Trading Educators Blog
Confident, Persistent, and Profitable
Are traders naturally born to trade? Can anyone learn to trade? What is the ideal psychological profile of the winning trader? At Trading Educators, we have tried to find answers to these questions, but definitive answers are often elusive. We keep trying, though. We've surveyed traders and interviewed them. And we have tried to analyze the interviews made by others. Our conclusion: There doesn't seem to be one way to trade, or one ideal trader personality. Consider one real trader, Michael Marcus. Rather than taking a calm, unemotional approach to trading, he often seemed to fall prey to his emotions. He made large impulsive trades - and lost. He sometimes let his emotions get to him to the point that he tried to use medications to gain control. His early experiences didn't permanently trip him up. He learned from his mistakes. His persistence won out, and he eventually learned to trade well enough to make a fortune.
Mr. Marcus was described as "aloof, almost withdrawn." This may be a useful personality characteristic for trading the markets. Aloof and withdrawn people tend to be focused. They may have difficulty dealing with people, but they are also likely to approach the markets with a single-minded passion to succeed. Mr. Marcus is also highly intelligent. He earned membership to Phi Beta Kappa at the prestigious Johns Hopkins University, and won a scholarship to attend Clark University for graduate school. This early academic success clearly gave Mr. Marcus rock solid confidence that carried over into the trading realm. When asked, "Did the thought ever enter your mind that trading was not for you?" Mr. Marcus replied, "No. I had always done well in school, so I figured it was just a question of getting the knack of it."
In our studies of traders, we have found that regardless of whether it is succeeding in sports, academics, or business, the people who develop unwavering self-confidence as a result of their early experiences are the people who persist, sharpen their skills, and master the markets. Mr. Marcus strongly believed in his ability to achieve financial success. But his success didn't come easily. He admitted, "I lost. It was the same old cycle of borrowing money and losing it." Despite making loss after loss, Mr. Marcus persisted until he was able to achieve profitability. At times, he lost over five times his yearly salary, but he kept trading until he gained a wealth of experience to trade the markets profitably.
Of course, not everyone has enough money to be able to lose five times their yearly salary. Even the loss of half a year's salary would be sufficient to put most people forever out of trading.
The markets are difficult to master. Many try, but few make it. Mr. Marcus' interview reveals one of the things it takes to succeed. A winning trader has confidence in his or her ability to succeed. Winning is never guaranteed, and may take the stamina of a marathon runner. It may be necessary to face setback after setback. You may get beaten down at times and feel like giving up. Your emotions may go up and down with your account balance. But in the end, you must believe in your abilities, and that if you put in enough hard work, you will achieve the success you have been seeking.
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