|
The “Psychological Factors Involved In Commodity Trading" article examines and elaborates upon on the characteristics individuals should possess if contemplating trading in the commodities and futures markets This article such factors as stress, confidence and proper preparation in order to avoid mistakes and ensure success.
Several studies have been conducted on traders, revealing certain characteristics that distinguish winning or losing traders. Indeed, the most important factor is managing the psychological elements that coincide with trading.
The profile of the typical losing trader
It has been found in most losing traders seem to be extremely stressed and generally have a negative outlook on life, always expecting the worst. He or she generally suffers from personality conflicts and tends to blame others when things go wrong. Losing traders tend to be disorganized and impatient, constantly seeking immediate gratification.
Another common attribute of losing traders is that they let their emotions control their trading. Unsuccessful traders see the same signals as successful traders. Both recognize them as familiar. Losing traders, however, tend to find reasons what might go wrong with the trade. This usually results in bad feelings and justifications as to why they should not enter the market.
Unsuccessful traders also tend to have a lack of commitment to trading. They tend to lack the discipline necessary for proper research and analysis in order to implement successful trades. These types of people generally do not have a set of rules to guide their behavior and are usually characterized as crowd followers. Unsuccessful traders are often impatient and angry at the markets. They often suffer from fear and anxiety, usually at the wrong time.
The common characteristics of profitable traders
Successful traders tend to have a well-rounded personal life and a positive attitude towards their environment. They have a strong motivation to make money. They lack conflict in their lives. They take responsibility for all results encountered.
Profitable traders all have a solid knowledge of the technical factors affecting the market and show a strong aptitude for making sound decisions without common biases. They all demonstrate an ability to think independently. They typically demonstrate strong management discipline attributes, and thus, have the ability to exercise strict risk control and patience. Successful traders see a signal, recognize it as familiar, feel good about it, and make a trade with confidence.
Though successful traders are motivated by money, it is not of critical importance. All successful traders are not fazed by losses. Trading is more like a game for them, such as chess, where the act of winning is the most important factor, rather than just monetary compensation. Careful mental rehearsal is important for their success. They generally have the attitude of already knowing that they will win the game before they start. In other words, they are extremely confident. This confidence arises from proper preparation before beginning.
|
