The Anatomy Of A Successful Trader: 12 Key Traits

For those serious about trading for a living, the following is a list of characteristics found in every highly successful trader.

Realize that 1% of the people who play this game take 99% of the profits. That means 99% of people who call themselves “traders” are forking over all their money to the 1% of serious and consistently profitable traders.

The list of typical success traits such as discipline, focus, passion, commitment, determination, and confidence can be found in almost every trading book and, if applied, right can act as a framework for achieving success in all aspects of life.

These 12 traits of highly successful traders are a result of in depth comparison of hundreds of the world’s top traders, many of which are talked about in the books Market Wizards and New Market Wizards by Jack D. Schwager.

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If you want to make it in this game then strive to acquire these traits of highly successful traders…

Discipline: It’s all or nothing

So you think you’re disciplined? If you’re not disciplined 100% of the time, you cannot call yourself disciplined. This is something you must exercise each and every time you place a trade. If you break your rules just once, you cannot call yourself disciplined.

As an active participant in the markets there WILL be times when you feel that it’d be okay to act on your intuition, not following your plan that you so diligently laid out, because “this time is different” and “I will only do it once” well, unfortunately it doesn’t work that way. The notion of “Cut me a break and I’ll never do it again” causes traders to blow up their accounts. You MUST live to trade another day.

The market pays you to be disciplined.

Losing the right way

Trading is a game of statistics, and as such nothing is 100%, you will have losses, every trader does, what separates the highly successful traders from the perennial losing trader is how they lose. The following 3 rules are indisputable to the success as a trader.

  1. Always use stops

A trader who doesn’t use stops is at the same risk as one attempting to cross the Atlantic Ocean…by row boat. You may have a target in mind, but once the storm comes, you’re almost sure to drown.

  1. Never turn a winner into a loser

Once your trade is going in your favor and crosses a pre-determined target you must get your stop to break even. This allows you to limit the number of full stop outs, putting you in control of your risk.

  1. Never take a big loss

If you’ve followed rules one and two then rule #3 will result by default. The only type of loss that can hurt you is a big loss and can wipe out days, weeks, or even months of profits. As a starting point, never risk more than 1.5% of trading capital per trade.

Follow these three rules to manage your losses and the profits will come. Don’t follow them and it will be like swimming with an open wound in shark infested waters; you will be torn to pieces.

Commit to learning

The markets are constantly changing and adapting, you must do the same. Before you begin trading a new market you must fully understand how it works. Some of the world’s greatest traders can be found trading the futures markets. These traders have tens of years or experience and have traded through the various cycles of the market, what makes you think you can beat them?

Make the promise to yourself to never stop learning and you find yourself constantly exposed to new opportunities as the market evolves. However, it all begins with the fundamentals, so know your market.

Discover your inner personality

No better place will you uncover your true self than in trading. The markets have a way of exposing your flaws and dragging you out of your comfort zone. It is imperative that you match your trading approach to your personality or else you will be stuck in a battle which you cannot win.

Highly successful traders know themselves better than any other industry professionals. In trading, your emotions are tested to their breaking point, your reactions to winning and losing are exposed, and your will power to persevere is challenged. Just like in golf, there is no hiding behind anyone else, you are held accountable for your actions as a trader.

Be honest with yourself; build your trading plan to fit your personality.

Think for yourself

This is one of the hardest traits to acquire, but all highly successful traders think for themselves. Don’t let others influence you or change your mind about a position. Turn off the talking heads on CNBC, and come up with your own ideas.

The fruits of your success will be in direct ratio to the honesty and sincerity of your effort in keeping your own records, doing your own thinking, and reaching your own conclusions. The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.”

– Jesse Livermore

No one can predict for certainty where the market is headed, do your own thinking.

Clarity in your plan

It is true that most plans fail, but you will be far more likely to succeed if you have a trading plan, than if you don’t. Ask yourself the following questions and refine them until you have a crystal clear framework for moving forward as a trader…

  • What is my motivation to become a trader?
  • How will my life suffer if I don’t give 110% in becoming a trader starting right now?
  • What is my current net worth?
  • How much money do I need to support myself, my family, and current lifestyle?
  • Do I have a habit of making impulse purchases?

A self analysis of yourself should be answered honestly and clearly to act as a framework for building a career as a trader or any other endeavor. The book, Think and Grow Rich by Napoleon Hill is one to be read over and over again, as the principles directly apply to trading and to leading a successful and fulfilling life.


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