Sunday, October 18, 2009

Ten Characteristics I See Among Successful Traders

There's no one formula for trading success, but there are a few common denominators that I've tracked in my years of working with traders:

1) The amount of time spent on their trading outside of trading hours (preparation, reading, etc.);

2) Dedicated periods to reviewing trading performance and making adjustments to shifting market conditions;

3) The ability to stop trading when not trading well to institute reviews and when conviction is lacking;

4) The ability to become more aggressive and risk taking when trading well and with conviction;

5) A keen awareness of risk management in the sizing of positions and in daily, weekly, and monthly loss limits, as well as loss limits per position;

6) Ongoing ability to learn new skills, markets, and strategies;

7) Distinctive ways of viewing and following markets that leverage their skills;

8) Persistence and emotional resilience: the ability to keep going in the face of setback;

9) Competitiveness: a relentless drive for self-improvement;

10) Balance: sources of well-being outside of trading that help sustain energy and focus.

Over the years, I've learned to respect more the traders who sustain success over many years than the traders who have blowout individual years of profitability. The above criteria are a kind of checklist one can use to determine if you share the qualities I see among those career successes.