There are a lot of ways to become a professional trader. Financial firms’ headhunters give preference to people with degrees in math and hard sciences than just people with financial education. Let’s look at the basic skills that all traders are required.
Healthy thirst for information is a must-have skill for every trader. Many traders create calendars of economic releases and set announcements that have measurable effects on the financial markets. By being on top of these information sources, traders are able to react to new information as the market is still digesting it.
The ability to analyze data quickly is crucial for a trader. Every trader needs to foster his analytical skills for recognizing market trends and trends in the charts. It goes without saying that he can read charts with indicators and patterns from technical analysis.
Focus is a physical and mental skill that allows traders to maintain their attention and effort until the task is complete. Focus increases the more trader exercises it. As traders operate with big volume of financial information they need to be able to stay focused on the important data. If a trader can focus on a specific sector he increases understanding of it and get a competitive advantage against less specialized traders.
Record keeping is one of the critical element of trading. If you record the results of your trades on a regular basis, then improving is simply a matter of finding successful strategy among many others. It is hard to show real progress if you are not keeping records.
Control your emotions and follow your trading plan is trading 101. When traders start to get emotional about their trades — good or bad — strategy goes out the window. This is especially important in managing risk by using stop losses or taking profits at set points. Many strategies are designed so the trader loses a little in bad trades and systematically gains more on good trades.
With a little time and effort you can improve all these skills — research abilities, analytical skill, focus, control and record keeping. The investment of time and energy will pay off in better trades.