Updated from its original posting on 2012-08-17
It is often said that, when it comes to trading, you should play your strengths. Most forex trading psychology articles, however, focus on minimizing weaknesses rather than identifying and improving one’s strengths.
This is probably because there’s a common notion that when you tackle your weaknesses you automatically enhance your forex trading performance, but that isn’t always the case. This time around, let’s focus on a different approach by building your strengths first so that you can work around your shortcomings.
But before we get ahead of ourselves, what exactly are strengths and why is it important to identify them? Simply put, a strength is something that you’re good at. But unless you apply that particular strength in achieving a productive outcome, you might not be able to recognize it or you might even see it as a weakness.
So how can you identify your trading strengths? Here are a few steps that might help:
1. Review your forex trading journals
If you read my trading psychology blog regularly, you’d know that I often emphasize the importance of keeping a detailed forex trading journal. So put them to good use! Review your trading logs and pinpoint those instances where you think you performed well.
Identify your top ten most profitable trades and take note of the following: Which pairs did you trade? Did you stick to your trading plan? Did you base them solely on technicals, fundamentals, or were they a combination of both? How long did you hold on to your trades? Aside from asking yourself these questions, identify other common factors that helped you win those trades.
2. List down your strengths as a trader
I know that it can be a daunting task, but renowned trading psychologist Brett Steenbarger came up with the idea how we can go about it. Citing the VIA Survey which was created by the VIA Institute on Character to help people assess their strengths, I need you to identify your top five:
creativity, curiosity, open-mindedness, love of learning, wisdom, bravery, persistence, integrity, vitality, love, kindness, social intelligence, citizenship, fairness, leadership, forgiveness, modesty, prudence, self-control, appreciation of beauty, gratitude, optimism, humor, spirituality
Done? Now what I want you to do is think of SPECIFIC ways how you could utilize them in your daily forex trading approach. For example, I ranked the love of learning as my biggest strength. I think I can utilize this more by studying different systems and by reading more books on forex trading.
3. Ask for other people’s opinions
Although self-reflection is helpful, we may overlook a few traits that other people can easily identify in us. So take the time to ask for outside opinion. Ask your colleagues, trading manager or coach, and friends what traits you have which they think make you a good trader.
Compile their input and compare them to your own list. You might be surprised to see how other people perceive you.
Just like identifying your weaknesses, it is equally important to know what you’re good at, regardless of whether you’re on a losing streak or looking to raise your game.
Don’t get me wrong. The point of this article is not to ignore the importance of being able to identify your weaknesses. I just think that identifying your strengths is just as important in realizing your full potential as a forex trader.