Characteristics of a Successful Trader
- Thread starter EricP
- Start date
Good point. Discipline is a word you'll often hear in connection with successful trading, and with good reason. The need for discipline probable fits well with the discussion of being logical, not emotional. If you can't follow your trading plan, then you're just blowing in the wind, and your odds of success are greatly reduced.
I've always liked the quote "Plan your trade, trade your plan." Without discpline, even the best trading plan can lead to failure.
A successful trader is able to manage the uncertainty and chaos that arises from family, friends, and lovers. It can be very difficult to achieve this, especially if the trader has been born and raised in a world with little to do with the financial world or in an environment with traditional views towards money and entrepreneurship.
I remember reading a trader write about a '$15,000 hair dryer' that resulted from losses he incurred while working through some drama with his wife during the trading day...
I remember reading a trader write about a '$15,000 hair dryer' that resulted from losses he incurred while working through some drama with his wife during the trading day...
Great thread!
After reading it I was reminded of a book I read a few years ago.
A little google research led me to the book and the story in the book that stuck out.
The book is "Enhancing Trader Performance" by Brett Steenbarger.
The entire chapter (attached as a PDF below) is worth reading but "A Tale of Two Traders" is part I found interesting.
I have always been a little mre emotional than others when trading.
Not the guy that yells and screams and pounds the desk after breaking his keyboard but more verbal than others when things dont turn out like expected.
For me getting upset and verbal is ok but STAYING that way is not as it impacts my trading decisions
I believe its very hard to stay emotionless when you are dealing with anything you are truly PASSIONATE about.
Great thread and thanks for sharing!
P.S. PDF wouldnt attach for some reason but here is the link:
http://media.wiley.com/product_data/excerpt/67/04700386/0470038667.pdf
After reading it I was reminded of a book I read a few years ago.
A little google research led me to the book and the story in the book that stuck out.
The book is "Enhancing Trader Performance" by Brett Steenbarger.
The entire chapter (attached as a PDF below) is worth reading but "A Tale of Two Traders" is part I found interesting.
I have always been a little mre emotional than others when trading.
Not the guy that yells and screams and pounds the desk after breaking his keyboard but more verbal than others when things dont turn out like expected.
For me getting upset and verbal is ok but STAYING that way is not as it impacts my trading decisions
I believe its very hard to stay emotionless when you are dealing with anything you are truly PASSIONATE about.
Great thread and thanks for sharing!
P.S. PDF wouldnt attach for some reason but here is the link:
http://media.wiley.com/product_data/excerpt/67/04700386/0470038667.pdf
This is the first thing I thought of also when reading Eric's thoughts. One thing I would like to add is that the best way to succeed in doing this is to surround yourself with better/bigger traders than yourself. If your daily goal is to make $500/day and the guys around you are doing $5000 then you aren't going to be satisfied with that goal for long. If the guys around you are only doing $200/day then you feel like a king and get lazy.
It's about detaching yourself from your ideas about what is a lot of money. You can't compare your trading income to friends in other fields.
I know that's not exactly what Corey was trying to say, but it's related.
There are many kinds of successful traders ... so very hard to look for a consistent set of characteristics or traits, if any, at all.
For some, successful trading can simply be making 1K a day through trading, and look no further. As long as someone having this goal, made it and consistently get it, I can sure call that person a successful trader.
For some, successful trading means making more $ every day, the more the better, that is a much harder goal. Of course most beginner would choose this kind of goal that does not make much sense as there would be a very limited # of people who can do it.
Traders are not zen masters. Cursing, getting angry over a trade, etc. are simply an expression of one's emotion. The key is to understand who you are and trade with a style that fit your personality to reduce the overall emotional swings.
For discretionary trading, that is especially important because we not only trade our setups, manage the risk of the positions in real-time, we are also subjected to the emotions related to trading. Being able to observe your own emotional state and being able to react to that logically ... I guess that defines a successful state of mind for trading.
e.g. I remember someone who after getting out of a very bad trade, would break the pencils he used to write his order tickets (yes, very long time ago) ... walk away for 5 to 15 mins. Then he look for next trade right after.
For some, successful trading can simply be making 1K a day through trading, and look no further. As long as someone having this goal, made it and consistently get it, I can sure call that person a successful trader.
For some, successful trading means making more $ every day, the more the better, that is a much harder goal. Of course most beginner would choose this kind of goal that does not make much sense as there would be a very limited # of people who can do it.
Traders are not zen masters. Cursing, getting angry over a trade, etc. are simply an expression of one's emotion. The key is to understand who you are and trade with a style that fit your personality to reduce the overall emotional swings.
For discretionary trading, that is especially important because we not only trade our setups, manage the risk of the positions in real-time, we are also subjected to the emotions related to trading. Being able to observe your own emotional state and being able to react to that logically ... I guess that defines a successful state of mind for trading.
e.g. I remember someone who after getting out of a very bad trade, would break the pencils he used to write his order tickets (yes, very long time ago) ... walk away for 5 to 15 mins. Then he look for next trade right after.
So very NOT true.
You have provided us with YOUR definition of success. My definition of success has nothing to do with "becoming rich". Yet, by my standards, which are the only standards that matter to me, I am rich, in many ways, and therefore according to you I am wealthy, therefore I am a success. You really should re-read the "humble" attribute.
Success is a result.
Failure is a result.
A winning trade is a result.
A losing trade is a result.
A break-even trade is a result.
No result is better or worse, nor easier or harder to attain than any other result. They are just results. You may "want" one result over another, but that does not make the "wanted" result any more valid. The result itself is "wealth".
Cliche I know, and generally thought of in a financial sense, but ... being poor is a temporary condition. Poverty is a state of mind.
Good thread
Osorico
There is an ancient saying that to live happy, live in secret. Keeping secrets has many psychological benefits and it came to mind when I read your story. I think you're on the right track.