With the implementation of Western model capitalism to Asia, there has also been a growing interest in developing pro stock traders. The key disciplines that have allowed these professionals to succeed are discipline, self-control and emotional intelligence.
These skills are crucial because they keep traders from making rash decisions based on emotions rather than facts.
Trading in Asia
When people think of trading or investing, their mind typically goes to Wall Street or London, where significant exchanges are commonplace. However, many other countries have recently started implementing stock markets to benefit from the capitalizing power of equities to grow their economy, jumpstarting development in rural towns and cities across Asia that were previously overlooked after the 2008 global recession due to outsourcing.
Unfortunately for Asian stock traders, becoming a pro is not easy. Traders and investors alike must be able to discipline themselves by controlling their emotions and always having a plan in place. This way, they can sell before the price goes down and buy when it’s low, rather than getting caught up in market swings that can cause people to panic and lose money quickly.
The three key disciplines of a pro trader
Although there are many ways to invest or trade for profit properly, this article will focus on three key disciplines that have been shown to separate professionals from amateurs: patience, planning and keeping calm under pressure.
For stock traders who want to make long term investments without locking all their capital away for years at a time, this advice may seem ridiculous. However, if traders can stick with their plan and not get greedy, they may encounter great opportunities to grow their investment portfolio.
First, self-control is essential for stock traders because it keeps them from making hasty decisions out of greed or fear. For example, if a trader sees that oil price has dropped significantly due to supply over demand, they may be tempted to sell all their shares right away before the price plummets even further.
It would be unwise because short-term fluctuations in prices will often look more attractive after some time passes. By having patience and waiting for the right moment, investors can make more significant returns on their investments than people who sell too soon.
Another discipline stock traders must-have in modern markets is planning. After reading reports and observing what may affect the economy, investors can make plans to follow the letter, rather than just following trends or market swings (learn this here).
For example, many external factors could cause oil prices to rise even though an oversupply exists. A trader might not know all these possibilities, but taking time each day to plan their next moves will make them less likely to jump at every opportunity presented because it doesn’t fit their strategy. This foresight takes time but pays enormous dividends when traders do not get caught up in every new fad and stick with their plan.
Finally, emotional intelligence is a must for any trader or investor trying to make it in an increasingly complex and confusing financial market. Whenever someone starts getting stressed out during the day because they’re losing some money on their investments, they should take some time to relax and calm down.
It may sound like strange advice, but emotions such as anger and disappointment can be powerful enough to make investors do irrational things. Being able to control one’s temper has been shown to improve people’s decision making skills considerably (Investopedia), making it easier for them to make choices that will benefit them long term rather than just reacting quickly with a knee-jerk response.
By having patience, planning and keeping calm under pressure, stock traders in Asia gain a massive advantage over their peers.