Can Anyone Be a Trader?
The short answer: Yes, anyone can be a trader.
But that doesn’t mean everyone should be a trader, or that everyone has the strengths it takes to stay in the game for the long haul. It’s important to do some introspection before making your first trade. Check out the answers to these questions before taking the plunge.
Do you prefer slow-paced work or fast-paced work? Trading requires a healthy combination of both patience and quick decision-making. You’ll have to use data and analysis to come to pertinent conclusions before sending your trade out into the market. But you’ll also need to know when the iron is hot and it’s ready for your strike. It’s a delicate balance that isn’t for everyone.
Additionally, some markets are more suited to adrenaline junkies and others are better for those who prefer deeper digging into trends and long-term technical analysis. Knowing which one you are, and then making decisions based on that, can save you a lot of heartache (and money!) down the road.
What are your strengths? It sounds like a classic interview question, but the reality is that it’s one of the most important questions to ask yourself before getting into the market. Traders have a wide range of skills, but the ones who know what they’re best at are usually the most successful.
Are you a confident decision-maker? Do you love diving into data and analyzing charts and graphs? Can you make quick work of analyzing data sets? Do you have the patience of a mother hen brooding her eggs? Can you drown out the noise and simply listen to your gut? Can you stay the course long-term once you’ve decided on a goal? The answers to these questions can help you figure out what your strengths are and whether trading is the right path for you.
How comfortable are you with risk and uncertainty? If you haven’t already figured out that trading in the market involves a certain amount of risk with dollars and cents, you should probably stop now. If you’re down, read on.
It takes a certain amount of risk in order to get into the market, and you’ve gotta be OK with that risk – be it high or low – in order to succeed in trading. While markets can be stable, predictable and follow trends, they can also have periods of uncertainty, too. This means that even if you are 100 percent sure the trade you’re making will pay off big time, there’s still a chance it might not.
That being said, you can develop a trading system and strategy for yourself around your preferred risk tolerance. If you love the thrill, go heavier into higher-risk markets. If you prefer a slower, more certain path, choose mostly lower-risk investments. Find a balance that’s appropriate for your comfort level and you’ll feel much more secure in your decisions and likely
make better ones.
How disciplined are you? First of all, most traders work from home, which isn’t for everyone. Home offices can be full of distractions, so unless you have a dedicated space where you work, this can be problematic if you have a short attention span.
Second, it’s important to set a schedule for yourself and then stick to it. Get into a routine and adjust based on how you feel during the day. If you feel like you need more breaks, schedule them in. Make time for deep research, reading up on companies and markets you might not know much about. Visit SmartTrader’s Ideas page, where you can connect with other traders to share idea setups, insights and advice. Reassess your portfolio and make sure it aligns with your long-term strategy.
However you decide to spend your time trading, figure out what works best for you and then stay the course. Hold yourself accountable.
Are you willing to put in the time? If you want to be successful at trading, you have to be willing to commit to learning everything you can about the market, strategy, charting analysis and so much more. If you do have the time and are willing to commit to educating yourself through SmartTrader’s learning modules, training and wealth of resources, you can be a successful trader. With the help of SmartTrader’s Trading Rooms, Trading Strategies, Ideas Forum, Tutorials and Marketplace, the education you need to make good decisions in the market is right at your fingertips.
What’s your budget? To be a trader, you have to be financially capable of “playing” with money. Be clear with yourself about how much money you are willing to work with when you set out on your first trade. Have clear points in mind for stopping and starting trades, and adjust your strategy accordingly.
Figure your charting software into your budget. SmartTrader has several plans that fit multiple budgets, and are fully customizable so you can purchase new functionality when you have a little more money to invest in your software. Whatever your budget, SmartTrader has a plan for your success.
How strategic are you? If you haven’t figured out yet that trading requires a long-term strategy, you probably haven’t been reading closely. Strategy requires a deep look at long-term and short-term data and then creating a broad-stroke vision for how you want your trading career to go.
It might seem like trading is all about snap judgements and quick decisions, and while timing is everything and you should be ready to make those decisions, they have to make sense for your
strategy. Keeping the big picture in mind is extremely important in trading, and SmartTrader can keep you on track by providing the tools you need to zoom out when needed to keep yourself on track.