Backgrounds of Successful Traders


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Making the assumption that traders and aspiring traders come from a different previous profession, is there any correlation between the past profession and current trading abiliity ?

For example, since many aspiring new traders come from a background of earning a regular salary, for doing 37.5 hours a week, does this actually hamper the transistion to successful trading ?

I suspect salespeople, who have already have got the mindset of having to accept that only a proportion of their leads result in closed deals, are better suited psychologically to trading.
They are already used to earning a living from their ability to close a deal, and accept that some leads will result in no-sale, and understand that income can fluctuate.
They have already honed the ability to judge which sales prospects are "hot" and worth pursuing, and which are "cold", long-shots that may not be worth chasing.
( pattern recognition )

I suspect doctors, who are used to fighting for patients lives, may hold onto losing trading positions, unable to accept that they should let go of a losing position.

I suspect that people who are salaried, irrespective of what happens, are most likely to fail or have difficulties, because you cant hide your trading failures through blaming others, or kow-towing to the boss, or being good at "delegating" your weaknesses to others.
( spending upto 2 hours surfing the net from work ( recent survey !!), knowing they get paid anyway )

I suspect people who are self-employed, also are better suited to trading, as the nature of self-employment means working 60hours a week mostly, and still having no certainty of income. These people work as hard and as long as is needed to succeed.
( they learn to do the job, whatever it takes )

EDIT: added next paragraph:

Would a transition to trading be better managed if all apsiring traders first got themselves a job in sales for 6-12 months.
In this time, the principles of accepting failure, of acknowledging that a small proportion of leads result in success, and these profitable successes outweigh the many smaller failures can be learned.
The principle of irregular income can be experienced.
If you can cope with sales, you have acquired the beginnings of the right mindset ??

comments ?
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In my view the key to all of this is being able to ruthlessly apply discipline and removing emotional involvement when trading. Any profession that does this may help but to be honest I have found that in every area of life you have a variety of characteristics in all professions. Also if you believe that only 5% of traders are successful then you would need to look for something that only 5% of people have regardless of occupation or prior circumstance.

Hey Trendie,

This is an interesting thread........

Facts about me:
1) Successful trader within three years (trade for a living and trade other peoples money for nice gains)
2) Learned the majority of my trading knowledge from an institution
3) Host a local investors club of around eight traders (over $2,000,000+ of total trading capital)
4) Have over 10 years of sales experience
5) Small business owner
6 ) Artist (I think may help)
7) Chess player

*hope this helps*
Interesting thought. I would say if you sat down and looked at the market form a totally objective point of view and then correlated your given profession to the market to see what it brought, many different professions would have positives that could be applied. An off the cuff consideration of sales people imho would be that they would be one group who could be uniquely disadvantaged since a lot of their business surrounds convincing people to buy stuff they don't want or don't need, a sales person is probably one of the least likely people to walk away from a trade that isn't going well. They imho would be in danger of having a mindset of imposing, or at least trying to impose their opinion on the market. Thereby entering the dangerous state of bringing a bias to the market.
As for doctors, I admire your view of them, but let's look at them from another angle, who is better positioned to realise that he deals in a profession that is often hopelessly beyond his control and daily experiences the greatest loss of all. Interestingly medical practitioners whilst possibly being one of the most caring of workers have to walk the other extreme. Given a multi-casualty situation with limited resources they have to decide who is worth devoting those resources to, it's called triage. So do I think sales people bring nothing to trading and doctors bring a lot? Not at all, just thought I throw in a different perspective of the two.
trendie said:
I suspect doctors, who are used to fighting for patients lives, may hold onto losing trading positions, unable to accept that they should let go of a losing position.
I might be able to agree with this if you removed the comma after the word "doctors", but doing so would dramatically change the meaning of the sentence. :)
Some of the best traders i've encounterd have come from sales background.....

To quote Mr Douglas...

Trading successfully feels the same way. On any given day, week, or month, the markets make
available vast amounts of money to anyone who has the capacity to put on a trade. Since the markets
are in constant motion, this money is also constantly flowing, which makes the possibilities for success
greatly magnified and seemingly within your grasp. I use the word "seemingly" to make an important
distinction between the two groups of traders. For those who have learned how to be consistent, or have
broken through what I call the "threshold of consistency,"the money is not only within their grasp; they
can virtually take it at will. I'm sure that some will find this statement shocking or difficult to believe,
but it is true. There are some limitations, but for the most part, money flows into the accounts of these
traders with such ease and effortlessness that it literally boggles most people's minds.
However, for the traders who have not evolved into this select group, the word "seemingly" means
exactly what it implies. It seems as if the consistency or ultimate success they desire is "at hand," or
"within their grasp," just before it slips away or evaporates before their eyes, time and time again. The
only thing about trading that is consistent with this group is emotional pain. Yes, they certainly have
moments of elation, but it is not an exaggeration to say that most of the time they are in a state of fear,
anger, frustration, anxiety, disappointment, betrayal, and regret. So what separates these two groups of
traders? Is it intelligence? Are the consistent winners just plain smarter than everyone else? Do they
work harder? Are they better analysts, or do they have access to better trading systems? Do they
possess inherent personality characteristics that make it easier for them to deal with the intense
pressures of trading?
All of these possibilities sound quite plausible, except when you consider that most of the trading
industry's failures are also some of society's brightest and most accomplished people. The largest group
of consistent losers is composed primarily of doctors, lawyers, engineers, scientists, CEOs, wealthy
retirees, and entrepreneurs.
Furthermore, most of the industry's best market analysts are the worst traders imaginable. Intelligence
and good market analysis can The Road to Success certainly contribute to success, but they are not the
defining factors that separate the consistent winners from everyone else. Well, if it isn't intelligence or
better analysis, then what could it be?
Having worked with some of the best and some of the worst traders in the business, and having helped
some of the worst become some of the best, I can state without a doubt that there are specific reasons
why the best traders consistently out-perform everyone else.
If I had to distill all of the reasons down to one, I would simply say that the best traders think
differently from the rest. I know that doesn't sound very profound, but it does have profound
implications if you consider what it means to think differently.
To one degree or another, all of us think differently from everyone else. We may not always be mindful
of this fact; it seems natural to assume that other people share our perceptions and interpretations of
events. In fact, this as sumption continues to seem valid until we find ourselves in a basic, fundamental disagreement with someone about something we both experienced. Other than our physical features,
the way we think is what makes us unique, probably even more unique than our physical features do.
Let's get back to traders. What is different about die way the best traders think as opposed to how those
who are still struggling think? While the markets can be described as an arena of endless opportunities,
they simultaneously confront the individual with some of the most sustained, adverse psychological
conditions you can expose yourself to. At some point, everyone who trades learns something about the
markets that will indicate when opportunities exist. But learning how to identify an opportunity to buy
or sell does not mean that you have learned to think like a trader.
Roberto said:
I might be able to agree with this if you removed the comma after the word "doctors", but doing so would dramatically change the meaning of the sentence. :)

ROFLMAO Roberto a sense of humour with the precision of a scalpel, (in the right hands of course)
I was in major account Sales for 15 years.
The way I trade has never been mentioned on this or any other list I have looked at.


Thus the reason I believed that being an artist (post #3 of these thread) has personally helped me. There's no doubt that psychological make up and thought patterns determine one's ultimate success.

Being in sales must be a real handicap.

Every sales person I have had the displeasure to meet has been so egotistical and treats others like sh1t.

Then again thats maybe the right attitude.

thanks for replies y'all.

with regards to salespeople, the responses have been leaning towards to their ( salespeoples )perceptions and attitudes, which I hadnt really originally considered !!

my perspective, was that salespeople would, by the nature of their jobs, be used to accepting failure as a part of their jobs, and thus be more predisposed to having the discipline of staying with a losing run, knowing that in the longer term, the odds still favour them being successful.

Very few salaried jobs, that I can think of, make people face upto failure in its raw form.
My understanding is that a short run of failure makes people question their strategy, when nothing maybe wrong with it.
Also that salaried people need to understand and accept the concept of irregular income that salespeople are already used to.

I hadnt really considered the personalities aspect, which is a bit stupid, since its 80% of trading!!
DOH !!

Or, what I wanted to say, was that certain jobs require a certain mindset, which makes the transition to trading easier, as these mindsets are already built-in.
Its Sunday, I am tired, I think I will go and lie down.
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previous occupations have nothing to do with successful trading , though I would say some sort of background within finance would help , not neccesarily in trading but something that gets you familiar with the markets.

it could even be just reading up as much as you can and going on free tours to the local exchanges/institutions to snoop around and see everything. And I mean SNOOP , don't fawn at them o/w they will jump at the chance to patronisepoo all over you .

this is the clever way , the strategist way , ambush them .use the establishement , not vice versa !

God , how I love snooping :)

control of emotions is step 1 , the advanced step is control of anti - emotion ! think about that kids.
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I think any occupation which goes through feast and famine cycles is likely be helpfull.

The vast majority of people who have salaried jobs on the whole wont even go near trading,
or if they do they might try it once in their lives for a short period and never do it again. These
people will call it Gambling and call those who make it Lucky.
Several of the above posts mention controlling emotions. I've seen a piece written somewhere about emotions in trading suggesting that ex-army people have made good traders as they are used to controlling their emotions under pressure.

Does anyone here have a military background and has it helped?
Tuffty said:
I've seen a piece written somewhere about emotions in trading suggesting that ex-army people have made good traders as they are used to controlling their emotions under pressure.
IMHO ex-army people (of a reasonably senior level, I mean) tend to be successful at _anything_ that rewards system, order and method.
but what about people who exploit the emotions of others? slimy second hand car dealers , ambulance chasers etc , surely these are the people we should look up to ( in terms of trading potential)!