eight habits that have been honed and perfected by the world’s leading traders.

  1. Discipline

Everybody knows that discipline and financial management go hand-in-hand. Discipline in trading is the ability to follow a sound trading strategy and sticking with it no matter what. Discipline also entails not basing any of your trades on emotions or sudden market swings. These things will leave you chasing down a rabbit hole that inevitably leads to failure.

  1. Deep, critical analysis

In the financial markets, technical and fundamental analyses are what compel successful traders to enter or exit a position. Their trades aren’t based on what the herd is doing or what the experts are saying. Instead, they rely on technical analysis to figure out where traders are planning to buy and sell, as well as fundamental analysis to piece together the broader macroeconomic picture. Above all, they apply a combination of technical and fundamental analysis on each and every trade they make.

  1. Constant learning

If you ever plan on becoming a successful trader, be prepared to learn as much as you can about the financial markets. That’s what all the top traders do. They are constantly refining their strategies based on new information and learning new ways to profit. You’ll often find them reading anything and everything related to the markets. It’s this open-door approach to self-development that allows them to perform exceptionally well regardless of the broader financial and economic climate.

  1. Appropriate risk management

It’s no coincidence that the top traders are also exceptionally good at managing their risks. They don’t over-leverage their account and set an absolute limit on how much capital they’re willing to stake on one position. While successful traders are confident in their abilities, they understand that unforeseen risks lie beneath the surface at all times.

  1. Positive outlook

Perhaps the most common feature all successful traders share is a positive outlook. Sometimes this manifests itself as cockiness or extreme confidence. While we don’t suggest you go that far, always keep a positive outlook. After all, your life becomes what you think about most of the time.

  1. Think probabilities, not absolutes

One of the best ways to establish a healthy outlook on the markets is to think in probabilities, not absolutes. In trading, the laws of probability suggest that not every trade will be profitable. You should realize this as early on in the game as possible.[1] Instead of looking at trades as absolute winners or losers, ask yourself what the probability is that a certain trade will succeed. This will help you factor in the costs of trading each time you enter a position.

  1. Healthy skepticism

Successful traders don’t fall prey to get-rich quick schemes. They don’t believe in a “holy grail” of trading success. They’re also less likely to pay attention to the “guaranteed” picks promoted by the experts. Successful traders are too smart for that rubbish because they realize one important thing: they have access to the same information as everybody else. If that’s the case, why would you accept the dubious assumptions of others?

  1. Extremely motivated

Most people will tell you that highly successful people have a great work-life balance. But is this really true? Think about the world’s top investors, entrepreneurs and business magnates. How many of them operate on a neat and tidy 9-5 schedule? Can you think of any? Now, how many of them work for as long as it takes to achieve success? Virtually all of them. Keep in mind that we’re not telling you to ditch your personal life and spend 20 hours a day in front of the trading screen. What we are saying you need to be extremely motivated to succeed and should be willing to work as long and as hard as necessary to attain success.

Want to learn more about becoming a great trader? Get in touch with easyMarkets to get started.

Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).

[1] Justin Pugsley. “The 7 habits of a highly successful trader.” Mahi FX.

Leave a Reply

Your email address will not be published. Required fields are marked *