The Habits of Highly Successful Traders: Part 3

Well here we are. The final habit! In todays post we are going to discuss the 3rd habit that I have seen that successful traders emulate. This is an important one. It actually ties into the other two habits on patience and resilience. Because if you do not have this third and final habit. You will not be patient and you will not be resilient. 

Displaying all three together allows aspiring traders to cultivate success in the markets. We all know that trading is a very emotional business. The constant ups and downs in the market along with the news that the media portrays can make your mind spin in a million different directions. It can be difficult to decipher what is correct and what is incorrect. Both sides might actually seem to be right and have valid points! This really can throw your mind into a tailspin!

Experiencing these emotions is a natural part of beginning to trade. As traders we are constantly bombarded with a mixed perception of the markets and whether to buy or sell a given instrument. This makes trading very difficult. A million opinions are thrown at us and we have to decide which makes sense to us. Even with technical trading… one chart timeframe will tell us one thing and the other chart tells us a completely different story. One indicator tells us to buy and the other tells us to sell.

This all can become very confusing and make it difficult for you to develop consistency in the markets. This brings me to the third and final habit we are going to be discussing.

Objectivity

As a trader, you must learn how to take all the information you are bombarded with on a daily basis at face value. What I mean here is that you cannot let the different opinions you hear about the market effect you. You must remain cool, calm and collected. As a trader you cannot be affected by your emotions and you must become numb to all the other news you hear about the markets. What matters most is YOUR opinion and only YOUR opinion.

To illustrate the psychology of most investors I want you to take a look at the image below.

emoji Guide to investing.png

I am sure you can relate to the “Emoji” or emotional feelings of investing at the different market cycles as illustrated in the info graphic. Everyone starts as what is called “most investors” on the top of the image. This is a disastrous place to STAY. To be an emotional investor means you will never get rich trading and investing… to put it bluntly.

What you want to do is naturally gravitate toward the bottom. Where no matter what the market or your particular trade is doing, you remain emotion less (cool, calm and collected). Your long-term success in the markets is directly tied to your ability to not be controlled by your emotions. 

How to remain objective and poised as a trader

This is such an important trait that all successful traders have and I wanted to share with you a way that can help you become more present and objective before you begin your trading session.

What I would recommend you incorporate into your routine is a moment of presence. Being present allows you to remain objective and not judge the situation that is unfolding in front of you. It quiets your mind and helps you to relax. You are naturally brought to that state of objectivity through presence. Because your thoughts about what “should” happen are no longer controlling you. You release your opinion of what the market “should” do and instead you live and trade in harmony with what the market is ACTUALLY doing. You become an observer.

When you are an observer you are able to notice patterns within the market and exploit them. You don’t bring your biases from what the news or your friends from work are telling you the market is going to do. You remain in a state of balance. This is a fundamental KEY to your success. Developing a balanced mindset will ensure that you always take trades that are according to your trading plan. When you make trading decisions that consistently align with your plan… you are on the road to consistency in the markets.

If you missed the first part of the Habits of Highly Successful Traders… it can be found here. We also wrote the second part to this 3 part series which can be found here!

 One thing that has really helped me remain objective with my trading is implementing the use of trading robots. A trading robot has no emotion or bias about the current market condition. It just identifies trades and continues to execute no matter what is going on around it. By using this tool you to can develop a balanced perspective of the markets by only taking trades that are in alignment with your strategy. At DARA trade we have developed a robot advisor that assists traders in taking great trading setups based on a handful of strategies. The robot advises you of a great setup that is based on predetermined rules and you the trader make your decision on if you would like to take the trade or not. This is brilliant! You get the assistance of a trading robot to identify the setup with no emotions, exactly according to plan. While you the trader implement your market knowledge to actually execute the trade. To learn more about this system and join our telegram group click the button below!