Three Unique Traits of the Successful Trader

BellaMike Bellafiore's (Bella's) Blogs5 Comments

Seth Freudberg of the upcoming SMB Options Training wrote a recent blog on the unique traits of successful traders. stevenplace weighed in as well with his always brilliant thoughts. Seth paraphrased my answer to this question in his post and after reading my answer, I would like to offer a better answer, if that is acceptable.

1. Find the plays that make the most sense to you.

Build from your unique personality. Some traders will make a career of momentum trading, killing anything that is moving. They could care less about a balance sheet or even the actual full name of the symbols they trade. They just want to play and are damn good at it. Some will find this intellectually suffocating. They will want to trade all the markets, reading as much about as many longer term opportunities as possible. This fits their inner need to learn, think, and grow intellectually. Both are totally acceptable save if the momo trader is forced to trade macro plays.

2. Spend as much time trading, thinking about trading and talking about trading as you can possible stand.

The past years have gifted us a treasure of research on elite performance which provides a clear path for our success. Time at our craft, experience, practice, reps gained determining plays are the road to successful trading. Put down Boring New Book About Some New System You Do Not Understand and start reading The Talent Code, Bounce, Talent is Overrated, Mindset, Drive, Outliers, The Art of Learning.

3. Find a GREAT mentor.

And I do not mean necessarily at a trading firm. Before Dr. Steenbarger went off-line and joined one of the great hedge funds of our time, I peppered him with questions. Phil Mickelson, considered one of our greatest golfers ever, has three coaches watching his game. Peyton Manning has a head coach, offensive coordinator, quarterback coach, and father providing him feedback. There is little evidence of elite performers reaching their potential without high-level coaching.

So there is my new list. What’s your list?

Mike Bellafiore

Author, One Good Trade

5 Comments on “Three Unique Traits of the Successful Trader”

  1. Great post Mike, Steenbarger has some great content. As put by Ralph Waldo Emerson, “A man is what he thinks about all day long.”

  2. 1. He needs a logical theoretical framework that supports his successful vision of trading. This is critical and not trivial. If a trader truly believes in EMH then he will find it difficult, if impossible to trade. False and vague models like “technical analysis” will not satisfy those who take an honest look at the markets. The type of models that are required and their theory is a closely guarded secret.
    2. He needs a very tangible financial system for success, whether that is employment or savings. The type of elite performance I’ve developed can not be developed without a sound knowledge of eventual success.
    3. He needs to have won and know what winning is.
    4. He needs to have positive and supportive feedback loops.
    5. It is not enough to think about trading, trade, or even talk about it. One needs to know the factors that influence performance and how much they influence performance.One needs to arrive at meta-cognitive level, which is what Dr. Steenbarger was able to do which tends to be reserved for those in the very top echelon of intelligence. Their primary distinction is the ability to use their executive decision and metacognitive skills with long term planning.
    6. He needs toughness. This is in the top #3. This is partially as a result from other factors. The great trader will not give up when he is right but gives up easily when wrong. Easy to understand but impossible to learn.
    7. He needs to have creative vision.

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