Trader Performance: What Contributes to Profitability?

What makes a trader successful? I've spent probably as much time researching this question as researching the markets. It's a topic that has occupied my articles, my thinking about how to trade, and an entire section of my personal website--not to mention a book I've recently completed and due out this fall.

Part of the performance equation is continuous learning; turning ordinary experience into a platform for self-improvement. Part of it, too, is working on oneself and cultivating our ability to exploit edges in the marketplace and sustain our intentions. Many different problems can interfere with performance--trading woes as well as emotional ones--but hard work on these is not enough; we need to structure our development in the right ways. I've learned quite a bit from observing successful traders, including--alas--how fleeting that success can be if the trader's development process is not ongoing.

My return to regular trading in the past two months has provided a very hands-on sense for what contributes to performance. I started out a bit shaky, but have since maintained solid profitability. If I'm honest with myself, I have to say that I haven't really become better at making money. Rather, I've become better at not losing it. And I think that's an important distinction.

The chief factor that impacts my profitability, I believe, is my selectivity. There are some days--I can feel it!--when I sit down at the trade station and I'm eager to trade. Other days, I seem to hit that Zen place where I can let the trades come to me. It's like that line in Reminiscences of a Stock Operator: it's not the trading that's makes you money; it's the sitting. When I don't *need* to trade and stay selective, it's as if I allow a different part of my brain to synthesize all the research I've done and all the market action I'm seeing. Out of that synthesis, I get to the point where I truly *see* a trade developing. And I jump on board.

Here's the great dilemma of performance: It takes a phenomenal act of will to develop ourselves and become elite performers--and yet, at the moment of actual performance, we cannot will ourselves to win. The very act of trying to win--attempting to force victory--interferes with performance itself and our ability to access all of our accumulated experience. It takes, for example, considerable will to practice one hundred free throws at each basketball practice. The act of making a clutch free throw during an actual game, however, has to come effortlessly. Aim the ball--try to invoke will--and all you'll hear the the clunk of the ball against the rim.

So what is the key to performance success? Perhaps this: the ability to let go of will after having cultivated it throughout preparation. After so much effort pursuing success, the gold ring goes to those who allow success to find them.