07 June 2023
While anyone can do online trading, specific personality traits are required to be a successful day trader. Often portrayed as an exciting carefree profession, being a day trader is one of the most volatile investment activities you will encounter. What may look like a haphazard approach to investment is, in fact, extraordinarily disciplined and structured. Perhaps the ability to switch between investments in a split second gives this undisciplined overview.
When you consider that it only takes a second to press that button, to complete that trade and open/close a position, this puts it into perspective. Even a relatively active day trader opening and closing positions five times a day will only deal for maybe 10 seconds. The discipline for the rest of the trading day will dictate how successful they are and whether they will live to fight again tomorrow.
Patience is part of discipline, the ability of a day trader to wait for that perfect moment to open or close a position. For those investors trading online, that moment when you hit the button could be a gut feeling or a limit which has been hit. There may be occasions when you can enhance your returns, going against your investment strategy, but this again comes back to discipline. All of your trades need to be done within specific parameters and certain boundaries so that you have structure. Without structure, it is simply chaos, not controlled chaos!
Whether a day trader or a "normal trader", adapting to market conditions is an integral part of a successful investor's personality. Day traders and general investors often suggest that "no two days are the same". These are some of the truest words spoken when it comes to investment. While history will repeat itself, it won't necessarily be in the exact same fashion; consequently, as a day trader, you will need to adapt to market conditions - learn to adjust your thinking.
In reality, whether a day trader or a long-term trader, you need mental toughness to appreciate that you won't always get it right. The key is to cut your losers and run your winners, which sounds simple in theory. However, if your last trade was successful or a complete failure, this matters not; you need to learn to forget and move on to the next one. As a day trader, you will sometimes experience fatigue, and many traders will eventually succumb to burnout. So, make the most of online trading while you can!
An independent approach to online trading is a must for a day trader, although the moment you stop learning is when your career starts to downturn. Independence as a day trader means appreciating the thoughts and views of others but having an acute awareness that it is ultimately down to you. There are no excuses and no trying to pass the buck; in the end, it is up to you when and how you trade and, more importantly, when you cut your lossers and run your winners.
The stereotypical day trader will appear to be focusing their full attention on open trades, when in reality they will likely have one or two trading ideas in the back of their mind. The ability to think ahead, looking to the future but also being able to adapt is a crucial personality trait. While your next trade may be conditional upon closing an open trade, different trades should be treated in isolation.
When people talk of day traders, there is undoubtedly a stereotypical opinion of their views, personalities and trading styles. The brash haphazard impression some day traders give will often hide what is effectively controlled chaos. An individual's ability to trade in these conditions will eventually dictate their success or failure as a day trader.
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