Characteristics of a Successful Trader

[caementarius]

Great thread. I think it's an opportunity for honest self-assessment inasmuch as that is possible.

I think I need to work on the tightwad factor. A lot of the frugal folks I know seem to have been born that way - or they are old and grew up during the great depression. How does one change themselves? Perhaps only through remorse.

A related mistake I have made is not treating my capital as precious as it should be. I didn't put pressure on myself and had an easy-come-easy-go attitude. I didn't want to "trade scared" - but holding onto capital has to be a priority. Not worrying about losing X amount, you'd be surprised at how fast the market can arrange for its removal.

 

[fluttrader]

Quote from ProfitTakgFool:

EricP, absolutely exceptional thread.

One of the best threads , I have read so far on ET

 

[trackstar]

Just because I think this thread is an amazing one, probably one of the best as far as getting a successful trader to the next level, I will post what I read every single morning. I never place a trade without going through these.

I also owe this to someone who has helped me to make these documents here on ET. Some may laugh and think what I have is stupid but I can tell you that it has made me SO much more consistent that I am now holding very large % gains at my account at the end of the week that was never possible before.

Mental stability is more important than any other characteristic in trading (esp if you are discretionary trading) as there is such a fine line between being profitable and losing money. I have had profitable strategies for a long time before I was ever able to extract consistent profits from the market. The only thing holding my game back was myself.

My advice ---> watch the movie Revolver. There are more trading similarities there than any other movie I have seen with regards to things you must overcome to succeed.

 

[Dackster]

If there was a secret solution then there would be no market!

 

[DaveN]

Awesome thread, Eric. Thanks for seeding these ideas. I'm looking forward to following all the thoughts (and perhaps debates) that branch out of this.

There's an aspect of HUMBLE that you discussed above that jumps into my mind, and that's the aspect of an associated openness. By that I'm referring to thought and a trader's mindset.

The trader is not quick to judge and remains open to observe, record, and quantify without bias. Rather than trying to fit market action into a predefined set of beliefs, the trader observes and adapts, with a clear head that's open to new ideas and associations.

I agree with what you stated above, great emotional swings are counterproductive. While it may seem motivating to some, I think it may be a hindrance or barrier to engaging with the market in an open way. Keepin' the "heat" out of the head, as it were...

 

[caementarius]

Quote from Dackster:

If there was a secret solution then there would be no market!

The way I look at it is there is no secret solution to many things where some do better than others. It doesn't have to be a secret if it's hard.

 

[EricP]

A thanks to trackstar for reminding me (with his excellent daily read) of the critical importance of personal responsibility.

Successful traders <b>ARE RESPONSIBLE</b> for their results. They take ownership of their bad trades, while sometimes crediting good fortune for their good trades.

First and foremost, though, they accept responsibility for all trading results. It was NOT the fault of the stock broker (who chose them?). It was NOT the fault of the internet connection (who picked the ISP, or didn't have a backup?). It was NOT the fault of their trading buddy that recommended the trade (who chose to take the trade?).

Successful traders DO NOT, <b>EVER</b> blame other people or events for their failures. Successful traders accept responsibility, and where ever possible, seek to prevent future recurrences as much as possible.

Failing traders, on the other hand, make excuses.

=> Don't make excuses. Be accountable to yourself in your trading.

 

[EricP]

Quote from DaveN:

The trader is not quick to judge and remains open to observe, record, and quantify without bias. Rather than trying to fit market action into a predefined set of beliefs, the trader observes and adapts, with a clear head that's open to new ideas and associations.

Very well written. I agree 100%.

 

[traderpro]

=> Don't make excuses. Be accountable to yourself in your trading. [/B]

I agree. We have some traders who are verbal. Trading with no emotion is key, hardest thing to do. With all that emotion in your trading it will take its toll on your body and mind. In the end the money wont be worth it.

 

[trackstar]

Quote from traderpro:

I agree. We have some traders who are verbal. Trading with no emotion is key, hardest thing to do. With all that emotion in your trading it will take its toll on your body and mind. In the end the money wont be worth it.

A terrible toll. I am very young and in amazing shape and experienced a big ding in my health.

Blood pressure at high 130s to low 140s. I am 6'2 190lbs that runs 5-10 miles 3 times a week and lifts weights religiously. Needless to say once I got true emotional control my blood pressure dropped like a rock and is back to a perfect 120/65.