Characteristics of a Successful Trader
- Thread starter EricP
- Start date
I would certainly think it would be easier if they were natural born traits, and the trader didn't need a major personality change to get there. Then again, I also don't want to imply that a trader must exhibit those traits to be successful. Those characteristics are just some things I've noticed from my experiences, but not the result of a widespread study with statistically significant results.
Some of those traits seem more easily 'learned' than others. Being humble and being skeptical might be things learned by experience, after the market pounds you down repeatedly in your trading. Many of the other traits, I would think, would be much harder to change from your natural tendencies, but I'm no psychologist.
Regarding programmers... I assume you are asking about systems traders, or more specifically automated traders. I think the same things apply for them, and would add that automation would even be a 'solution' for otherwise good traders that tend to be emotional versus logical, leading to discretionary trading losses. By automating their trades, they are able to remove the emotional aspect, and trade in a fully consistent way. This can be an excellent 'cure' for traders with chronic trading losses created by not following their trading strategy.
You reminded me of someone, who, by the time he died, made it to the newspaper for more than a week in Hong Kong.
He was a trader trading at a bucket shop. His initial stake came from borrowed $$$ at about $100K HKD. He traded at a bucket shop all the time and lived a modest life.
He had more than $100,000,000 HKD by the time he died.
No one, including those trading right next to him everyday, believe that he had amassed such fortune. He was well known among the "traders" in the bucket shop that he chose to eat his lunch at the afternoon special pricing time period ...
The "Millionaire Next Door" I guess hah.
That is what I call a wasted life. He could have done so much, yet chose to concentrate on .... getting a lunch special. I bet his offspring did enjoy the windfall and laughed all the way to the Ferrari dealership, while his only experience in life was the taste of a cheap chinese food takeout special. Truly sad.
i was actually thinking of posting this on it's own for about a month, but it seems like this thread is the perfect place.
up until a few months ago, i've been managing traders for about 2 1/2 years. i've had success helping people become profitable, and i wanted to share what i feel the people i know who do well have that those who struggle don't
for anyone who's struggling, or on the verge of becoming profitable, or even someone who's read extensively on trading psychology this will probably be redundant but regardless, i hope it can help someone. and i can also assure you 100% that if you feel you have difficulty in any of these areas, some focus on them will make all the difference in your results.
#1 Constant, and tireless self-analysis
This is BY FAR what I've witnessed in successful traders that doesn't exist in people who struggle to make money. anyone I know who does well can tell you piles of statistics on all the trading strategies they have. they can tell you and explain to you ratios of winners to losers historically, how it's affected by seasonality, etc. they can tell you different ratios of there max wins to losses and they compile this sort of data without rest. it seems logical enough, as it's difficult to up your size without knowing with certainty that what you are doing works, and that you've not just been on a hot streak. but you would be surprised how many people no very little about how often they are right, how often they are wrong, etc. they know little based on anything other then if they are positive at the end of the month.
#2 Logic
This, like #1 is just as simple as it sounds. The people I know who do well don't destroy a monitor everytime a trade doesn't work. Of course this is tied in a lot with self analysis, because if you know what you are doing is going to work over an extended period of time, it's a lot easier to not have a seizure when you lose some money. I'm sure there's plenty on this forum who trade discretionary as well, and this works on the same level I think, just rather then having your trust on a carefully calculated statistical edge, it's on your own ability to recognize profit opportunities. this type of trader (discretionary) recognizes that based on what he does he's right X times out of 10, and on those X times he makes 1.7 more then when he loses (or whatever)
in a nutshell, i think these are the two things that separate those who can from those who want to. it probably sounds ridiculous if you've been struggling and put your effort into developing a more complicated entry system as a means to trade better.. but try focusing a little more on these areas and I think you will see improved results
hope it helps
up until a few months ago, i've been managing traders for about 2 1/2 years. i've had success helping people become profitable, and i wanted to share what i feel the people i know who do well have that those who struggle don't
for anyone who's struggling, or on the verge of becoming profitable, or even someone who's read extensively on trading psychology this will probably be redundant but regardless, i hope it can help someone. and i can also assure you 100% that if you feel you have difficulty in any of these areas, some focus on them will make all the difference in your results.
#1 Constant, and tireless self-analysis
This is BY FAR what I've witnessed in successful traders that doesn't exist in people who struggle to make money. anyone I know who does well can tell you piles of statistics on all the trading strategies they have. they can tell you and explain to you ratios of winners to losers historically, how it's affected by seasonality, etc. they can tell you different ratios of there max wins to losses and they compile this sort of data without rest. it seems logical enough, as it's difficult to up your size without knowing with certainty that what you are doing works, and that you've not just been on a hot streak. but you would be surprised how many people no very little about how often they are right, how often they are wrong, etc. they know little based on anything other then if they are positive at the end of the month.
#2 Logic
This, like #1 is just as simple as it sounds. The people I know who do well don't destroy a monitor everytime a trade doesn't work. Of course this is tied in a lot with self analysis, because if you know what you are doing is going to work over an extended period of time, it's a lot easier to not have a seizure when you lose some money. I'm sure there's plenty on this forum who trade discretionary as well, and this works on the same level I think, just rather then having your trust on a carefully calculated statistical edge, it's on your own ability to recognize profit opportunities. this type of trader (discretionary) recognizes that based on what he does he's right X times out of 10, and on those X times he makes 1.7 more then when he loses (or whatever)
in a nutshell, i think these are the two things that separate those who can from those who want to. it probably sounds ridiculous if you've been struggling and put your effort into developing a more complicated entry system as a means to trade better.. but try focusing a little more on these areas and I think you will see improved results
hope it helps
Great observation. This turned my trading around more than any other factor. Now I have all my historical trade data, can classify any trade I make by strategies, know what strategy is helping and which is hurting performance, have all the what-if scenarios played out (holding on to the trade an hour longer, abstained from averaging in, etc).
It sure helps if you have numerical skills and can work with a spreadsheet or database.