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What are the common characteristics of top traders?
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What are the common characteristics of top traders?

  #1 (permalink)
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What are the common characteristics of top traders?

Hi everybody,

This is my 1st post at Big Mike's (awesome website btw!). I have been learning to day trade for over a year now, I'm paper trading mostly and occasionally jumping in with real trades. I have not as of yet achieved that holy grail of day trading... consistent profitability!

So my question is: what do you think are the common characteristics of the top day traders? This isn't limited to just psychology or personal characteristics; it could be a certain piece of knowledge they possess; a certain theory / system / approach to the markets; a certain financial instrument they play; a certain time of day they play (or don't play); anything and everything is up for grabs. If there are people who are able to pull money out of the markets every day, they must have some common characteristics. I am looking for those characteristics. Thanks in advance for your consideration!

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  #3 (permalink)
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Welcome!

I'll get the ball rolling...

first thought is if you are a daytrader and are breaking even or making a small profit, you are way better than most people that give trading a crack. The easiest way to do that is to trade less (you don't have to trade everyday), trade small, and only trade the best setups.

second thought groups only profitable day traders together...of those, it's my guess they were most likely tutored and groomed by another top trader. The majority are not 'private traders' per say and have access to large amounts of capital and information....

that being said for daytrading only, you must be disciplined and know your edge, know how markets work, know who's taking the other side of your trade, and have most likely been trading a handful of years.

I know ppl who daytrade 1 or 2 times a day and ppl who trade 50 times a day and they're both very good.

In some ways you could compare traders to neurosurgeons. what's the difference between a regular neurosurgeon and a top neurosurgeon? prob. not too much...just a few small things and perhaps a few more years of experience....but the difference between a top neurosurgeon and a freshman in college taking his 1st biology class.....a lot!

attempt trading with nothing less than if you were to decide to become a professional athlete. Work your butt off, learn all you can and study privately with great traders and then make it your own.....


fyi, those are my opinions, not facts....just my guesses....

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  #4 (permalink)
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w00dmann View Post
Hi everybody,

This is my 1st post at Big Mike's (awesome website btw!). I have been learning to day trade for over a year now, I'm paper trading mostly and occasionally jumping in with real trades. I have not as of yet achieved that holy grail of day trading... consistent profitability!

So my question is: what do you think are the common characteristics of the top day traders? This isn't limited to just psychology or personal characteristics; it could be a certain piece of knowledge they possess; a certain theory / system / approach to the markets; a certain financial instrument they play; a certain time of day they play (or don't play); anything and everything is up for grabs. If there are people who are able to pull money out of the markets every day, they must have some common characteristics. I am looking for those characteristics. Thanks in advance for your consideration!

I would venture these 3:
- hard work ethic,
- extreme self-discipline and,
- efficient stress management/relief

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  #5 (permalink)
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lsubeano View Post
Welcome!

I'll get the ball rolling...

first thought is if you are a daytrader and are breaking even or making a small profit, you are way better than most people that give trading a crack. The easiest way to do that is to trade less (you don't have to trade everyday), trade small, and only trade the best setups.

While I agree with not over-trading, especially when it's your own money involved, there is something to be said about forcing yourself to become comfortable with taking trades through repetition.

One of the first exercises I had at work (equities prop firm) was executing 100 transactions a day without being net negative by day's end. We had to do this before moving onto harder targets. At first it seemed insane, since I only liked taking a handful of trades a day at most, but fast forward 2 years and I realize how much that exercise helped me develop as a trader. Now days that I have 10 executions feel the same as the days I have 300+, and I don't even worry, stress or hesitate when it comes to getting into or out of positions.. I just execute.

Sometimes the new trainees ask me how I got so comfortable putting on and taking off risk... and I just respond "a few thousand trades with a positive expectancy helps a lot." (or some variation of this.)

Now, how a retail trader using their own funds can emulate the same kinda exercise (or at least accumulate thousands of trades under their belt as they learn) without blowing out their trading capital is a great question... entirely different environment and there's no risk manager standing over you if you step out of line.




lsubeano View Post
second thought groups only profitable day traders together...of those, it's my guess they were most likely tutored and groomed by another top trader. The majority are not 'private traders' per say and have access to large amounts of capital and information....

I spent years reading and learning on my own. I accumulated a lot of trading and market knowledge in that time.

But I agree, I learned more under an experienced mentor (my boss in this case) in just a few months than I did in years studying on my own. Sometimes he'd even say the same stuff I already had read or thought about, but the effect on my execution decisions was far more profound.

That being said, I can't exactly recommend finding a mentor online. There's so much bullshit out there, and so many false prophets/profits, that it's hard to know who's worth listening to. As well, you'd want one-on-one coaching, but the people in the business of doing that aren't often the best traders to follow (else they'd be trading, not coaching, since coaching--when done right--is a really intensive and time consuming process.)

I suppose I was lucky that my mentor had the right motivations to coach me, my P/L affected his floor's bottom line... but that isn't easy to replicate in the retail world (obvious reasons.)



lsubeano View Post
that being said for daytrading only, you must be disciplined and know your edge, know how markets work, know who's taking the other side of your trade, and have most likely been trading a handful of years.

I know ppl who daytrade 1 or 2 times a day and ppl who trade 50 times a day and they're both very good.

In some ways you could compare traders to neurosurgeons. what's the difference between a regular neurosurgeon and a top neurosurgeon? prob. not too much...just a few small things and perhaps a few more years of experience....but the difference between a top neurosurgeon and a freshman in college taking his 1st biology class.....a lot!

attempt trading with nothing less than if you were to decide to become a professional athlete. Work your butt off, learn all you can and study privately with great traders and then make it your own.....


fyi, those are my opinions, not facts....just my guesses....

I too know people who trade infrequently and ones who trade often. No right way of trading, only what works and what doesn't as proven over time.

Just my input.


Last edited by Jack Larkin; April 14th, 2013 at 12:08 AM.
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  #6 (permalink)
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marcopolo1 View Post
I would venture these 3:
- hard work ethic,
- extreme self-discipline and,
- efficient stress management/relief

Stress management is HUGE.

Exercise and diet, consistently following them, helps relieve stress and build discipline.

*sits up straight and puts on 'matter-of-fact' medical advice face* Also, sex. Seriously. Get laid. It helps with all sorts of stress relief. No joke.

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  #7 (permalink)
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Jack Larkin View Post
One of the first exercises I had at work (equities prop firm) was executing 100 transactions a day without being net negative by day's end. We had to do this before moving onto harder targets. At first it seemed insane, since I only liked taking a handful of trades a day at most, but fast forward 2 years and I realize how much that exercise helped me develop as a trader. Now days that I have 10 executions feel the same as the days I have 300+, and I don't even worry, stress or hesitate when it comes to getting into or out of positions.. I just execute.

Hi Jack, welcome to futures.io (formerly BMT). I find the exercise you guys had to go through very interesting.
However, it makes so much sense because most people who go from demo to real life stop after a few losses, go back to demo just to repeat the same cycle again. So one could have the perfect setups, and yet experience just a few stop outs to get discouraged. Thank you for sharing this real time experience and not just another paper trading diary.

Matt

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  #8 (permalink)
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mattz View Post
Hi Jack, welcome to futures.io (formerly BMT). I find the exercise you guys had to go through very interesting.
However, it makes so much sense because most people who go from demo to real life stop after a few losses, go back to demo just to repeat the same cycle again. So one could have the perfect setups, and yet experience just a few stop outs to get discouraged. Thank you for sharing this real time experience and not just another paper trading diary.

Matt

Thanks.

Sticking with a strategy is entirely a whole other problem traders face. Most of the trainees that fail at my work have the problem of jumping from one strat to another if they have a losing day. Its silly to expect any strategy to work 100% of the time, all that matters is how it plays out over time.

But I get your point. I've been trying to think of ways to adapt such an exercise to retail traders without the same structured environment and who pay a lot more per transaction. Still haven't found a good way of translating it over to retail yet.

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Jack Larkin View Post
Thanks.

But I get your point. I've been trying to think of ways to adapt such an exercise to retail traders without the same structured environment and who pay a lot more per transaction. Still haven't found a good way of translating it over to retail yet.

Today, if you read any trading thread, you would never know who is a real trader or not.
Most know everything in theory: how to be disciplined, how to trade, what indicators to use,
how to scale in and out, how to utilize risk management, order flow, etc BUT many are paper traders who just repeat what they think is right to say, or just repeating classical trading books/, etc webinars

Therefore, I REALLY like when someone fresh like yourself is here, sharing something that many would be considered counter intuitive, yet applied by real prop shops.

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Jack Larkin View Post
Thanks.

Sticking with a strategy is entirely a whole other problem traders face. Most of the trainees that fail at my work have the problem of jumping from one strat to another if they have a losing day. Its silly to expect any strategy to work 100% of the time, all that matters is how it plays out over time.

But I get your point. I've been trying to think of ways to adapt such an exercise to retail traders without the same structured environment and who pay a lot more per transaction. Still haven't found a good way of translating it over to retail yet.

Would you be kind enough to list some of the exercises?

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