Today we would like to outline 5 MUST HAVE skills that are required to become a successful trader in financial markets.
Remember, these skills are essential for ‘Trading’ and not ‘Investing’. The latter is a different ball game altogether.
And by trading, I mean buying and selling of stock or other instruments on a short term basis in order to make profit due to price fluctuations.
The skills outlined below are not something you learn in a grad school or an expensive certification course, rather these are something you learn by experience and are equally important for many other things in life.
Ready to discover them? Let’s do it.
5 Key Skills required to become a Successful Trader
- Basic Calculation Ability– You should be able to do simple calculations in your mind. Don’t depend on your calculator to compute your SL or Target values, because by the time you do that it’s possible that the stoploss is already hit. Most of the calculations required in day to day trading are related to percentages and you can easily do it in your mind with little practice.
- Decision Making – You should be quick in decision making. If your system instructs you to close the trade when your stop loss is hit, then don’t give it another thought. This skill is heavily dependent on point 1 above. The more time you take is making decisions, more is the probability of failure because market won’t wait for your decisions. System trading can heavily improve your decision making process, as all your decisions will be rule based and not discretionary.
- Awareness of Market – You should be aware of the market you trade on so that you can keep an eye on the important events and their implications. However, stock specific awareness is not essential if you trade purely based on technical analysis, remember price discounts everything. Events such as quarterly results, monetary policies, union budget may have lot of after effects on the market.
- Computer Savviness – You must know how to operate computer and internet. Almost everyone has switched to online trading, and it’s impossible to trade without computer knowledge. And if you are pursuing something like Algo trading, you should have atleast an intermediate level computer skill. Nowadays even smartphones can help for trading as well as chart analysis.
- Winning Attitude – This is more of a life skill that is acquired gradually. Unless you have a positive attitude towards what you’re doing, you are never gonna succeed. For example, if you have already made up your mind that intraday trading can never be profitable, probably you’ll never earn a dime through it. Pessimists cannot be successful traders because they’ll always be cynical about the outcome of every trade, optimists in turn will look at the brighter side and hope for the best.
So what do you think? It’s easier than you thought, isn’t it?
Now introspect yourself and find out how many of these skills you already have, and how you are going to acquire the ones you don’t.
Feel free to comment if you are looking for any additional help to become a successful trader.