FX.co ★ Three pitfalls in trader's work

A trader who aims to join the global financial mainstream and find his place in the world market, encounters three obstacles. Experts recommend that traders deal with them in order to build a successful market strategy. Traders are advised to turn these weaknesses into strengths, which will enable them to pave the quickest way towards success and financial health.

Perfectionism

This characteristic trait forces traders to pursue elusive ideals instead of focusing on achieving realistic goals. When it is impossible to achieve the required level of effectiveness, perfectionists engage in excessive self-criticism. They have to work hard to feel competent. When a perfectionist profits from a deal, he/she thinks of lost opportunities instead of enjoying the win. His/her efforts are aimed at finding mistakes and failures, which distracts from the trading process and the search for optimal solutions in the future.

Egocentrism

Our weaknesses including egocentrism do not benefit trading. In case of failure, it undermines the whole work. If a deal is profitable, a trader is proud of himself. But if the deal is loss-making, he/she is likely to face an emotional breakdown. This has a negative effect on the trading process. Experts point out that a successful trader focuses on the very deal, while a self-centered trader focuses on its profitability. Egocentrism is destructive to a trader and forces him/her to open inappropriate deals just to regain losses.

Overconfidence

Overconfidence is a great challenge for speculators in trading. It is based on a lack of understanding of the market complexity and an underestimation of their features. Self-confident traders are not serious about the market. They do not want to gradually move towards success. Such players do not wait for their first stable results. On the contrary, they try to make large deals and reap profits right here, right now. As a result, they make impulsive decisions and destroy the developed strategy. A distinctive feature of self-confident traders is hectic trading, which does not include the analysis of the current state of the market.

Bonus: helping hand

Having identified problems, experts suggest different ways of dealing with them. Traders should stop focusing on themselves and concentrate entirely on the market. It is necessary to interpret stock exchange information correctly and make effective decisions. To do this, speculators need to be fully immersed in the market flow and be able to read its signals. A serious mistake in trading is to take everything personally and think about the results, neglecting the process. Traders should not build self-esteem only on the basis of winning and losing deals. Balanced life promotes balanced trading, experts sum up.