I am a final year student at the University of Gloucestershire, investigating for my dissertation why it is that some individuals are more successful traders than others.
I would really appreciate if you could take a few minutes to answer these questions; the more in depth the better as this helps my analysis. All answers will be treated in confidence.
1) What does it take, fundamentally, to be a successful trader?
2) If it is the case that some people are simply unable to be successful traders, why is this?
(Please note that one is not necessarily the opposite of the other).
I'll take a serious stab at this actually. Overall I'm not profitable, so bear that in mind when you read my reply.
I believe the ability to become a succesful trader rests on a triumvate of 3 things. All of equal importance.
1) personal responsibility.
2) self-awareness.
3) self-discipline.
As it relates to trading here is my theory.
If a "system" or method has a positive expectancy over time and someone looses money at it, it is the fault of the trader not the system. People in general can commit heinous crimes and blame everyone around them. There was even a famous experiment where people were told to push buttons and someone in an adjacent room screamed for mercy. the test subjects believed they were electrocuting the people in the adjacent room. A very high majority of the people tested continued pushing buttons. Even after the adjacent room fell silent. Simply because a person with a white lab coat and clipboard told them to continue.
In short most people choose to believe they dont have responsibility in actions they participate in.
Number 2 of the 3. Self-Awareness. Most people simply react to situations around them. They get angry in traffic jams, they yell at the dog when the dog poops in the house. They see a price bar move against them and make a rash descision. A succesfull trader needs to be aware of WHY they are taking the actions they take.
And 3, discipline. To reach any goal above the median line of the society you live in you need discipline. Im an American and Im overweight. Thats typical, it's average. In order to loose weight I should eat healthy and excersize. But I wax and wane. Because I lack discipline.That's also the "average".As it relates to trading, I recognize a setup that's almost always profitable. Its a retracement in a trend. Its one of the oldest setups known.
I stayed home from work to daytrade a few days ago, and I took 10 trades. 2 were profitable and 8 were not. Only 2 fit my criteria for a trade. the 2 winners. But I only recognized that in hindsight.
So to wrap things up, you need the ability to recognize profitable opportunities, the ability to act on them, the ability to self-correct any mistakes you make, the ability to accurately judge yourself, the ability to follow self-imposed rule and the ability to acknowledge what the self imposed rules need to be.
Look at it this way, have you ever had a night were you had homework and/or studying planned and something came up and you deviated from your original plans?
If you were a trader you would have lost money, plain and simple.
Having said all that, I am not yet able to follow my own rules, and im not sure why yet. So I will continue to learn and try.
Maybe stubborness should be added to my list
🙂
