Qualities of successful traders: Mental Toughness

We can look at the best traders from two perspectives: a single session and a long period of time – months, quarters and years.

During a trading session, we can judge the mental toughness of a trader by the speed with which he/she recovers from losses and mistakes, and the speed and agility in making good decisions under conditions of risk, pressure, stress, uncertainty and often information chaos. Not without importance is the high degree of discipline of the best traders – at a level unavailable to other traders who, under stress, lose their discipline and ability to stick to and execute a plan.

In the long run, the best and mentally strongest traders are characterized by mental resistance to losses and big losses, ability to cope with long periods of losses and then bounce back.

During a single trading session, the key for the best traders is:

  • the use of emotion management strategies (completely different from other traders), which allows them to keep their decisions clear
  • good decision-making process in a variety of situations, including the most stressful and unexpected ones
  • the specificity of working in leading investment banks also requires disciplined teamwork, which includes good communication skills
  • the ability to “forget” the results of a moment ago and stay focused on good trading decision-making processes, which prevents depression, revenge and overconfidence, which lead to a distorted view of the real market and encourage mistakes and further losses.

Good decision-making processes in trading

The various tasks traders perform during a trading session require precision, focus, the ability to refocus (after something unexpected, stressful or unpleasant happens), to react quickly to situations and to make good trading decisions wisely.

Professional traders point out three key qualities in this area:

  • aggressiveness,
  • resistance to stress,
  • disposition to take risks, concentration and quick reaction time.

Note that when we talk about good decision-making processes in trading, we mean sticking to a certain plan, which when analyzed post factum is rational and good. Only then we can say that something is a correct series of trading decisions if we have a pattern, a good practice to refer to. Of course, these practices come from experience, these are best practices developed for different situations.

Best trading practices are one layer of the decision-making process in trading, but there is another layer. This second level enables you to systematically make the right decisions – this is the level of your personal strategies for managing emotional processes in trading.

The ability to deal with a trader’s personal stress level plays a key role here. Severe stress weakens intellectual performance, and very severe stress can reduce it to 20-30%. Not 30% but to 20-30% of our normal efficiency. It is of critical importance, because under the influence of strong stress we lose our ability to think clearly and assess the situation. In a situation where millions of profits or losses may depend on a single trading decision, maintaining a clear sense of judgment and the ability to stick to “best practices” is critical.

What makes best trader successful?

The one of the secrets of successful trading is the specific strategies professional traders use to manage their emotional state. Beginner traders do not have such strategies, nor do traders with a long experience – but poor results. Length of experience is not a factor that directly affects performance, but the absence of these specific strategies for managing one’s emotional level causes even experienced traders to underperform.

This may indicate that these strategies are crucial and critical to the long-term profitability of traders. Of course, this is in addition to the techniques, methods, and systems they use to accomplish their trading tasks.


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