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Successful traders who earn billions of dollars annually in the financial markets demonstrate a number of common character traits and well-developed skills. Before investing in this or that company, they study in detail the work of the enterprise "from the inside", its main principles. In addition, successful investors study the current market daily, trying to predict future trends and be among the first.
However, none of these abilities is as necessary as the ability of traders to control their emotions and maintain professional discipline.
The correct way of thinking of a trader
The stock market is a difficult arena even for experienced traders. These people buy and sell shares in a very short time to make money in the current market. This rapidly changing environment and the need for quick decisions can really worry day traders. Usually the most successful are those who demonstrate the highest level of calmness and professional discipline. Those who carefully work out their trading plan, strictly adhere to it and control the level of risk, not allowing personal emotions to cloud their judgment.
Why is self-discipline so important?
In the ever-changing world of the stock market, traders see stock prices rise and fall in real time every minute. Markets can go into the red zone almost instantly. For some traders, the moment when their assets become "red" causes a strong fear and a desire to get rid of unprofitable assets as quickly as possible.
These reckless actions are the result of banal fear. It should be understood that such an excessive reaction most often leads to inevitable losses, and traders who succumb to such emotions are less successful.
Fear is a natural reaction to a problematic situation, especially if it involves a lot of money. When expensive shares fall in price, investors and traders see this as a threat to their portfolio, and often react irrationally to the situation.
Successful traders do not make reckless impulsive actions. will overestimate his capabilities and make the most logical decisions, not succumbing to the influence of emotions. These professionals can anticipate their possible emotions and reactions and take measures to maintain their deals. This is not easy for most people, but a certain detachment is necessary to make optimal decisions.
How not to succumb to greed
Striving for greater profit and greater success is as harmful as fear. Traders who make a series of profitable trades in the market are often tempted to stay in the trade longer or increase the amount of the bet. However, sooner or later, luck can turn away from the "lucky one", and positions and potential profitability will move down. It can be very difficult to suddenly abandon valuable and successful deals. This is another reason why a trading plan is needed. Successful traders can develop their plans based on logical business decisions, and not on emotional attachments or sudden instincts.
Source Traders Union
