6 Traits You Need to Develop as a Day Trader
Episode 63 of the The Carter Farr Show podcast, hosted by Carter Farr, titled "6 Traits You Need to Develop as a Day Trader" was published on May 1, 2019 and runs 9 minutes.
May 1, 2019 ·9m · The Carter Farr Show
Summary
Day trading is not just about finding a strategy, practicing it, and then making oodles of money. Day traders develop certain traits, which in turn allow them to implement a strategy effectively, in all market conditions. When someone starts trading, it's unlikely they will possess all these traits. They may be strong in one, two, three, or even four of them, but might need to work on the other traits. That's good news. It means successful traders aren't born; they develop through arduous work focused on these traits: 1. Discipline Discipline is a key trait every trader needs. The market gives you infinite opportunities to trade. You can trade thousands of different products, every second of the day, yet very few of those seconds provide great trading opportunities. If a strategy provides about five trades a day, and stop losses and targets are automatically set for each trade, then there are only about five seconds of actual trading activity during the course of the day. Every other second is a chance to mess up those five trades, taking more trades than you should, getting distracted or skipping trades, prematurely exiting the trades you are in, or holding trades too long.2. Patience Patience is related to discipline. As discussed above, day trading (and trading of all types) requires a lot of waiting. When a trader is entering or exiting the market at inopportune times, they will often say "My timing is off." One could also say "My patience is off." Jumping into, or out of, trades too early or too late is a rampant problem among new traders. They simply haven't developed their patience enough to wait for the great entry and exit. This goes hand in hand with discipline, and you need to be patient until there is a call to action, then you need to have enough discipline to act without hesitation. 3. Adaptability You will never see two trading days that are exactly alike. This poses a problem when someone only looks at textbook examples of a strategy. When they go to implement it, everything looks different than it did in the example. Maybe there is more volatility, less volatility, a stronger (or weaker) trend, or a range. 4. Mental Toughness You could also think of this as being thick-skinned. The market will constantly throw losing trades at you, and you need to bounce back. If you feel discouraged every time you lose a trade, or your strategy fails to produce the result you expect, your life will be miserable. Losing trades are a constant; most successful day traders will have losing trades every day. 5. Independence Initially, you'll likely get some help with your trading, whether it's from reading articles or books, watching trading videos, or receiving mentoring. Ultimately, though, it's you who will place your trades and determine your own success. 6. Forward-Thinking Day traders can't be stuck in the past. While day traders use data from the past to help them make trading decisions, they must be able to apply that knowledge in real-time. Like a chess master, traders are always planning their next moves, calculating what they will do based on what their opponent (the market) does. As discussed in the adaptability section, the markets are not static. We can't say we will buy at a certain price in five minutes, and then ignore all the price information that occurs during that five minutes.
Episode Description
Day trading is not just about finding a strategy, practicing it, and then making oodles of money. Day traders develop certain traits, which in turn allow them to implement a strategy effectively, in all market conditions. When someone starts trading, it's unlikely they will possess all these traits. They may be strong in one, two, three, or even four of them, but might need to work on the other traits. That's good news. It means successful traders aren't born; they develop through arduous work focused on these traits: 1. Discipline Discipline is a key trait every trader needs. The market gives you infinite opportunities to trade. You can trade thousands of different products, every second of the day, yet very few of those seconds provide great trading opportunities. If a strategy provides about five trades a day, and stop losses and targets are automatically set for each trade, then there are only about five seconds of actual trading activity during the course of the day. Every other second is a chance to mess up those five trades, taking more trades than you should, getting distracted or skipping trades, prematurely exiting the trades you are in, or holding trades too long.2. Patience Patience is related to discipline. As discussed above, day trading (and trading of all types) requires a lot of waiting. When a trader is entering or exiting the market at inopportune times, they will often say "My timing is off." One could also say "My patience is off." Jumping into, or out of, trades too early or too late is a rampant problem among new traders. They simply haven't developed their patience enough to wait for the great entry and exit. This goes hand in hand with discipline, and you need to be patient until there is a call to action, then you need to have enough discipline to act without hesitation. 3. Adaptability You will never see two trading days that are exactly alike. This poses a problem when someone only looks at textbook examples of a strategy. When they go to implement it, everything looks different than it did in the example. Maybe there is more volatility, less volatility, a stronger (or weaker) trend, or a range. 4. Mental Toughness You could also think of this as being thick-skinned. The market will constantly throw losing trades at you, and you need to bounce back. If you feel discouraged every time you lose a trade, or your strategy fails to produce the result you expect, your life will be miserable. Losing trades are a constant; most successful day traders will have losing trades every day. 5. Independence Initially, you'll likely get some help with your trading, whether it's from reading articles or books, watching trading videos, or receiving mentoring. Ultimately, though, it's you who will place your trades and determine your own success. 6. Forward-Thinking Day traders can't be stuck in the past. While day traders use data from the past to help them make trading decisions, they must be able to apply that knowledge in real-time. Like a chess master, traders are always planning their next moves, calculating what they will do based on what their opponent (the market) does. As discussed in the adaptability section, the markets are not static. We can't say we will buy at a certain price in five minutes, and then ignore all the price information that occurs during that five minutes.
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