What It Takes To Become An Elite Trader

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Alan Farley

03 Nov, 2017

in Day Trading & Scalping and 1 more

Your final task could be the hardest, depending on your current lifestyle. Once you’ve chosen to walk the elite path, you need to monitor personal habits and interpersonal relationships. Drug use, poor nutrition and insomnia undermine the mental faculties required to take money out of the market each day. Add in marital discord or fighting with parents and there will be even more chances for your money and your discipline to be lost through your positions.

Understand the deep connection between how you feel and your bottom line results. Financial markets are the worst place to deal with personal issues, so clean up your act and quit smoking, get to the gym and buy your spouse flowers. You’ve got important work to do and need to be at your best to trade at the top of your game.

In Summary
The elite trader develops a serious approach to the financial markets, weighing risk against potential reward at all times. They hone their craft through detailed recordkeeping, carefully chosen data sources, well-defined trading edges and lifelong connections with mentors who will guide them to the next level of achievement.

Alan Farley can be contacted on this link: Hard Right Edge

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Psychology of Trading

This is my thoughts on the psychology of trading, my own personal opinion, based on investing since the late 1970s and the many books I have read both in investing , the classes at UNL Grad School and SLU medical school.
1styou must find your style. Here the Zichy test can help you a lot. It’s found on page 27 (?) of Peter J Tanous’ book “The Wealth Equation”. I can send as an insert the test to you. Regina and I can score it for you. If you are honest with yourself, I am willing to copy the recommendations for your trading style. I will tell you right now I am a Blue Innovator. At Portland several people took the test and seemed to be grateful. Knowing your trading style is very important.
2nd In finance class at UNL I was told to paper trade at least a year. I suggest paper trade until you find your niche. Scalper apply at Kingstree Trading and let them train you. You will become a market maker like a friend of mine and gama scalp. Day learning everything you can and Day Trade until you losses are not greater than you gains over 9 months or more. Swing Trader? Practice by paper trading until you get it right. Long Term Trader like me (my time horizon is four months to several years) or Warren Buffett and Michael Burry MD If a scalping is your niche maybe you should apply at Kingstree Trading in Chicago, where they will train you and if you make the cut they will furnish you with the funds you need. You will need a coach for a while. Take classes from the trainer you like best. I like Long Term Trading. Years ago my “Yes” moment occurred. I had taken those classes to save the practice of medicine but investing was/is fun. Once it is fun the steps you have to take will no longer seem burdensome. Continue to paper trade a bit longer but every time a trade goes wrong give up something you really like (for me no ice cream for a couple of weeks). The trivial of your pursuit will no longer seem trivia but fun. Now is the time to commit real money to you trading. And time to find a coach/trainer. You should fast become a competent trader/investor. If long term investing is your style, stick with John K but tell John your style. (Aside: When I was a teenager a caddy for an unknown golfer in the US Open from South Africa, Gary Player ranked now as number 8 by Golf Digest, he came in 2nd. I noticed that Gary Player brought a coach with him. The three of us sat in the club house and the two us discussed with Gary his play for the day stroke by stroke. He was most interested when the shot was not perfect. I am sure that Gary was much better than his coach or I). You will slowly become a master trader/investor. I think off hand it takes ten years so be patient.
When you think you have read enough, you haven’t. The four legs to the table are psychology, chart –reading, fundamental analysis and technical analysis (add Greeks for option trading).

Nov 26, 2017

Member (3 posts)

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 (600 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 (1334 posts)

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