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As long as you do it the right way, day trading can turn out a very profitable career. However, it can be challenging for newbies, especially those who aren’t prepared with a well-planned trading strategy. As the term indicates, day trading refers to purchasing and selling a security within a single trading day. Day trading most commonly occurs in the foreign exchange and stock markets. As a day trader, you need to develop some essential traits to become successful. Read on to learn more about the 4 essential characteristics that make a successful day trader.
Four Golden Characteristics of Successful Day Traders
Ample Marketplace Experience & Knowledge
Day traders possess ample market knowledge and are well-attuned to events causing short-term market moves. Typically, the day traders who lose money attempt day trading without a thorough understanding of market basics. Chart reading and technical analysis are two of the essential skills that a day trader must-have. Without an in-depth knowledge of the market that you are in, charts can be hard to assess. A day trader should have the ability to understand all ins and outs of the market and products they trade.
Mental Toughness
You might think of it in terms of having a thick skin, but the trading market can be a tough spot as it will constantly throw trade losses in your direction. With that said, as a day trader, you need to know how to bounce back and display strong resilience and mental toughness. If you were to feel discouraged and depressed every time you lose some trade, or you see one of your trading strategies fail and lose heart, your life as a day trader will be miserable. It is important to know that trading losses will happen. In fact, the most successful day traders are prone to lose trades every day. Traders need to stay mentally strong and rational through a series of trading losses (which can happen more often than you can think) and not let the loss of money affect their better judgment.
The Discipline of a Day Trader
The key trait required by all day traders is discipline. The trading market is filled with infinite trading opportunities. You can trade numerous products every second of your trading day. Yet, the thing is that one a few seconds will lead to awesome trading opportunities. If we were to dig things a bit deeper, it would be fair to state that only five seconds of actual trading happens throughout the day. All other seconds provide a chance to mess up those five seconds of great trading. You may take unnecessary trades or get distracted and hence skip important trades. A premature exit from the trades can also mess up your successful trades. The bottom line is, it requires strong discipline to sit there, wait for the trade signals (that matter), and then take action without hesitation.
Adaptability & Constant Learning
As a day trader, you are less likely to see two trading days going the same way. Some strategies may look fine on texts. However, upon visiting the market, you will see that everything is different from those described in those textbooks. Successful day traders pose great adaptability as they visit different markets and implement different strategies according to the markets by looking at forex signals. We recommend you to try best demo account from Rakuten Securities Australia and learn about effective trading strategies. The characteristic of adaptability requires a flexible mind as the trader must be capable of looking at the price action each day and determine the best strategy that will work.
In other words, traders must implement their strategies in real-time according to the market conditions present that day. Due to constant learning, day traders also know when to stay away.
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