There had been a number of heated debates that aim to determine if successful traders are made or born to become one. Let’s take a professional pianist for example. A child is not born with the talent for playing piano; instead, the child trains, studies, and practices in order to play beautifully. Although this metaphor is not the same as a successful trader, it gives us a hint of how successful individuals come into existence.
The Turtles experiment
In the past, there were 2 men namely William Eckhardt and Richard Dennis, who were involved in a debate on whether successful traders are born or made. Eckhardt believed that becoming a successful trader comes from within and it cannot be taught, while the latter argued that anybody can become a successful trader with enough education and practice.
In order to prove their theories, they made an experiment involving 21 men and 2 women without prior trading experience. Dennis spent 2 weeks to train the recruits which he named “Turtles”. For 2 weeks, he taught them about a simple trend following system, trading different commodities, currencies, and bond markets, buying when prices increased above their previous range, and selling below their previous range. They were taught different techniques in cutting loses and maximizing profits.
After their training, they were given a month of trial trading period. After the trial ended, Dennis gave each of the recruits who showed a successful performance a trading account ranging from $250, 000 to $2 million from his own money.
Five years later, the Turtles reportedly earned a total profit of $175 million. Take note that these people are all beginners in the market before they started with the trading. This experiment is just a living proof that a successful trader is made and is not inborn.
What does it take to become a successful trader?
Although one cannot succeed in trading without access to the proper resources, through the experiment, we can conclude a few pointers. Trading requires knowledge, perseverance, patience, and discipline.
There are a lot of people who simply want to throw themselves into a den full of lions by trading without proper training. Preparation makes the difference between trading and gambling. That is why demo accounts are important in shaping a beginner’s mind and strategies. Research is another key to gain the required knowledge.
Perseverance is also a requirement as it is unavoidable for beginners to experience a few losses at the start. One needs to learn how to stand back up again after falling a few times.
The market doesn’t shoot straight up or stumble at an instant in a single day. Some trends tend to have a long span and minimal movements so patience is a must in order to make significant profits.
Discipline is one of the cores. You need discipline to stick through your trading rules and strategies. It keeps you from swaying far from what you planned in the beginning and become a systematic trader.
Read about the importance of following a trading plan.
Everyone should stop believing in the notion that becoming a successful trader is innate. Instead, they should focus on shaping themselves and training to become one. Whatever a person sets in his mind, he should keep with it and persevere until he reaches his goal. It is nurture, not nature that is essential in the making of a successful trader.
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