What makes a champion? System vs Psychology vs Money management

R

RobinHood

I've been trading for 3 years, and keeping extremely detailed logs.

I still haven't understood what it is that makes a champion trader. By champion, I mean the ability to manage $50million plus with superlative return. Really, the best in the industry.

Some say psychology - but this is just confidence in your system, adherence to stops, strict discipline ensuring no impulsive positions are taking.

Some say Money management - but this is just a safety net, if your a looser it will just take you longer to loose.

Some say trading system - Obviously it is nothing without the other three.


I'm of the belief that all 3 are important, but your system is the most important. How is it that some traders are able to return %70p.a+ on average over 5 years with millions , while other profitable traders may only make 30%+ over the same time frame with the same risk. This must be the method/system.

I'm still trying to develop the system that will make me the most money...

What do professional traders think? Perhaps they could enlighten me with some of their thoughts.

(btw I'm planning on heading into the industry. Going to college next year for commerce)



And another thing that has taken me ages to realize is that your trading log is useless if you don't have a trading system by which you can measure up your actions taken in the market. I.e. monitor your adherence to it etc.

I used to try optimize my system after different traders, but realized also that this was silly, as I was overoptimizing for specific issues which could destroy my whole system overall. ATM I don't have the kind of account equity to spend $2000 on some good system testing software, risk management cacls etc so I'm hoping to get into a firm with those kind of resources later on.
 
You need all three ingredients to realize your true potential as a trader:

1. having a system and psychology without good money management will lead you to eventually taking on too much risk and blowing out or the flip side of that would be never taking on enough risk to really maximize your trading potential.

2. having the correct psychology and money management without an adequate system for trading will yield you nothing but a slow death in the marketplace.

3. having good money mangement and a great system when you can't pull the trigger due to bad psychology (many a traders' problem, btw) will leave you sitting on your hands while opportunity after opportunity pass you bye-bye.
 
what happens is this

a real trader (and you got 2 more years to go) starts intra-day and as soon as he or she masters that, and yes it does take heck of a long time even if you are pushing yourself

after intra day, trader moves on to partial long term few days holding and still partial intra day

eventually a trader moves out of intra day out of desire to work less

and he relaizes that he can have the same profit with less work

but this requires true understanding of the market

bottom line is my young friend

if you REALLY LOVE this field, you will progress fast - 6 years

if you don't love it as much, you are looking at 10- 15 years
 
Good time to let the cat out of the bag.

People mistake psychology for discipline, two different departments when it comes to trading and possibly why traders don't look deeper into the market.

Discipline is when you have the mental order to follow your plans at all times without letting emotions affect your judgement that includes winnings and losses, trading and no trading.

Psychology is a completely different thing, a whole new department and where the real edge begins. This is where the real magic happens. Being able to place yourself in the shoes of your competitors, trying to see what they are thinking, how they will react to certain areas, exploit their weaknesses and isolate them in groups, for there are many reasons to buy and sell, combine their collective thinking and joining the group that you have determined to prevail while crushing the weak one with all you got as this creates the required momentum that you need to execute your winning trade.

I will make the bold statement to say that most eternally fail to ever get the level of psychology required to beat the market.

NN
 
Quote from riskfreetrading:

There are other dimensions that you are missing.
More...

do you mean me or the OP ?

it isn't often that I miss something, I would be interested what you mean
 
Quote from APA:

do you mean me or the OP ?
More...

neither, but addressed at the restriction of trading components as a tripode.

PS: How long have been trading? What is your success rate, your r/r ratio, your holding time, and the time scale you time your trades at?
 
Quote from riskfreetrading:

neither, but addressed at the restriction of trading components as a tripode.

PS: How long have been trading? What is your success rate, your r/r ratio, your holding time, and the time scale you time your trades at?
More...

you and me don't belong here

lets take this to PM

I'll PM you, but in return I am interested in little about you and what the heck are you doing on ET
 
Quote from RobinHood:

I've been trading for 3 years, and keeping extremely detailed logs.

I still haven't understood what it is that makes a champion trader. By champion, I mean the ability to manage $50million plus with superlative return. Really, the best in the industry.

Some say psychology - but this is just confidence in your system, adherence to stops, strict discipline ensuring no impulsive positions are taking.

Some say Money management - but this is just a safety net, if your a looser it will just take you longer to loose.

Some say trading system - Obviously it is nothing without the other three.


I'm of the belief that all 3 are important, but your system is the most important. How is it that some traders are able to return %70p.a+ on average over 5 years with millions , while other profitable traders may only make 30%+ over the same time frame with the same risk. This must be the method/system.

I'm still trying to develop the system that will make me the most money...

What do professional traders think? Perhaps they could enlighten me with some of their thoughts.

(btw I'm planning on heading into the industry. Going to college next year for commerce)



And another thing that has taken me ages to realize is that your trading log is useless if you don't have a trading system by which you can measure up your actions taken in the market. I.e. monitor your adherence to it etc.

I used to try optimize my system after different traders, but realized also that this was silly, as I was overoptimizing for specific issues which could destroy my whole system overall. ATM I don't have the kind of account equity to spend $2000 on some good system testing software, risk management cacls etc so I'm hoping to get into a firm with those kind of resources later on.
More...

based on whats been said here as well as the many books and interviews i've listened to don;t think commerce will make you automatically a good trader there is no degree that teaches you the skill set you need to be succesful in this industry that said it will probably certainly help.

myself I am going for economics/commerce

I hear from all my older buddies all commerce teaches u is how to be a "corporate drone" <-- hardly the mentality you need to be successful as a trader/manager of large $$

best thing to do is just do it slowly with small $$ to gain experience thats what i am doing now.

just my $.0023421
 
Quote from APA:

you and me don't belong here

lets take this to PM

I'll PM you, but in return I am interested in little about you and what the heck are you doing on ET
More...

Feel free to PM me. What I am doing here? Good question. I started asking myself that question lately. I think there are many people who should not be here, but there are some fine people (but they are the tiny minority, just like in the market).

But I also think that those who should not be here are, after a second thought, might be useful as well. Just like in the market. In the market they pay, here in ET let me say this: my tools are like a knife, is it meets and touches some rough surface (the "-" people at ET), sure it is not pleasant, but there is a benefit: my knife gets sharper. And I use it in the real battle against those who helped sharpen it :)
 
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