The 6 Things You Need to Trade for a Living
Anyone can become a trader, but not everyone becomes a successful trader who is able to trade for a living. In fact, as you probably already know, most traders do not succeed over the long-run. Why is this? What are some of the core traits you must possess in order to trade successfully long enough to be able to make a living from it?
Trading for a living is the dream, yet so few traders achieve it, and as you probably already know, the most frustrating part is that you only have yourself to blame for failing at trading. Let’s discuss six of the most important things you must possess if you ever hope to be able to make a living as a trader…
This one is pretty obvious, but I find that many, if not most traders, are trading for the wrong reasons and don’t really have the passion for it that they might think they have.
The best traders trade not only because they want to make money, but because they genuinely enjoy the intellectual and emotional challenges that trading the market provides. In order to become a consistently successful trader, you essentially have to have yourself mastered. Most people fail at trading because they eventually give into emotional impulse and urges; they want to make money fast and this desire clouds their judgement and logical / objective decision making and planning. You have to accept the mental challenge of trading, and enjoy it.
I can tell you right now that if your primary motivation for trading is to ‘make money fast’ or to ‘quit your job’ or to ‘save your life’, etc. you will not succeed and you will probably lose money rather than make it.
“Of course I need patience to trade successfully”, you think to yourself. It seems like everyone agrees on this and understands it, yet so few traders actually have patience as they trade.
Patience in trading means that you wait for your trading edge to form before you trade. It also means that you are patient with your trades and you give them time to play out; you don’t get emotional at the first sign of a trade moving against you. Patience in trading means you take a ‘forest for the trees’ approach, meaning you don’t get lost in the temptation of the market, instead, you are constantly focused on the bigger picture.
If you are not a patient person, you will probably struggle with trading, but that doesn’t mean you cannot learn to be patient. You simply need to understand that patience will make you money much faster than if you aren’t patient. If you over-trade and over-risk (not being patient), you will lose money which obviously will set you even further behind your goals as a trader. If you haven’t already, check out my article on high frequency and low frequency trading to learn more about how trading less and taking a patient approach will actually make you money faster in the end.
Discipline and patience are closely related, ‘cousins’ if you will. Where they differ, is that discipline means you are sticking to your trading strategy and trading plan, that you aren’t changing trading methods constantly every time you have a losing trade. So, you have to have the discipline to stick with your trading strategy through the ups and the downs and understand that your trading edge (strategy) takes time and needs a series of trades to play out in your favour.
If you constantly waffle and change methods, you will never actually get your feet off of the ground so to speak. As I stated before, any trading edge needs a series of trades to see the edge play out. If you don’t give it a large enough series or sample size of trades, you won’t actually be seeing the true power or profitably of the strategy.
4. Confidence and independence
To make a living as a trader, you have to trust yourself first and foremost. If you find you are constantly looking for other traders’ opinions on a trade or on a market, you aren’t ready yet. You have to learn your trading strategy and master it, and then simply trust yourself and trust your gut feel.
You will not become a professional trader from taking someone else’s signals or subscribing to some signal service. You need to learn how to trade the market by reading the price action on the charts and then making your down decisions from there. Always remember that no one cares more about your money and your trading account than you do.
When I say ‘security’, I am talking about financial security. I am not saying you need to be rich, but in order to trade successfully and make a living at it, you have to be trading from a mindset of wanting not needing to trade. If you feel like you ‘need’ to trade in order to be happy or be successful in life, you are going to get too emotional and lose money.
People who feel they have no other option but trading, are starting out with an emotional trading mindset, which is definitely not what you want. You want a clear, calm and unemotional mindset as you trade, and this can only be achieved if you already have a ‘Plan A’, whether that is a job that pays your bills or school, etc. Trading can be your ‘Plan B’, but you need that more secure ‘Plan A’ in place so that you can develop and maintain the proper trading mindset that will allow you to eventually become a full-time trader.
Finally, you need a trading edge if you hope to trade for a living eventually. A trading edge is the same as a trading strategy and it means the ‘event’ or pattern in the market provides you with an ‘edge’ over just a random entry. For my students and I, this edge is price action. We use simple price action patterns to give us a better than random chance of making money on any given trade.
Now, that does not mean that every trade will win, it means that over a series of trades, if we follow our strategy of price action, we have a positive expectancy. Meaning, over a series of trades, for every dollar risked we hopefully are making more than one dollar. Of course, this is also a function of your trade exits and money management, all of which I discuss in-depth in my price action course and members area, to learn more, click here.
22 Comments Leave a Comment
It is a real story to be a successful trader.thank you nail to share your experience.
Nail SIr you are absolutely correct..
Nial, your article is brilliant, as usual. I’m looking forward to learn more from You.
Yes you are absolutely correct..
Thanks Nial. You are really doing a great job here by educating us through the journey of successful trading. Which vehicle of trading do you preferred – Spot Forex or Forex Option? I want to know which one is better.
Good Day Nial
I have gone thru your all the articles – which I find of great quality.
Pls keep it up & share time to time your expertise. Tank You once again.
Nial, what can I say. I am just starting to trade and when I start wandering around reading different articles and the like you bring out your trading philosophy and bring me right back on track. Thanks for all your support.
Thusfar I have just read through your articles and it truly makes sense. I first want to have a good understanding of trading before I get your lessons.
Thank you for reminding me to be patient.
Great lesson once again. going through the comments above, I observed that you,Nial, has polished many of us better and better.
Thanks to you.
I found your article very imformative. I have had quite a few of these traits and was very impatient. I am slowly learning to be patient and you have reiterated for me not to over trade. Its logical and makes a lot of sense. Thankyou.
G’day Nial. Thanks always for sharing. Be well Good Sir!
Very good article, Nial . You always motivate me, you are a great teacher and I am sure you are a great trader also . Thank you for yours eforts to provide us a very good trading teaching. Wish you to have a good month and keep doing the good work you do now !
Some comments on patience
As always, superb advice Nial and as one who is new to the game this year, I of course overtraded and lost money (even with your course behind me). But that initial experience proved invaluable to be able to make lots of mistakes to learn from and get to grips with my emotions. To help understand what my trading frequency should look like, I did an analysis of potential trades looking back over the last 10 months, and compared this to my trades. The analysis looked at significant pin bars and long tailed bar setups on the daily chart, onto which I drew the Risk Reward and Duration of the trade. From this I observed the following:
There were 91 opportunities (that I could see) over 13 markets.
Average of 9 trades in total per month or 1 trade every 2 days or less than 1 trade per market.
The risk reward potential was astonishing but of course it is always so easy looking back but so hard in real time (and the past is no indication of the future).
The other observation from the analysis was that the average ideal trade duration was in excess of 20 days across all the markets, far longer than I had ever considered. There were some long trends in some of the markets,
As a result I changed my trade patterns and guess what, the profit curve is now moving in the right direction.
Patience is truly a virtue both waiting for the right setup and looking to get out of the trade.
Among your very helpful guidance provided to traders,I feel this is very straight forward article.It clearly and briefly states what a new trader should have to be a professional trader.I have a very good confidence on you and your article on the subject in the ocean of Forex literature and online college and Gurus.
That’s true ma man, that is a way to become successful trader.
Great, but one thing i experienced in 5 yrs of trading…. u should be paitent like crocodile not chaser like leopard.
Wait for opportunity and never chase the market.
Security is one of my favorites
I think there only are two things that are a must for a trader to be successful, which can sum up your six points:
1/ Mind edge: A mind that’s rooted in patience, impartiality, calmness and discipline. (Emotions and psychology can be regulated by the trained mind).
2/ Methodology edge: whatever strategy with an edge combined with strong money management.
If a trader posses these two edges, s/he can be very successful.
Very true Nial. After 5 years of trying different options, I joined up and become one of your members. You have truly made a difference to how I look at trading, and I am now successful. I treat trading now as a long term business and only use price action as the edge.
All those attributes are true for a successful trader. The most important thing is knowledge.
Anybody who wants to get into trading should do some training and get some skills, then apply the personal skills of patience and persistence, confidence ect.
Brilliant article. Simple and clear. I think developing these kind of traits in ourselves we can be in the “10% profitable traders” group, dont I?
And in the beginning, just keep learning.