There is no question about the fact that in order to successfully indulge in Options or general trading, you will need to familiarize yourself with certain attributes and acquire a skill set, which will help you in your quest to making fast money. And although acquiring a set of skills through professional coaching and mentorship is a walk in the park, there are some other qualities you must possess or adapt to if you want to become a successful trader.
Being able to recognize company trends and having the diligence to figuring out trading plans is important, but nothing comes close in importance as much your mindset, your discipline and your ability to control your emotions.
The Psychological Factor
Nothing is more pertinent in trading than the psychological aspect of the entire activity. And the reason as to why this is a truism is fairly simple; a trader is constantly coming out of and going into stocks on a short interval, which in turn compels him to make extremely fast decisions. However, in order to make such fast decisions, you need to have a certain mindset. You need to have the discipline to not emotionally trade, but stay consistent with your trading plans and strategies.
The Fear Factor
Traders when faced with a screen that is bright red, indicating that stock prices are down, have nothing else to do but get scared. And that is a natural consequence of this business. However, traders who get too scared end up liquidating their holding, cashing out – which is not a bad idea, but it isn’t a good idea either. Sure, you may end up dodging some losses, with the emphasis being on the word (some), whereas you will be missing out on huge gains and potentials.
Overreacting to a natural circumstance is not the way to becoming a good trader. A seasoned trader always quantifies the types of losses he is facing if he doesn’t pull-out, and tries to implement strategies that can present with a win-win situation in the long run.
Greed will destroy you
‘Pigs get slaughtered’, this is a fairly old, but a very powerful saying on Wall Street. When I talk about greed, I am talking about investors who try their best to keep holding on to winning positions in the market in order to squeeze every last drop out of the trade. This is a potentially dangerous tactic because as a trader you will always stand the risk of getting sidelined or pushed out of your position. And this is when you lose a ridiculous amount of money.
The Bottom Line
It is important that you understand trading is an art form. There are risk and gains in this game, but the winner is always the one who integrates a thorough strategy, which is predefined, has a calm mind and the nerves to gamble when faced with a sticky situation. Knowledge and research goes a long way when it comes to becoming a successful Options trader.