Forex Brokers, Personalities & Success

By: Sacha Tarkovsky

In my last article I reflected on the thousands of traders who I have traded and what were the major errors that caused well over 95% to lose.

Here we will look at trading personalities and how your underlying nature affects your potential to make profits.

Let's look at some different types of traders that lose.

1. The Action Man

This is a huge group these traders want to trade all the time and love the excitement of trading and fall into two main groups:

Day traders

They are convinced the logic will work, but of course it does not.

All short term volatility is random, so they get stopped out a huge amount of times and when they do win profits are small.

The result?

A total wipe out of equity - After trading many thousands of clients I never ever saw a day trader win.

The other traders who trade too much are ones who tend to "revenge trade" they have lost money and try hard to get it back by trading more and wipe themselves out.

Another group tend to be news junkies.

They believe they can trade every scrap of news and make money and again the result is:

A total wipe out.

2. The universe is governed by law

These traders believe that they will never lose as they have found a system that can predict the future.

I traded a lot of the followers of Elliot and they all lost.

3. The educated fool

The above title have taken from Jake Bernstein (a great writer on investor psychology, check out some of his books if you can) these traders believe they are smart (many of them are) and that the more complicated their trading systems the more chance they have of winning.

They build hugely clever systems that are complicated, look great in theory and then they see their system lose.

What they don't of course realise is there is no correlation between how complicated a system is and how much money it makes.

4. The chase your tail personality

This group can't stick with one system. As soon as it has some losses they switch to another one.

That loses then their onto the next one and so on.

Many of this group have perfectly good systems but get impatient with losses and think another system is the answer.

5. Lets get rich quick

These trader buy e-books for 100 or so and think someone else can give them success, or believe making 100% quickly is easy!

They over leverage and are quickly wiped out.

So who won?

In my experience not many traders did, but the ones who made money long term had these traits:

They had simple systems they believed in.

They were humble and knew the market would hand them losses and make them look stupid.

They were patient and executed their systems with discipline.

They had a mindset that they would win longer term, no matter what losses they were handed in the sort term and were prepared to persevere.

Keep in mind not many traders win and if you want to then you need:

A simple system you have confidence in can trade with discipline and take short term losses cheerfully.

If you can do the above you have a chance of joining the winning minority - Good luck!

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