Virtually anyone can master the basics of trading, and lack of capital is not an obstacle for the average person, but are you cut out to be a trader?  Not everyone has the requisite skills and outlook, but anyone can transform themselves by modeling their behaviour on successful traders.  This article identifies the characteristics of successful traders.

If you don’t have these characteristics, you can choose something else to do, you can change yourself, or you can trade anyway, and risk being one of the many losers in this field of endeavour.

Firstly, successful traders understand the mechanics of the markets they trade.  They are familiar with price action.  Successful traders have mastered the tools that they need to use, whether it is technical analysis, charting or the use of specialised trading software or analytical software.  They have invested time into learning the skill of trading, by paper trading and watching the market.  They are prepared to actively manage their trades.They have developed and backtested a trading approach that has positive expectancy.  They have faith in the approach and can stick with it during the inevitable losing periods.

The successful trader is not looking for tips, or someone to hold her hand.  He thinks independently and assumes responsibility for his own trading results.

This trader has not immediately put themselves under pressure during the learning process. They have sufficient capital to trade without risking everything on one position. They don’t have to immediately make a profit to meet essential household expenses.

This trader has also disconnected feelings of fear and elation from trading results.  They retain objectivity in the face of large winnings.  With losses, they coldly execute stop loss strategies to preserve capital.  They no longer have emotional ups and downs based on their trades.

If you are impulsive, or like to “wing it” or cannot stick to a set course of action, then trading is not for you.  If you view trading as an exciting form of gambling, you are in the wrong line of work.   The best traders describe their approach as boring but profitable.  They have worked out a set of rules, which they methodically apply.

How do you become like the best traders?  Well, the technical skills can be learned through experience as with any other job.  The best approach is to use a paper trading model.  Many online brokers offer a facility to let you learn about trading without putting your money on the line.

The personal characteristics of being controlled, methodical and acting decisively and without fear or excitement are probably more part of a person’s psyche.  However, again these behaviours can be learned by someone who is prepared to become successful and work on themselves.

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