7/30/2025 - Personally, my most powerful predictor of trading success is when the trade idea lines up on multiple dimensions. Specifically, if the pattern I am tracking (for instance, a moving average crossover on the adaptive moving average indicator) is occurring on multiple time frames *and* if the idea is confirmed by backtested historical evidence (for example, superior returns following oversold breadth conditions), the odds of success rise quite a bit. Trading success comes from being willing and able to not trade until the lining up occurs. In that sense, the predictor of success is selectivity and the ability to refrain from trading when the picture is mixed--and the ability to size up trades when the odds are skewed in your favor. Not unlike poker in that respect.
7/29/2025 - In every performance field, elite performers spend more time preparing for performance than in actual performing. A basketball or football player spends more time in practice than in playing games. Olympians spend more time in training than in performing their events. Actresses and actors spend more time rehearsing their roles than performing on stage. Elite military teams spend more time developing and practicing their missions than in actually carrying them out. A powerful predictor of trading success is the amount of time and efforts spent preparing for actual trading. Time in front of the screens is not necessarily preparation. In sports as in markets, the rigor of preparation is how we earn success.
7/27/2025 - Here are a few of the best predictors of trader success that I've found during my years of helping trading firms with their hiring. The best candidates meet the following criteria:
* They can describe their edge(s) in great detail. Their descriptions include unique information that goes into their ideas and unique ways of entering/exiting trades for best reward relative to risk.
* They can explain why their edge works. Their reasoning is not correlational (I trade the X period crossover of the Y period average because it's worked in the past). Their reasoning is causal. They understand who is in the market, how those participants behave, and how to take advantage of their behavior. Causal edges are more likely to persist.
* They can provide specific examples of how their trading has grown/adapted/expanded over the past year. They are always looking for new edges and broadening their coverage. They develop many edges for different market conditions, different trading instruments, and different time frames. This breadth of edge provides diversification, helping them adapt and succeed when markets change.
The great traders aren't just looking to trade. They are continually building a business.
The best predictor of success is learning by doing and benefiting from the live role modeling of successful professionals. This is how young athletes develop, and it's how medical students mature into capable physicians. Trading psychology is not the best predictor of success. Indeed, problems in trading psychology often are the result of inadequate training. Mentoring is always live, in person, and conducted via teams. When you become part of a successful team, you internalize the mindset and best practices of success.
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