Forex Psychology Introduction 101

Psychologists have made profiles of many professional groups such as the police, pilots and firemen. It is becoming more and more frequent that businesses of all sorts are beginning to request job applicants to undergo psychometric tests to see if they are suitable for the job. In these tests, certain personality qualities are seen as more desirable than others for particular lines of work.

Even more recently, psychologists, often traders themselves, have turned to looking at what attributes make the successful trader. The University of Minnesota has carried out one such study. They found:

1 open-mindedness – successful traders are open to new ideas. They do not close their minds off to other possibilities if these can be shown to be beneficial. They will have a successful system of their own which works for them but they are quite willing to try out other ideas that seem promising.

2 conscientiousness – trading requires a lot of hard work and successful traders take their job very seriously and are prepared to go that extra mile. They will not trade unless well-prepared. They also follow their trading rules without fail, not taking a trade unless all criteria are met.

Conscientious traders keep to a regular schedule and rarely diverge in trading or life. They are also meticulous in their adherence to their trading journal.

3 personality types can be separated into introverts and extroverts – trading is a solitary activity. One would therefore expect that introverts would do best. However, many traders like to link up with other traders within forums or otherwise and form networks for the exchange of ideas and information. This would classify them as extroverts, as they usually are in the normal daily lives. But even introverts these days are employing coaches and mentors as they realize that isolation leads to a narrow perspective and tunnelled vision.

4 helpfulness – successful traders are willing to share their knowledge and skills with others to help them improve. They seem to sense that the odds are against them and that survivors should support one another. Many successful traders become forex trading coaches to not only benefit themselves in their learning curve but to help others attain success. They realise that not everyone can become a successful trader but they know that for some they can make a real difference.

5 neurotics - may succeed in other professions but are not likely to succeed at trading.

A positive and win-oriented outlook is a key quality in any field and particularly in trading. This does not however mean that people who do not possess the attributes listed cannot become successful forex traders. Motivation and passion will help develop techniques to overcome any not so ideal qualities. And personality characteristics are not set in stone. In addition, overcoming such obstacles shows determination and that is a quality that makes a winner.

Analysing oneself and identifying strong and weak points will bring fruition. Personality is important and plays a major role, for instance how self-disciplined and in control of your emotions you are. If these are lacking, then they have to be developed to become successful

Article by Nial Fuller , Trading Coach at ‘ Learn To Trade The Market ‘ and Jody Martens (PHD)

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