This week we’re going to look closely at the psychology of being a successful trader and identify the character traits that are necessary to maximise your profits.

At Trading College one of our motto’s is, “ANYONE CAN TRADE.” While this is true, there are definitely certain characteristics that are prevalent in the people who succeed in trading. Don’t worry if you feel you don’t have these traits at the moment, anyone can develop them. Some of them take constant work, even for the most successful traders!


Successful traders are disciplined. For example, they will dedicate time to setting up their strategies correctly. They will also stick to a set routine, often trading during the same hours every day and checking for macro-economic news every morning to see if there are any big announcements (but remember, as technical analysis traders we don’t trade the news, we trade the reaction to the news). Discipline is also important when it comes to not placing trades. At Trading College we teach “REASONS NOT TO TRADE.” You need a lot of discipline to stick to your plan, taking only high-probability trades and not overtrading.


In trading it is all too easy to get excited and jump the gun. Even when you’ve chosen a strategy, it can be very tempting to enter a trade too early, without confirmations. You need the patience to wait until your strategy tells you to enter the trade. The same applies to coming out of a trade too early. Successful traders set their targets and stick to them. They don’t lose their bottle and come out of the trade too early. Psychologically, it’s almost better to lose but know that you stuck to your strategy, rather than come out of a trade early because you got nervous and then miss out on bigger profits!


This is not the same as a positive attitude. Many people have a positive attitude, but to be a successful trader, you have to have a winning attitude; you must be comfortable with winning. It’s surprising how many people are more comfortable losing than winning; they will “win small and lose big”. Maybe people find it easier to have a losing attitude so that when they do lose it is not as disappointing. They are afraid of wanting success in case it doesn’t happen. Successful traders have no fear of success!


If you want to be a successful trader you cannot take any of your wins and losses personally. Truly successful traders are able to remove their emotions from the process. But this is one of the hardest things to learn to do! One of our top traders monitors his heart rate for fitness. Every time he places a trade, his heart rate goes up about 10%! Removing your emotions from trading is a long, on-going, but highly necessary process.


Most people, as they get older (and, ironically, more successful in other walks of life) seem to find it harder to learn new things. They cease to be humble. You have to be prepared to learn if you want to be a successful trader. Some our students have found that trading has been their most successful venture. When they learn to trade, they have the humility to take new information on board, they are not trying to second guess the trainers, assuming they can work everything out for themselves, which is what people who have worked at a more “senior” level tend to do. When you start to trade you are starting a brand new career and you need to start learning from scratch.


To be a successful trader, you need to be okay with losing money because you can’t always win. You also need the humility to accept when you are wrong. People with big egos don’t make great traders. You must stay humble. The markets will always be more powerful than you because they are free to move in any direction. Your job is to use your strategies to try and predict where the market is likely to go. But it won’t always go in the direction you expect, so you have to be comfortable with getting it wrong sometimes.


You must be flexible in your trading. Certain strategies work better in certain market environments. You might have a couple of weeks where your strategy works 90% of the time and some weeks where it works only 60% of the time, for example, because the markets move in cycles. You can’t rigidly stick to one strategy; you need a group of strategies to tailor to where the market is going.

The technical/practical aspects of trading (understanding your charts and indicators, and learning how to place and come out of trades, etc.) are only part of what you need to learn. Developing the right characteristics is as, if not more, important. Stay very honest with yourself, observe which of these character traits need to be developed in you and work on them. It’s all part of the essential learning process!

Further Reading: