It is important to understand the type of trader you are, particularly when you are evaluating the success of your trading. Here we will look at the differences between dependent traders and independent traders to help you understand which category you fall into. We will then look at the benefits of becoming an independent trader and how to go about doing that.
The Dependent Trader
A dependent trader is a trader that does not rely solely on his own strategy and plans when making trades. Rather, this trader always looks for the opinions of others before moving forward. This is most commonly due to lack of experience or lack of confidence. For example, you follow your strategy and decide to make a trade, but before you set up the trade, you go online to search the Internet for reassurance that your trade follows the opinions of everyone else. You see many opposing views and decide not to take the trade in the end. Your trading decision was not based on your strategy and trading plan, but rather on the views of other people.
The Independent Trader
An independent trader follows their strategy and trading plan from beginning to end. They do not waste valuable time and energy searching for and reading other people’s opinions. Rather, if a trade fits with their strategy, they go for it. An independent trader realizes that by changing trading plans based on other people’s opinions, you are not sticking to your strategy and are, in fact, trading emotionally.
The aim of trading is to become an independent trader. There is nothing worse than deviating from your trading strategy to follow someone else’s opinion and then missing out on a trade that would have gone in your favor. There is a lot of talk about creating a trading strategy and sticking to it and being a dependent trader goes against this rule. The real question is how to become independent and stick to your own trading strategy without getting sidetracked by all the opinions that are out there.
You need to start by developing a trading strategy that you believe in and that works in the long term. Spend time tweaking your strategy until it is right for you and for your trading personality. You then need to follow it. Trust your own instincts and methods, rather than those of other people. Avoid browsing the Internet and reading the opinions of other people once you have decided on a trade. This takes up a lot of time and with so many opinions and with so much contradictory information online, you are sure to become confused or unsure of yourself once you start reading it all. If your trade fits in with your strategy, make the trade. Other people’s opinions are just that – opinions. They may be following a different strategy that does not work for you and so you should not be interested in their view on a single trade. Remember, the best person to worry about your money, is you.