› The proper way of thinking for a trader

The proper way of thinking for a trader

A trader should not only focus on strategies, signals or “grail”, but also concentrate precisely the image of thinking that stay at the central of success. These following points sketch the overall pictures of thinking ways that the trader should do.

How do traders imagine the market?

In this paper, we intend to remove binary options and view the financial markets in aggregate because options are part of this market. Most traders frequently view the market as:

• A place in which people can earn with his mind.
• The strategy can 100% bring the profitability.
• The market is predictable and clarified.
• Each can earn money.
• All those views are completely unreasonable.
• Successful people are always less.

Lots of unhonest brokers and their partners persistently convince traders that financial market is not complex, and everyone can make money there. This view is shared extensively on websites, on television and books. But if the view is true then anyone can win certainly. However, the fact is that only 10% of traders are profitable and the majority experience loses. Therefore, the first conclusion is that in financial markets, only minority of trader earn money, if you think like the majority, a loss is guaranteed to you.

 financial market
Source: Auckland District Law Society

And this context is a prime example for any sphere. For instance, football is the most popular sport in the world. The context resembles the financial market, in which they promote the mass marketing that everyone can become a great player. This is true? Of course not. The most caught-on names are Messi, Ronaldo, and Ibrahimovic, … But these stars, who receive millions, are a minority. There are tens and hundreds of thousands of people are mundane, ordinary players around the world. They control the game but are on top of the unit. So, trading is the same. There are many traders, but they are at the top of the unit.

Is it feasible to earn the majority?

There is the fact that the market is arranged so that one can earn on it. The reason is that traders compete and earn the profits based on the losses of others. For instances, 3 traders: Ivanov, Petrov and Sidorov, each deposit 500 dollars. Suppose the market contains only 3 traders and they begin to trade. All possible options for the development of events are only 2:

1. 1 Traders earned, and 2 others lost.
2. 2 traders earned and 1 lost.

In the first event, the minority earned, but the majority earned in the second case. However, ass soon as 2 traders have emptied the third, they remain 1 and 1. Finally, one will earn and the another will lose. And the winner is 1- a minority- in many cases.

This leads us to the second conclusion- the majority in any scenario loses.
This conclusion needed to be kept in mind frequently, especially when the trader is offered the binary options indicator “choice of traders”.

What to do?

The questions posed here is that does the trader think independently or follow the views of the majority. Many traders will decisively say that he or she is an individual and think independently. However, the trader needs to answer him or herself honestly that question, looking into the truth and not deceiving himself or herself. Only when brokers stop thinking and acting like the majority (beginners) the brokers will attain the threshold of success.

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