Futures trading can be a thrilling and lucrative profession, with its ups and downs, but it's not for the faint of heart. To succeed as a trader, you need to possess a unique skill set and qualities that allow you to focus on the task at hand. Whether you're a beginning or experienced trader, you can always improve your trader skill and mindset.
Becoming a successful trader is no easy feat. It requires discipline, patience and consistent risk management. Whether you're trading futures, stocks, forex or crypto, mastering your craft is essential to achieving consistent results. Let’s explore three key traits all futures traders need to develop to become a master of their craft.
1. Be disciplined
Any experienced profitable futures trader will tell you that discipline is the most critical factor to long-term success. Discipline has a direct impact on every aspect of your trading—especially on your ability to follow a trading plan. Discipline builds confidence, which in turn builds emotional balance, allowing you to remain level-headed in even the most turbulent market environments.
Another benefit of a disciplined approach to trading is increased consistency. Crucial in trading, consistency helps traders avoid wide account equity swings. By sticking with a tested proven trading plan, your chances for long-term success greatly improve. By becoming a more disciplined trader, you’ll learn how to focus on improving your trading rules and decision-making process.
Overall, discipline is one of the most critical attributes for successful futures traders.
2. Be patient
“When do I jump?” Every trading day brings an unlimited number of trading opportunities. Waiting for the correct setup and trigger that match your trading plan allows you to concentrate on opportunities with the highest probability of success.
Fear of missing out (FOMO) is a trick your mind can play on you. It can make you lose your patience and take a trade when the market environment or timing isn’t right. You might experience FOMO if you decide not to make a trade and the market makes a move that would have resulted in a big winner. Remember, you can’t make every possible trade, nor capture every winner. You must try to stay focused and pick your best spots.
Patience also helps you understand that if you have a bad run, you shouldn’t try to make it up on one or two “Hail Mary” trades. Stick to the plan and grind it out if you must. Remember the goal is to stay in the game. You can’t trade if you lose all your money.
Patient traders are methodical traders, often opting for a trading plan with many small winning and small losing trades, versus just a few big winning and a lot of losing trades. By becoming a more patient trader, you can calm your mind, focus on tactics, and reduce some of the stress that comes with trading.
3. Be risk averse
You often hear the phrase, “You have to risk money to make money,” or ”Traders need to pay their dues before they become profitable.” These are rationalizations made by traders who didn’t practice good risk management when they first started trading. Applying an appropriate risk management plan for your account size on every trade will help improve your consistency, reduce your stress and avoid large account drawdowns.
Trading futures involves a high degree of leverage, which amplifies both profits and losses. Even small price movements can result in significant gains or losses. Being risk-averse means a trader is aware of the potential risks that can help them better manage their exposure and avoid taking on too much risk on any one trade.
By setting a strict set of risk management rules—including trade sizing and protective stop losses—and sticking to the plan, futures traders can better protect their valuable trading capital and have the best chance of achieving long-term success in the markets.
Practice Makes Perfect
Futures trading is not for everyone, and many traders try to get in the game before they’re ready, which almost never ends well. Like many professions, it’s a good idea to practice with a net, over and over, until you can prove to yourself that you can be profitable without large account drawdowns.
NinjaTrader offers a free, full-featured trade simulator that allows you to practice trading under real-world conditions with simulated dollars. You also get free access to all three NinjaTrader platforms—desktop, web and mobile—so you can refine your trading plan down to the last detail.
To have a chance at successful futures trading, a trader must master these three key traits
- Discipline: Follow a trading plan and stick to strict risk management rules.
- Patience: Wait for the right opportunities to arise. Don’t make impulsive decisions.
- Risk aversion: Manage exposure and protect capital from catastrophic losses.
By mastering these traits, a futures trader has the best opportunity of achieving long-term success in the markets while building a trader’s lifestyle. Remember, trading is a marathon, not a sprint, and it takes a trader’s mindset to master the craft.
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