What It Takes To Become An Elite Trader

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Alan Farley

03 Nov, 2017

in Day Trading & Scalping and 1 more

Millions of traders test their skill in the financial markets each year, but most are destined to lose their stakes and walk away with their tails between their legs. A select few defy the odds, churning out profit after profit over long periods, building the wealth, security and wellbeing that others just dream about. So what separates these elite traders from the mediocre pack and how can you gain membership to this exclusive club?

First, let’s consider what isn’t required to become an elite trader. You don’t need to take special courses or move to Manhattan and work on Wall Street for a decade or two, although many elite traders follow that path. Nor do you need a huge stake to start your journey, because you already possess the tools for slow and steady wealth creation. Finally, you don’t need to trade in a prop shop environment, heading into work each morning to commiserate with other like-minded individuals.

So, what does it take to rise above the crowd and supercharge your trading results?

For starters, treat trading as a business, not a hobby or a slot machine. This takes effort, because most humans are burdened with deep-seated money issues that rise to the surface during risk-taking. Overcome these head winds by drafting a business plan that sets forth a budget for required tools, like real-time news and charts, as well as by listing the markets, instruments and strategies you’ll trade. Complete your plan with a realistic snapshot of monthly and yearly profit targets.

Keep detailed records of your trades, updating nightly and reviewing weekly for strategic adjustments. Supplement this work with a daily journal in which you post your observations and ideas, then draw upon the contents to add new features to your strategies and risk-control techniques. Once record keeping is in place, settle in for the long haul because you need to pay your dues over three to five years to gain the insight needed to compete with the predatory crowd moving modern markets.

Become a specialist as early as you can in your trading career, choosing specific markets and styles that suit your temperament and knowledge base. You’ll need to find and master multiple trading edges, in which positive results for specific strategies can be reproduced at will over dozens of positions. All effective edges have one thing in common – an effort is made to control risk before seeking profit. Master that single concept and you’ll be well on your way to elite status.

Choose information sources wisely. It’s easy to get caught up in the media circus, watching an endless parade of talking heads spout opinions that have no bearing on your daily workflow. Instead, turn off the television and subscribe to a real-time news service that gets you the facts, unimpeded by bias or emotion. Add a selective Twitter feed, following no more than 75 carefully curated sources and you’ll be watching the same news flow as Wall Street’s finest.

Now comes the tough part. To become an elite trader, you need to learn from the best. That’s a tall order because self-proclaimed gurus are everywhere, hawking in their chat rooms and newsletters. Sadly, few of these folks have the information, experience or long-term track record you need to raise your trading game to elite status. However, rather than avoiding these folks while seeking a mentor, it’s better to sample as many teachers, styles and approaches as possible to find out what works for you … and what doesn’t. In the process, you’ll come across a handful of helpful teachers who will yield a lifetime of trading knowledge.

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The author of the article describes a number of things that are important to success. While I don't disagree with them, most of them are generic in nature and are just as applicable to any other profession or business endeavour.

Importantly is trading a business or a profession? If it is a business, then the focus is developing core business practices. If it is a profession, the focus is on developing core competencies.

If it is a profession, can core competencies be self taught? Are there successful self taught doctors, engineers, accountants, et al that you know of out there? I think the biggest problem is the myth that if you treat trading as a business and you have some acquired trading knowledge you will be successful. It is the logic that all dogs are mammals but not all mammals are dogs.

Nov 04, 2017

Member (320 posts)

Re: What It Takes To Become An Elite Trader

Can't argue with that.
Only it took me more like 7 years rather than three.
The part about teachers , I would say only study from historical teachers, which history provides evidence of long term profitability . It does not matter how long ago because market patterns have always been the same and always will be.

Nov 03, 2017

Member (1314 posts)

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