Being a trader

According to many sources, being a good trader is 80% psychology and 20% methodology (regardless of whether it is fundamental or technical analysis). Similarly, portfolio management also includes psychology and risk management. As anyone who starts trading and investing realizes, everyone can acquire technical and fundamental analysis skills, but not everyone can handle the psychological aspect of it. Therefore, while only 10%, or maybe even 5%, of the people in the financial markets can make money, the rest lose money. Many beginners in investing and trading need to realize that drawing charts is not as difficult as it seems, but taking trades and managing them is the real challenge. For example, many amateur traders try to take too many trades, thinking they have grasped the system and wanting to make quick money. However, instead of rushing, it is necessary to take a slower approach, question every trade, and examine it deeply (Why did you take this trade? What confirmations did you observe from different angles? What did you feel during the trade, etc.). Building a systematic and consistent mental process is crucial for taking healthy trades because individuals can make money by progressing in a disciplined and rule-based manner, rather than being random traders who act based on their feelings.

System and psychology construction is the most important point

Moreover, one reason why investments in mentality and psychology are more effective in the long run is that neither the market nor the methods used to predict the market change. Some say that “Formations”, some say “Price Action”, some say “Orderflow and Footprint”, some say “Onchain Metrics”, and some say the best method is “Inner Circle Trader”. There may be methods that I have not heard of yet, but the point I want to emphasize is that the methods can be learned. Depending on your learning speed, you can get used to trading in a method within a three to six month period (shorter or longer for some). As long as you can make money, even something you have discovered yourself is suitable for trading. The important point here is the construction of the system and psychology. Developing and changing oneself, increasing psychological resilience and self-confidence, and knowing that even if they make mistakes and lose in trades, they can compensate for their mistakes and achieve success again.

The biggest obstacles to becoming a trader

Our cultural background, family life, and many things we have learned are major obstacles to becoming a successful trader. Because the trading mentality requires looking from very different perspectives, reading a lot, and breaking many stereotypes we already have (such as the stock market is not safe, invest in gold, etc.). In addition, individuals have not been able to make decisions on their own throughout their lives; from childhood, there are many people who make decisions for them or influence their decisions. However, in the trading arena, everyone is on their own and should learn to make their own decisions and determine their own roadmap, as well as to close their ears to outside voices and trust their strategy. Here, the control is not in your hands, it is in the hands of the major market makers, and what you need to do in this situation is to try to predict their movements.

Responsibility is not in the market, it's in you

Neither the market controls you nor can you control the market. The essence of the matter is accepting that all responsibility lies in your hands. You are solely responsible for the decisions you make, blaming the market or the people you follow will not change anything. Let's take the Iran-Israel war, which can be considered as one of the black swan events, for example. Almost everyone was insulting the countries that caused the war (they were right to do so) but it was observed that many people did not manage their risks adequately and the market's risk appetite and greed peaked. What's even weirder is that people's anger is not only directed towards the countries that caused the war, but also towards crypto phenomena or the people they learned from. Who could have known that a war would break out? A rational person should invest and trade while being aware of the risks of the market they are in. Instead of expecting the people you follow to know such a possibility in such an environment, you should have thought about what you could do in case of a possible drop.

To summarize, if you want to be a good trader, you should establish certain principles and rules for yourself and try to adhere to them. From the outside, all of this may seem easy, but it is much easier said than done. However, a trader must decide when to take a trade, how much risk to take, how long to stay in the trade, and when to exit under which circumstances. At the same time, while all of this is happening, they must learn to control their psychology and emotions, and try to reassure themselves by remembering to stick to their plan. The markets can take you to your target without stopping you or without even taking you into the trade, but on the contrary, they can involve you in the trade, not trigger your stop, and lead you to liquidation.

After something happens, saying "I knew this would happen" is called the "Hindsight Bias," but this will also be the subject of our cognitive biases article. If the trade had gone in the opposite direction, you would have said, "I'm glad I didn't enter." Therefore, we tend to shape the results according to our own inferences. It should not be forgotten that every transaction has an equal probability of winning and losing. In other words, a transaction can make you rich, but it can also cause you to lose everything. The constant change in price movements and the increasing profits eventually cause individuals to forget their principles. Taking a step back and observing the big picture during periods of extreme gains or losses will enable individuals to make healthier trades.

This article does not contain investment advice or recommendation. Every investment and trading move involves risk and readers should conduct their own research when making a decision.