Stock trading is increasingly known as a great career option in which many can provide a great service to investors, make their fortunes, enjoy a high degree of autonomy, and sidestep many of the frustrations and aspects of gatekeeping associated with traditional jobs.
If you pay attention to the images that are typically associated with stock trading in the entrepreneurial space – and increasingly in the public consciousness at large – you will see that there’s a lot of emphasis placed on the glamorous side and are seen as part and parcel of being a successful trader. A jet setting lifestyle, an elegant wardrobe, sports cars, and so on. Yes this can be true – but as with all careers – your success depends on the value you offer to others – so keep this in the forefront of your mind.
While trading certainly can be very lucrative, and can allow you to enjoy a great level of autonomy and location independence, it’s important to point out that trading isn’t going to be the right path for everyone to take.
In order to be an effective trader, you need to cultivate certain skills, and you need to develop a specific temperament, the right personality and traits and the right attitude if you’re to succeed.
So, what skills and personality traits should you develop to be able to succeed as a trader? Here’s a quick look.
A willingness to learn and experiment, before diving in headfirst
Firstly, you’ll need the technical skills. Before anyone dives headfirst into actual trading and puts their money on the line, they should undoubtedly start off by opening up a paper trading account with a service like Webull, TD Thinkorswim, or Interactive Brokers.
Essentially, paper trading is simulated trading that doesn’t involve putting real money on the line – and it can be invaluable in allowing you to develop a feel for the process of trading, as well as learning how to navigate different situations, and take the right actions at the right times.
For many people, however, spending a significant amount of time on something like paper trading before diving headfirst into the “real thing” might seem flat out frustrating. Lacking the willingness to invest a lot of time in learning and experimenting, however, is one of the most important skill sets and personality traits for every aspiring trader to cultivate if they want to be effective, and avoid losing significant sums of money.
This will enable you to experience the highs and lows of stock trading and build one of the most important personality traits of all – resilience.
An analytical mind to constantly collect and study data
Easily one of the most fundamental skills that every trader needs to have – with regards to both their own temperament and the skills they cultivate – is an analytical mind, and the willingness to continually be collecting and studying data.
Many of the most effective traders out there essentially view trading as an almost algorithmic practice, and refine their abilities over time by meticulously recording what it is they have done each day, tracking the results they’ve obtained, and so on.
Contrasting current market developments to previous trends, analysing forecast data and cataloguing and reflecting on your own personal metrics are all part and parcel of what it means to trade effectively.
If you cut corners and aren’t as diligent as you should be with data collection and analysis, there’s a good chance that you will end up putting yourself in a situation that is essentially the same as unstructured gambling.
Self-control and stoic composure
Although popular media and culture portrayals of stock trading present it in a high octane light, with traders essentially being shown as rock stars who follow their gut to great riches, effective traders in the real world need a lot of self-control and stoic composure if they want to avoid ruining themselves, or making disastrous missteps that could cause them a big windfall.
It’s always going to be difficult to remain calm, and prevent yourself from being excessively swayed by your emotions when you are dealing with any pastime or practice that involves you putting substantial sums of your own money on the line. But you simply can’t afford to go all in every time you’re having an energetic morning, or to panic-sell at the wrong time.
As a matter of fact, you also can’t afford to hold on for too long before selling, out of fear or denial. There’s a careful balance and understanding to be struck.
Being able to take a step back and detach somewhat from your emotional reactions to things is essentially a prerequisite for being able to trade effectively.
Structure, organisation and self-discipline
If you are essentially disorganised, and lack structure and self-discipline in your everyday life, you are in no position to embark on a successful career as a trader.
As a trader, you need to be on the ball and highly organised all the time. You simply must be up early enough to plan and prepare for the day’s trading. You need to check up on what the market’s doing at regular intervals.
Having a haphazard or disorganised routine can be ruinous for a trader.
A client first attitude
If you’re a day trader, portfolio manager, financial advisor or in any other role that requires you to manage funds on behalf of an investor, your job is to make them a great return within the confines of the market and act with integrity – which in turn will help you or your firm to be financially successful. Savvy investors can smell an un-trustworthy attitude a mile off, so it’s important to be genuine and truthful in your actions, with your clients best interests at heart.
If you would like to learn more about becoming a Financial Trader, view our financial trading courses designed to help those of all levels of experience to gain the technical skills they need to be successful in this field.