In the summer of 2010, I traveled to Manhattan from my home in Philadelphia to meet with Roy Davis of SMB Capital for the purpose of checking out SMB’s intraday equities training program. While I am an income options spread trader myself, my premise was that intraday equities trading and options income trading were not at all mutually exclusive and that I could enhance my overall trading skills by becoming proficient at day trading.
In addition to meeting extensively with Roy that day, I also had the opportunity to chat with Mike Bellafiore and Gman. While I had alot of questions about the nature of the day trading program, I found myself very curious to see how each of them would answer the following question: What do you think are the top three characteristics of a successful day trader? I was really interested to see if those same traits translated easily over to options trading (which they did by the way). I thought their respective answers were very helpful.
Roy felt that successful traders: 1) are very solid with what he called the “basics” (tape reading, execution, preparation for the trading day), 2) have discovered the trades that fit their personality and became excellent at those and 3) realize that successful trading is about pulling a small bucket of profit water out of the market well multiple times (in other words they are not greedy).
Mike’s top 3 were: 1) a passion for trading, 2) the willingness to admit you are wrong in your bias and to change your bias or terminate a losing trade and 3) to work really hard to become better each day.
Gman (who had actually had a list of 7 characteristics which were really interesting, but I’ll share his top 3): 1) hard work and preparation, 2) an ability to recognize what trades truly work for you and to STICK with them and 3) calmness in the midst of market volatility.
Unglamorous as it may sound, it looks like the clear winner is hard work and learning the basics. Should this be that big of a surprise? Wasn’t it Thomas Edison who said ” genius is 1% inspiration and 99% perspiration”? But it is interesting to note that two of the three put a very high premium on recognizing your trading strengths and focusing on those types of trades primarily.
I’d love to know what the rest of you think. Think of the best trader that you know–what do you think makes him or her successful?