Character Traits of a Successful Binary Trader

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Character Traits of a Successful Binary Trader

Binary options trading is an activity which requires the development of a few peculiar character traits in every trader who trades the markets. The market has some unique features which can only be exploited to the trader’s favour when these traits are developed.

The successful trading of binary options is partly technical and partly psychological, and it is a mix of various character traits which binary options traders need to have in order to succeed. Let us look at these character traits one by one.

Technical abilities of a good binary trader

To illustrate this point, let us use a popular game: soccer. To be good at soccer, you must have the following skills: speed, dribbling ability, awareness, balance, ability to hold the ball, passing, etc. Without these skills, an individual cannot play soccer.

Some players will have more of a particular skill than others, and some playing positions will have a demand for one or two skills more than others. Then there are some basic skills that every soccer player is expected to have.

Lionel Messi is a better dribbler than Tim Howard, a midfielder requires more of dribbling skills than a defender, and every footballer is expected to know how to pass the ball.

It is the same way with binary options trading. No two traders have the same trading styles or profit goals, but all binary options traders have a common goal: to make profit. Some traders will have more capital than other traders. Some traders will have more technical knowledge than others.

What separates one binary options trader from another in terms of technicality and skill in trading are the following character traits:

  • Inquisitiveness
  • Ability and willingness to learn
  • Attention to detail
  • Practice

A trader who is inquisitive is one who asks questions. Such a trader is not just satisfied with seeing something happen in the market. The inquisitive trader wants to know WHY and HOW that event occurred. For instance, I have met lots of traders who never bother to find out why they suffer losses in trades. Many attribute losses to the use of a defective strategy and simply discard one strategy in favour of another. This is wrong practice. There are several occasions where a perfectly good strategy is used wrongly and so does not produce the desired result.

Inquisitiveness goes a long way

Binary option trading is unique in the sense that trades do not have forever to recover from bad entries or poorly timed exits. A trade made with a good strategy but with an expiry time set all wrong will end badly. Rather than set aside a strategy simply because losses are being sustained, the inquisitive trader will step back and go through each trade to identify whether there are areas where things could have been done differently. As Thomas Edison once said after so many failed experiments, he had discovered thousands of ways not to make an electric bulb. We all know how the story ended. The world would still have relied on candles for lighting if Edison had quit.

Ability to learn new things quickly

Hand in hand with inquisitiveness goes the ability to want to learn. There is always something to learn in the binary options market and indeed in all financial markets. There have been occasions when something new has always come up in the last few years which have impacted the market: the various quantitative easing programs, setting of negative exchange rates (ECB and SNB), minimum peg in the EURCHF, etc. These are all events which were quite novel in the market and are market movers which create trading opportunities.

Attention to details

Attention to detail is another character trait of successful binary options traders. Just before a trade is initiated, several parameters are shown: expiry time, trade amount, market price, type of trade, asset to be traded, etc. A trader should check all parameters to see that they reflect the trade to be made and that there are no errors. So many traders make wrong entries due to lack of attention to detail. Attention to detail will also enable the trader implement strategies according to the parameters and rules on which they have been built. This is also a necessary trait to develop if you are following a signals service.

Practice makes perfect

In order to succeed in trading one must practice as much as possible. Similar to professional footballers if a trader stops practicing and honing his skills he will eventually lose them. There are thousands of strategies that can be used but it’s best to pick a few that work well and practice them relentlessly on a demo account or paper trade (noting entries and their expiry times in a notebook) until they become profitable. Needless to say, practicing requires time and a certain degree of psychological and physical devotion.

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Psychological traits of a successful trader

We know that good strategies that can predict the behavior of currency pairs to some degree of accuracy are required to profitably trade binary options. However, strategies are not marionettes. They must be applied by human beings, and errors can come from the human aspect. There could be errors of judgement and errors of implementation. These are all psychological factors.

Trading is highly psychological because it is all tied to money, the very center of human existence.

The ability to function as a human being depends of stuff which are bought with money. Loss of money will therefore produce bad psychological feelings, while addition of money to the individual will stir up great emotions. These emotions can produce good and bad outcomes. It is not all the time that good emotions will produce good outcomes, just as failure in the markets is not always a bad thing. It is all about acquiring the following traits:

  • Self-control
  • Caution
  • Boldness
  • Patience

Self-control is necessary to succeed

Self-control is that trait which allows good emotions to produce good outcomes. A trader who is on a winning streak can easily get tempted to scale up trade volumes beyond acceptable risk levels in order to land that one big payday. Many accounts with several winning trades have been taken out by one huge trade gone amiss. Self-control keeps the trader in check; using only acceptable risk levels to compound profits.

Caution, well balanced

Caution can be a good thing. Here, we are not talking about the kind of caution which paralyses traders from taking clear opportunities. Caution here is all about taking care to filter out the best trades.

Boldness when needed

Rather than get paralyzed by several losses, a bold trader is one who is not afraid to make the trade when the opportunity presents itself to profit. It also takes boldness to recognize a failing trade and use the Early Closure function to kill the trade off and conserve capital.

Patience is a virtue

Patience is one of the best character traits a trader can develop. Many bad trades are screened out by patient traders, who prefer to wait for clear opportunities rather than nebulous ones. Some of the strategies described on this blog are those which require patience for them to setup properly for the trader. Trading is a lifetime event. Once trading skills are picked up, they stay with the trader for life. There will always be a profitable opportunity in the binary options market, so if no opportunities are seen for several days at a stretch, do not worry. Patient dogs will always get the fattest bones.

Character Traits For Successful Traders

One of the most overlooked aspects of trading binary options is psychology. You’ll find fewer resources dedicated to this at this point in time than pretty much anything else, which should tell you something about the mindset that a lot of people approach binary options with. Most people who trade binary options are gamblers who are going to blow their bankrolls overnight and be out in the cold the next day. If you’re serious about succeeding as a trader, however, you’re going to have to start by examining your own personality and traits.

Consistency Is Key

One of the most important traits you can develop as a trader is consistency. If you’re not consistent in your actions and choices and the basis for those choices, you’re not going to achieve consistent success. You might achieve intermittent success, but eventually you will lose everything since you’re relying too much on luck. Consistency requires that you come up with trade rules that have some specific basis; that you test those trade rules and see how they work before going live; and that you then continue to use those trade rules when you trade in real life. Making arbitrary decisions only results in arbitrary profits and losses. Adjust your methodology as needed when the market changes, but do so with specific reasons and testing behind your decision, not because you’re arbitrarily changing things.

Discipline And Motivation

In order to trade consistently, you’ll need to be disciplined and motivated to do a lot of hard work. No one becomes a successful trader overnight—not for the long term. Would you rather have one huge win and then blow all your money, or would you rather have a lot of small wins which eventually add up to something huge you can hold onto? This will also take a lot of patience. Most people who trade successfully in any market take years to get there—that’s right, years. When you see advertisements which say, “Turn $500 into $50,000 in 1 week,” those advertisements are aimed at people who are not going to succeed.

Honesty Is #1

The most important quality in a trader is probably honesty. If you can’t be honest with yourself about your strengths and weaknesses, you have no way to improve. There is nothing wrong with gambling purely for the sake of entertainment, and budgeting your gambling money as entertainment money. There’s also nothing wrong with deciding to trade seriously and professionally with plans to do so over the long term.

There is a problem when you’re a gambler but you’re telling yourself that you’re a pro. That’s the kind of thing that leads to foolish financial decisions, like spending money which you need to get by on something which for you is ultimately a form of entertainment. There is a problem when you tell yourself you’re a market expert and you’re not. So start out by asking yourself why you really want to trade, and if you have realistic expectations. Always know what you want and what your real strengths and assets are before you start investing your money.

Successful trader’s character traits.

Trading is one of the most exciting and profitable ways of earning at home, which brings substantial income (basic or additional) to many people. All this is undoubted, however, with all the apparent ease of learning Forex is not so simple. To become a successful trader, you need to know and be able to apply the basic principles of the financial market, quickly navigate in a changing environment and, oddly enough, do not give vent to the excitement.

Is trading a game or a job?

Financial and news portals in the last decade have been filled with advertising games on exchange rates. Forex and other online trading offices lure visitors with promises of golden mountains, bonuses for account replenishment, but in practice, everything turns out to be not so rosy. Having tried their strength on a demo account (and this is at best), and having approximately figured out the interface of the site, the latter-day traders, headlong, rush to spend their own money. As a rule, their lion’s share resets the account at the first transactions, after which they no longer try to continue.

The case, in this case, is not at all in the fraudulent actions of the site owners, as many visitors who have lost money belief. Yes, indeed, for demo accounts, most brokers create simplified working conditions and can even adjust rates. Therefore, you shouldn’t trust your first successes at all – the demo version is designed solely to familiarize yourself with the functionality and capabilities of the site, and you don’t get real skills on the exchange.

The main mistake of unfortunate newbies in trading is that they do not really represent the essence of earnings in exchange rates. Misleading, as a rule, introduce the word “game”, which creates the idea that Forex does not require any effort, only luck. However, for genuinely successful traders this is a severe job that requires knowledge, diligence and skills.

What dooms you to fail?

Before we talk about the personal qualities of a successful trader, let’s talk about his antipode – a man who is exactly waiting for the loss of funds, time and effort on Forex. So, when should you not open a deposit?

Figures and graphics make you depressed, and the need for calculations makes you sleepy. If you have never been interested in finance and mathematics, then there is nothing to do in Forex.

You do not know how to manoeuvre in a massive flow of information, analyze it, draw conclusions. Anyone who has been in Forex has seen a regularly updated news feed, without tracking of which it is impossible to predict currency rates.

Unwillingness to devote to trading a lot of time. It is impossible to play on the exchange from time to time and has success. While you miss the time, others earn.
Excitement is the main enemy of any trader who can ruin you in minutes. Carried away by short-term benefits, you can miss the main thing, and the next fluctuation of the course will lead you to losses.

Surprisingly, the fear of loss is as harmful as recklessness. It should be understood that making money in the financial markets is like a trade, and in any business, there are ups and downs. Even the most successful broker does not manage losses in trading, but they should fit into your borders, and not go beyond them.

The key to success is knowledge and strength of mind.

Not everyone can become a successful trader, no matter how the advertisement assures us of the opposite. Like any other profession, trading on a stock exchange requires a combination of specific skills and character traits. So, what do you need to make the game on currency rates bring you not frustration, but income?

Cool and sober calculation. An ideal trader is a person who can curb his desires and appetites, does not succumb to momentary aspirations and always acts under the outlined plan.

Serious attitude to trading. We have said earlier that we should not regard currency trading as a game – this is work and not an easy one. And treat it accordingly.

Self-discipline is one of the main factors without which trading is necessary. You determine how much time you can devote to the exchange because at this work there are no bosses or a daily routine. Here lies the main problem: many people do not know how to force themselves to work. As a result, having turned on the computer, you are constantly distracted by other matters, personal correspondence and devoting yourself to trading in a catastrophically short time. In such conditions, it is difficult to expect that your earnings will grow.

Interest in trading process is the key to your professional growth. Seminars, training courses, an independent study of news, forums and all available information increase your level of knowledge, allow you to make decisions more thoughtfully.

The ability to plan and go to the target is also essential. As a rule, successful traders make a strategy for a specified period, which they clearly adhere to. As a result, they can even plan their income levels quite clearly and very rarely incur losses. At the same time, individual costs are put into the strategy, and traders calmly relate to a temporary recession.

Willingness to invest your own funds. It should be understood that a deposit of 10 dollars can turn into a state only in fairy tales. To have substantial incomes, you need to invest sufficient initial capital for this.

Self-confidence (not to be confused with self-esteem) is the quality of prosperous and successful traders. While newbies fear and lose opportunities, experienced stockbrokers make money.

The set of personal qualities necessary for a successful trader is quite extensive. But even if you have all the character traits described above, there is something else that you cannot do without when trading currencies.

Do not think that financial education is necessary for trading. Moreover, in financial institutions of higher education, not so much time is devoted to trading – this is usually an overview course where students do not gain any practical skills. The same information can be obtained in a few days, carefully examining any information site.

In order to successfully play on the stock exchange, you will need something else – the ability to study information and draw conclusions, build graphs and forecasts, and then implement the strategy. In fact, any intelligent person with an analytical mindset and mathematical abilities can learn this.

Novice traders study Forex trading in two ways:

– Undertake training courses with experienced practitioners;
– They learn by trial and error, independently studying materials and practicing on an account with a small deposit.

The profession of a trader is exciting and very difficult, and with a serious and thoughtful approach, it can bring a stable and rather significant income. However, it should be understood that it requires specialized knowledge and skills, so the first time in Forex should not be expected to super-profits. A severe business approach, continuous improvement of skills and the ability to plan your work and its results will lead you to success rather than hope for luck and gambling on quotes.

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