Trader’s Psychology: The Importance of Being Positive

Ted Capwell

A Good Attitude is One of the Marks of a Successful Trader

The psychological effect strongly influences trading results. All experienced traders are well aware of this nuance, however, in turn, beginners often undervalue the importance of this point. Actually, the psychological aspect of trading futures is key to earning profit. Whereas the situation here is more complicated, just simply the presence of a good attitude and self-confidence increases the likelihood that your plan will be successful. Trading psychology is a very interesting, important topic. There is a reason that there are so many bestsellers written as an answer to that very question.

Trader Psychology: The Importance of Being Positive

This article will present a general summary of the main points on this topic. We will go through many aspects that touch on psychology and beyond. An honest outlook, emotional control, patience, suppressing the instinct to treat it like gambling, and the difference between live and demo accounts are all point that will be covered in this article. It is possible to go into the psychology of trading in more detail, as a number of famous authors can attest to, however, we decided to cover all of the main aspects in this article.

How a Trader’s Mind Works

This section of the article deviates slightly from the main topic. Here we will address the issue of how the brain works and how it differs from that of computer algorithms. How both intuition and your mood (mental outlook) relate to the productivity of your work will also be touched upon. As you know, this article is devoted to psychology, however, this section is vital to understanding the essence.

It’s not uncommon for people of a certain level of success to be superstitious. Not implying that they believe in all kinds of folklore or rituals, but in a pragmatic sense only. Referring to the fact that they follow specific principles, enabling them to achieve and maintain success. In the context of trading, this point is especially clear. The problem is that the market is to a certain extent unpredictable. Which is why a trader’s individual psychology is far from the least important on the hierarchy for success.

For what purpose are we doing this? And how do our brains work? These questions are very important because nothing is more important for trading successfully on the exchange than simple, algorithmic thought. Things would be different if robots had already surpassed people, but that isn’t going to happen, even taking into account improved “artificial intelligence” and neural networks that learn from their environments on their own. That answer to this question lies in the unique inner-workings of the human brain.

Traders (people) in particular are able to generate more precise forecasts in those very situations where robots are led astray. The entire problem hinges on the fact that there is no universal algorithm that can be counted on to forecast future price behavior accurately. The human brain, in contrast to computer programs, considers significantly more input signals (with at least a visual assessment of the chart) than robots. Computers are able to access a very limited amount of data, only that collected by the algorithm’s developer. The human brain accesses and processes a massive amount of information. Although, we aren’t aware of more than 80% of it. However, that doesn’t mean that all that information is absent from the thought process. That information specifically is what creates what is usually referred to as intuition.

With that in mind, we will not get too far off topic and return to trading. So, why do the brains of experienced traders forecast more precisely than those of beginners? Even if they both are using the exact same trading strategy. It’s simple. The point is that, in terms of practical trading experience, there are hundreds of thousands of different models of price behaviors in various situations already stored in their memories. Therefore, professionals think differently, they take into account not only the information before them at that time, but also what they have come across before, which is saved in their memory. Namely, in regards to the subconscious process. That is why specifically an experienced trader often can identify a false signal from the first glance, even when the indicators appear to show that it is the opportune moment to enter the market.

Why is it important to have a positive outlook?

In order to answer that question, we need to look a bit further into our first subject, looking into how our brains work. Every emotion and feeling prompts the development of a specific, let’s say, hormone that puts us in a specific state of mind. There are hormones for everything, fear, happiness, peace, certainty… and more importantly, for their combinations. Their concentration in our brains and veins not only affects our mood but also our objective productivity.

So, those who don’t expect failure, don’t experience it. And the reasons for that are fairly objective. When we are depressed, start to doubt ourselves and feel defeated, our brains literally begin to function worse. Meaning that the subconscious part of our thought process suffers when we are identifying signals, unbeknown to us, but in our memory. In contrast, if a trader is positive and has confidence in their success, then, first and foremost, that is reflected in their mental health and wellbeing; and secondly, actually increases their speed and mental productivity.

Our mental state has a real and lasting effect on our physical and mental health, but mainly on the efficiency of our mental process. In terms of psychical work, for example, this doesn’t play a key part. However, in the context of intellectual endeavors is absolutely is key. And trading falls into that category.

8 Traits of Successful Traders

  1. Taking Trading Seriously. Professionals view trading on the exchange as a full-time job, not like a casino. In terms of trades, they are after quality, not quantity. The majority of beginners don’t take trading seriously enough. That, in the end, will lead to a loss in investment and disappointment regarding the lost opportunity for profit.
  1. This is a very beneficial character trait. Without it, it is near impossible to achieve anything of note (above average) in any field. Learning how to trade on the futures market is far from a quick and fast process, so, to make it through, a person needs to have a strong sense of motivation, or they would give up halfway through without understanding all the advantages and opportunities the field has to offer.
  1. Experienced traders never follow the crowd. This doesn’t mean that they never agree with the general consensus. On the contrary, they factor it in along with many other nuances. However, their final decision is based on thorough, cumulative analysis of the situation. Professionals operate, first and foremost, based on their personal experience. That knowledge is more valuable.
  1. Another very important character trait. Impatience inevitably leads to financial losses, as serious analysis becomes more and more like a lame game, buying or selling short-term rates (“white/black” in the algorithm). Successful traders must be able to wait for signals for good opportunities on the market or the right moment to close long-standing trades and so on.
  1. The Right Attitude to Personal Failures. The only one who doesn’t make mistakes is the one who doesn’t do anything at all. Successful people make mistakes as well. However, they differ in the way they react to their own personal shortcomings and failures. They learn from any situation. In the context of trading, it means that every unsuccessful trade or financial loss must be analyzed in-depth in order to discern what part of the trading system lead to the unfavorable result. After all, every trade is placed with the expectation that it will end in profit. However, it isn’t possible to predict everything. Every once in a while, your trading strategy will be improved, and, with time, your profit will increase.
  1. Risk Limitation. Trading on the exchange is a job that carries along with it a high level of financial risk. Therefore it is important that traders take this aspect seriously. They must always weigh the risk against the potential profit. Traders always hope that the potential profit outweighs the likelihood of the possible loss. In practice, of course, this isn’t always the case. However, sound risk diversification and capital management can keep financial losses to a minimum.
  1. During the trading process, traders are met with numerous temptations. When deliberating, traders fluctuate between objective logic, their intuition and their emotions (first and foremost they are fear and greed). Considering the statistics on the subject, it is clear that traders often don’t go with their heads. The vast majority of beginners go by intuition alone. They “Buy” when it “feels” right, not when their trading system has indicated it is lucrative to do so. Professionals operate differently, although they don’t put their intuition completely aside, they, however, begin with an in-depth analysis and evaluation of the situation.
  1. A Positive Attitude and Self-Confidence. We return to the topic that this article began on. Successful people to not spend too much time dwelling on their mistakes. They quickly recover from setbacks, analyze what went wrong, and then continue on in their chosen direction.

The Right Attitude to Anxiety

Fear, along with a lack of robustness and self-confidence, is the most destructive emotion and is a serious barrier to achieving your goals. Many beginners are familiar with the feeling when they literally begin “praying” that the market moves in their desired direction till their trade is closed, especially if they need several points for it. This approach is fundamentally wrong, it puts traders in an embarrassing and unsalvageable position in relation to the market.

There is no way to completely escape anxiety. And there is no need to try to, because it is our primary protection instinct, and it saves us from many reckless decisions. However, you need to relate to it in a healthy way. There is one universal way that enables you to decrease your level of “turmoil” in real measure. The key idea is that you need to answer the following question completely honestly. What specifically are you scared of? As it relates to trading, there is no need to guess, as everyone is afraid of their active trades leading to losses. Which is why you need to “look your fear in the eye”. When you enter the market, you should rigorously calculate both the anticipated profit and the possible loss, morally preparing yourself for the worst case scenario. This approach really combats anxiety, decreasing “turmoil”, allowing you to more soberly analyze the real situation. To put it simply, “hope for the best, but prepare for the worst”.


This article was a bit unusual, however, in it we covered the main issues regarding the psychology of traders. We went over a basic understanding of how our brains work, the effects of a positive outlook on intellectual productivity, character traits of successful traders, and also practical ways to overcome anxiety, the main saboteur of success. In closing, it is worth noting that, despite it all, trading remains a very risky activity. Therefore, never invest money that you can’t afford to lose without decreasing the quality of your life, such as with borrowed funds.


“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”