* Are returns positive over a sufficient period to cover various market conditions? Does the trader earn significantly more than the risk-free returns of government bonds?
* Does the trader demonstrate good risk-adjusted returns (as measured by such indicators as Sharpe ratio)? Is the average/median size of winning trades greater than the average/median size of losers? Good risk-adjusted returns can be a great initial sign of a disciplined trading process.
* Does the trader demonstrate the ability to make money in different kinds of markets and in different kinds of ways? Such diversification tells us something about a trader's adaptability. It's great to make money in one kind of market, but rarely is that a sustainable business.
* Has the trader evolved in recent years? How have they grown? A trader who demonstrates ongoing improvement and growth is more likely to adapt to future market changes.
* Does the trader demonstrate a positive trading psychology, finding both joy and meaning in trading and rising to challenges through innovation and teamwork?
The above are useful criteria in assessing your progress and success as a trader. If you are firing on many of these cylinders, it is worth asking the solution-focused question: What have I been doing right? How have I been able to make progress as a trader? So often, future success comes from leveraging what we do best. More to come!
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