Lesson 4. How to Find and Develop Your Trading Strengths

People frequently focus on overcoming their weaknesses instead of developing their strengths. Remember your school years. It's about low grades that the vast majority of parents are concerned with and they seem to get a lot of attention. Instead of devoting more time to those areas in which the child has the greatest potential for development, they focus on working out weaknesses.

If you want to succeed in trading, then you need to determine what you are good at in the first place. In the end, weaknesses are rarely turned into strengths, so you will probably be limited to becoming an ordinary person in this area. For example, if you have never played sports, then you will not be able to reach the level of olympic athletes, even if you start training hard. Therefore, today we will talk about the disclosure of strengths.

Lesson Topics:

• Recognizing weaknesses
• Developing strengths
• Process orientation
• Motivation for change
• How to remain flexible and stop trading on autopilot

Recognizing Weaknesses

When you seriously engage in personal growth, you will have to face your weaknesses. It is necessary to learn to admit and accept your drawbacks without damaging self-esteem. Accepting weaknesses is a challenge to self-esteem.

Our ego tries to hide from us even the most unpleasant flaws. Unfortunately, they won't disappear if you just isolate yourself from them. Instead, weaknesses will worsen in this case, preventing you from improving and learning new things. Eventually you will stop developing as a person.

Let’s assume a trader who suffers from lack of self-discipline, which prevents him from sticking to the loss limit. He suffers major losses, but subconsciously refuses to block his wrong behavior. People do not want to admit that unsuccessful transactions were caused by lack of discipline. This inability to face the facts reduces profitability.

Are you honest with yourself? Are you aware of your weaknesses that affect trading? Are you able to honestly admit your drawbacks, or do you prefer to play the victim, and always figure out ways of shifting blame if things don't go well? The experience of trading on a demo account will surely help you to recognize some of your weaknesses.

By recognizing your Achilles heel, which is lack of discipline, you can take measures to combat this shortcoming. For example, you can train to implement your trading plans on a demo account until you master the processes needed to avoid distraction at work. Indeed, it will take a lot of time and patience, but this way you will strengthen self-discipline.

For traders, there are three stages of weakness acceptance:

1. First of all, look for mistakes in yourself and only then in other places.
2. Recognize that weaknesses are a normal part of your personality (no one is perfect).
3. Take the necessary measures to prevent the manifestation of your weaknesses.

You will be able to learn from your mistakes only if you have the following traits:

• Willingness to accept mistakes as part of yourself;
• Modesty to understand that you are not perfect.

Ignoring or hiding your weaknesses will not lead to anything good. Like your positive traits, your flaws are part of you. They make up your personality. Remember that imperfection is an inevitable part of life that gives it profoundness and value.

Failures are a constant component of binary options trading. Even the most experienced traders face strings of bad luck. Accept the fact that every trading loss is an opportunity to gain new knowledge, understand the market better and improve strategy.

Start recording unprofitable transactions, because it is very useful. To do this, create a table with three columns. In the first column, record a losing transaction. In the second one, specify the reasons for the loss and what you have learned. In the third one, note down what you can do to improve your results in the future. You will be able to develop yourself through this habit. Some platforms such as Pocket Option offer built-in statistics that simplify keeping notes.

Be consistent in the execution of trading plans and do not deviate from the chosen strategy. Through this approach, weaknesses will not negatively affect your trading results.

Developing Strengths

Surveys show that to most people, self-improvement involves working on weaknesses rather than strengths. As we discussed earlier, this is largely caused by the education system. The focus on eliminating failures begins from the school desk. This approach wastes energy and traps traders in
mediocrity.

Personal drawbacks should not be a reason for self-flagellation. It is much more effective to identify and develop strengths. Only then will you be able to achieve outstanding achievements.

The awareness of your merits is one of the keys to success in binary options trading. What skills and talents do you have? Here are some examples of strengths that are useful in trading:

• You learn fast.
• You have distinct analytical abilities.
• You easily adapt to new conditions.
• You stay calm under any circumstances.
• You have mental and physical resilience.
• You can rely on your flair and intuition.

Do you use your talents in trading? Think about what you can do to fully realize your strengths. Otherwise, you risk being among the 80% of people who do not use their personal advantages in their professional activities.

Remember that you are your main critic. Accepting yourself with all your strengths, weaknesses and needs is not always easy, but you have to do it.

Start developing your talents and strengths instead of working only on the drawbacks, then you will be more likely to become a successful trader. Continuous development generates a successful experience that makes it easier to accept your shortcomings. Success motivates and generates self-confidence.

Determine your strengths in trading, and then consistently work to strengthen them. Find the market and trading style that makes the best use of your advantages. At the same time, consciously accept your drawbacks as part of your character in order to reduce their impact on your trading activities.

Process Orientation

Successful trading is a constant process of development. Adaptability is one of the key traits of a good trader. First of all, it is a matter of your work attitude.

Psychologists point out two prerequisites for adaptability:

• Process orientation;
• Intrinsic motivation.

You won't be able to focus on long-term goals without planning. Easy access to the binary options market makes it tempting to start real trading without preparation. Perhaps at first you will even make a profit. But it's speculation, not professional trading. This approach will not lead you to success.

A sound set of processes is necessary to make profit in the long term. In addition, you need to clearly define your goals. Every step you take should be aimed at achieving them, starting with the strategy development and ending with the trading plan implementation. A structured approach will help to resist emotional waves, which are especially unsafe for beginners. You control the processes, and the market determines the amount of profit you receive. Therefore, process orientation is the key to success.

Many traders are intimidated by the amount of work required to establish trading processes. However, if you are not completely confident in what you are doing, you will not have enough motivation and emotional strength to achieve your goals. As a result, you will not be able to properly implement the established trading plans and learn from your mistakes. Your development process will stall.

If you don't have a strategy and a plan, it's easy to mistake luck for ability. Short-term success can be misleading. Traders who are lucky enough to hit a big jackpot right after getting acquainted with binary options often overestimate their capabilities and end up losing their money. It is important to focus on the process, not on the result. In other words, you should focus on work, not on the money you want to earn.

Motivation for Change

It is insufficient to understand that you need to change your trading approach. You should want to do it. Traders who do not give up even after serious losses have intrinsic motivation. It provides them with the necessary self-discipline for continuous development. Binary options trading becomes part of their daily routine.

Psychologists often refer to self-efficacy, which occurs when a person develops an inner conviction that he can successfully cope with a particular task. A trader is unable to act effectively under stressful circumstances if he has no confidence in his competence. During conditions of uncertainty that you cannot control, it is crucial to believe that you are able to make accurate trading decisions.

Self-confidence sometimes leads to the illusion of control. Do your best to avoid this. Remember: you do not control the markets and therefore have no influence on what happens there. Always stay vigilant and be ready to adapt to any changes in the binary options market.

How to Remain Flexible and Stop Trading on Autopilot

Rules and systems in trading are an important part of process orientation. They help to maintain emotional balance and avoid mistakes.

But there is also a downside. Routine can harm your ability to adapt. You walk on a tightrope. Your brain switches to autopilot once you lose vigilance. Indeed, it is convenient and saves cognitive energy, but such an energy-saving mode can end badly. If you get used to trading on autopilot, you will forget how to adapt to new situations.

You should be able to find new solutions as the market situation constantly changes. To become a good trader, you should:

• Act differently in volatile and quiet markets;
• Understand that the correlation of assets changes in different market phases;
• Change your strategy and attitude depending on the market (bullish or bearish).

How to stay psychologically flexible and simultaneously avoid habitual (self-destructive) behaviors? Brett Steenbarger, an American psychotherapist and an experienced trader, offers four steps that will help to react predictably and cautiously to market requirements:

1. Look for alternative opinions. Question your assumptions regularly. Discuss various scenarios with colleagues, search for other points of view on the Internet, test new trading approaches in the Pocket Option simulator. Maintain adaptability and try to see the market situation from another side.
2. Change the market observation periods. If you primarily trade on short time intervals, it may be worth paying attention to medium-term or long-term trends. Studying the big picture will help classify price changes in the short-term arena as well.
3. Consider the market as a whole. It is not enough to compare different perspectives and points of view. It is also important to study correlating markets. This expands your viewing angle and allows you to get valuable information about the trading instruments you use.
4. Be cautious. Take regular breaks throughout the trading day. This will protect you from tunnel vision and reduce the influence of emotions. The first three steps consume a lot of cognitive energy, so you should give yourself a break.

Through sticking to these four rules, you will constantly test the strength of your market assessment and timely identify outdated thought patterns and behaviors. This will allow you to detect a trend change at an early stage and use the information obtained when implementing your strategies.

Summary

Loss limit is the maximum acceptable amount of losses, limited to a fixed share of capital.

Self-efficacy is the belief in the effectiveness of your actions and the expectation of success from their implementation.

Emotional flexibility is the flexibility of thoughts and feelings that allows you to respond optimally to everyday situations.

Tunnel vision (in psychology) is a limited, dogmatic way of thinking.