In the latter half of the 20th century is when we were introduced to the idea of multiple intelligences and that was trading personality when people actually came to realize that not all people are suited to do one type of task and that people have different types of gifts that they can manifest in different professional manners. The same is true for trading and engagement in the financial world.
There are certain people and certain personality types that are more suited to the trader world and the trading life. For some people it is a given. Perhaps some people thrive under heavy pressure and risk and so they can do great as scalpers in the forex market. While others might prefer the safety of a sturdy harbor that is not rocked by waves. Well for these people long term and more reliable forms of trading are more suitable.
In any case and with any type of personality, you can still create a professional trading personality by following certain steps. And that is exactly what we are going to cover in this article.
What is the role of trading personality?
How is personality related to trading anyway? There is a clear and direct relationship with the type of personality that you have and your trading tendencies and ultimately the result of your trading process.
Different financial markets and trading under different conditions and with different trading styles or approaches require various forms of personality. This is how personality is directly tied into what kind of a trader you are and how well you can execute trades under different conditions.
For instance, the forex market is a highly dynamic market with a lot of small fluctuations. While at the same time the market remains without extreme and large movements, there are tons of small changes in the price of different foreign currencies. One type of trading approach that works well under such conditions is scalping.
But scalping is one form of high frequency trading in which trades are opened and closed within minutes or even seconds. So you can imagine how high pressure this form of trading really is.
In order to be successful in this form of trading, the trader needs to be a risk taker. You need to be able to thrive under the high pressure of the market and make the right decisions that will lead to profits.
Whether it is scalping the forex market or sniffing other financial markets for the best trading or investment opportunity, your personality will have an absolutely consequential impact on the outcome of your trading process.
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Is there a special “trading personality?
Now that we know and understand that your personality is directly impacting the outcome of your trades, the question must be asked, “is there a special type of trading personality that you need to have or cultivate?”
The answer is a bit hazy, because it can be both yes and not. In fact, it is both yes and no.
You see, no matter what type of personality you have you can engage in financial markets as a trader in one form or another. So for any personality type there are different choices and styles and trading. This means you don’t have to worry about having a certain type of personality to become a trader in the first place.
However, on the other side, there is a general type of personality that is more suitable for a professional trader. Now keep in mind we are talking about an overall personality type and we are not considering small personality traits.
This is because as a professional trader, you need to have strengths in certain areas that are crucially important for the positive result of trading. Read along to find out how you can develop your professional trading personality.
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How can you develop your personality as a trader?
As a trader you need to have a powerful discipline that can guide you through tough times and keep you motivated under any condition. The market can go through many ups and downs. In order to keep your composure and level head as a trader, you must have a lot of discipline.
Two ways that can help you grow your discipline are creating a trading journal and also a trading plan. The trading journal will help you keep a track on all your trades through sheer force of discipline. And a trading plan will also keep you within strict frames for trading so you do not go astray from the straight path you have for yourself.
Learn how to be patient
Waiting for the right moment to take action in any financial market can take quite a bit of time. In such conditions, acting hasty can lead to loss or a lost opportunity. So you need to learn how to be patient so that you do not leave the position too early and also you do not lose hope too soon.
Try to think logically
Some of the most damaging things in trading in any financial market are destructive human emotions. Among these emotions, perhaps the most destructive are fear and greed. Fear can lead you to losing profitable opportunities and greed will cause losses by not pulling out when you should.
The way you can keep your trades safe from all destructive emotional thinking is through remaining logical. In any situation and under any condition, try to remain as logical as possible.
Grow your confidence
While being disciplined, patient, and logical are all extremely important for you to have a professional trading personality, you also need to be a bit of a maverick!
Even though you should be careful not to get carried away and become overconfident, having a healthy level of confidence is a must in trading because sometimes it takes guts to make moves and step into the heat of the market to reap benefits.
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A professional trader has certain character and personality traits that can help him or her in the process of trading and leading to profitable trades. In this article we discussed the idea and the link between perishability and trading and we also showed you some actionable advice and tangible steps to follow to develop a professional trading personality.