Characteristics of a Successful Trader

A great thread to read for the start of my new year. Thanks for sharing.

Making it in trading is none other than self-awareness, self-control and risk aware. We can only control our hands, our risks, but not the markets and not our profits.

I think successful trader has a system that suits he follows faithfully. Does one prefer trend following, counter-trend trades, scalping, or swing? Does focusing on one instrument works for you or gets you bored? Do you get careless if you watch too many markets? Tendency to over trade, take profit too early, stop out too late. Those are all tied to one's personality. If one can find a system such that all the system's parameters suit your personality, one will probably have an easy time following the system with full faith, and thus the success will follow.

Always be aware of our own conditions, physical and mental. If we are sleepy, hungry, greedy from a winning streak, paralyzed from a losing streak, no trade is better than trading clouded or with filtered glasses.

Always know our risk tolerance for the trade, and get ready the exit before submitting the entry ...

That's mostly it, I think ...

Just want to write down my words for myself and perhaps a few others.

Best wishes to everyone in your trading!
 
Quote from TSGannGalt:


My net trading profit is...

> USD$152M.
More...

You made EXACTLY 1000x what I made.:) :D

Tomorrow, I will begin scalping 3000 contracts instead of 3 and see what happens...LOL
 
<i>"If one can find a system such that all the system's parameters suit your personality, one will probably have an easy time following the system with full faith, and thus the success will follow."</i>

Well, sort of. A discretionary trader IS the system itself. All entry - management - exit decisions are based upon whatever criteria, but the emotional self-control of each individual is 100% responsible for results.

Said another way, each and every individual is 100% personally responsible for their trading results. They either create, enhance or negate any edge for any approach, discretionary or systematic. No approach exists that will negate or overcome negative = destructive human emotions. Ever.

The fallacy exists that mechanical system trading negates emotional control. Not true. Every system trader goes thru the failure process of shutting off their system in a drawdown, sitting idle thru the subsequent recovery period, turning on the system at next peak equity high, riding into next drawdown, shutting off in the equity dip, repeat the process until they quit. Some survive and emerge from that self-destructive behavior to enjoy profitable system trading from there.

Trading is ridiculously easy... when it pertains to having a methodical edge in any given market. Managing oneself thru the daily process of maintaining that edge is absolutely everything. One hundred people can have the exact-same parameters to trade with... but only five or ten will manage themselves properly for success.

That is a universal law in our profession regardless of all else, there is no circumventing that fact. None of us follow any system... we are each the system itself.
 
Quote from TSGannGalt:
...My net trading profit is...
> USD$152M.
More...
How much of that is yours? LOL

This is same as the $500 daytrading guy saying... I bought $45,000 of equities today (one ES contract).
 
Quote from austinp:

The fallacy exists that mechanical system trading negates emotional control. Not true. Every system trader goes thru the failure process of shutting off their system in a drawdown, sitting idle thru the subsequent recovery period, turning on the system at next peak equity high, riding into next drawdown, shutting off in the equity dip, repeat the process until they quit. Some survive and emerge from that self-destructive behavior to enjoy profitable system trading from there.
More...

This may be true for some systems traders, but not for others. A rigid systems trader would incorporate and implement methods to systematize the process of shutting off their systems in a drawdown, subsequent reactivation, etc. The following thread discusses one such way for systems traders to manage these decisions:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=36083&highlight=activate/deactivate
 
<i>"A rigid systems trader..."</i>

Key words... replace "rigid" with "fledgling" and that's what I meant.

Before a systems trader experiences and survives the full gamut of emotional churn following computer bots, they will inevitably make all of the emotional mistakes involved. Most aspiring system traders do not survive that emotional learning curve, no different a process than discretionary traders.
 
Quote from EricP:

Mike,

Your wife was right, you should tell it like it is (in a civilized manner, of course), and I personally welcome your thoughts/comments.

While I agree with much of what you have said, I'll comment on some of the areas where I disagree. Probably the best way to sum up my thoughts are with a new common trait from the successful traders I know. I was tempted to add this some time ago, but couldn't find a time in the thread when it seemed appropriate to add.

Successful independent traders (IMO) <i>don't feel the need to prove anything to anyone</i>. The ones I know don't care if anyone believes that they are successful traders. They don't care if their neighbors or family realize the extent of their success. They certainly don't care if others on an anonymous message board believe they are successful in their trading. Independent traders that do care about such things, are more likely to be wannabe or deveoping traders.

Seriously, for a trader that is truly successful, why do they need or want the attention drawn to their success? Granted, if they are managing OPM (such as yourself), then the publicity generates added investors and can be worthwhile. But, for an independent trader, the added publicity brings nothing positive, and therefore, most such traders would rather remain low-key and downplay their successes.

"<i>You know what humility breeds? : the inability to sell yourself and allow yourself the acclaim you deserve."</i> => The (independent) traders I know don't need to sell themselves, as they have nothing to 'sell'. Also, they have sufficient self satisfaction, that they don't want or need the acclaim of others.

Getting back to my main point, about not needing to prove anything to anyone. I think another example is that you'll rarely see truly successful traders engaging in immature arguments or 'flame wars', as it serves no purpose. They typically just prefer to drop the developing argument, realizing that they have no need to prove themselves (which is also why I've added three people to my ignore list from this thread => engaging in an argument would just push the thread even further off track).
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Even with the inclusion of this last (and very key) point, you have described in this, and the previous pages, the most successful trader I personally know... and I know many traders. Every point you put forth describes this person to a "T". I just find that interesting.

Great thread Eric and thx for sharing.

B
 
What a fabulous thread. EricP thank you sincerely. I have recently started trading and this is wonderful. I have already swallowed a bitter pill of ignoring my rules and blowing out a large amount. I think that will be the best trade I ever made when I look back in 5 years. Thanks again.
 
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