If you’ve ever witnessed good traders in action before, then you probably noticed the confidence and certainty with which they planned and executed trades. It’s almost like they were born to trade the markets, which begs an important and popular question: Are some people more likely than others to become good traders?
Take those who dedicate their careers to certain fields like finance, education, or business, for example. Are those individuals better equipped to trade successfully than, say, creative types or those who work in the service industry?
To my knowledge, no definitive research findings exist on this particular subject, but my experience is that nobody is really “born to trade.” Instead, good traders continually develop their strategy and approach over time. Are there common traits among good traders? Sure, but for those among us who don’t come from financial backgrounds, don’t have an IQ on par with the world’s great thinkers, and can’t debate economic and monetary policy like an Oxford scholar, rest assured that your success in the markets is just as possible (and probable) as theirs.
Here’s why there’s no single, certain path to successful trading, as well as four habits that are rather common among good traders who come from all sorts of backgrounds, professions, and life circumstances.
Proof That Good Traders Come in All Shapes and Sizes
The infamous “Turtle Trader” Experiment of the 1980’s actually helped illustrate that “ordinary” people could learn to become good traders if only they followed closely and consistently a proven set of trading rules to guide their decisions.
Legend has it that the Turtle Traders, a group of little more than two dozen beginning traders, applied the Turtle Trading method they were taught by its legendary founder, Richard Dennis, and reportedly earned $175 million in profit in only five years! And while this particular method—due to its propensity for generating big losses—is not for the faint of heart, the experiment’s real lesson is the still true today: Anyone who can correctly apply a proven trading methodology can achieve success trading the markets.
Habits Good Traders Have Naturally…or Learn Along the Way
We’re all “born” with certain personality traits that help define who we are as people, and often, what sort of traders we are early on. Some, like patience, aversion to risk, and a short memory when it comes to processing negative outcomes, will help in the markets. While others, like a short temper, a penchant for breaking the rules, or having short focus, won’t.
Good traders, though, tend to possess the following skills and/or personality traits, whether they are inherent to them, or whether they’re learned, say, through their education or job experience, from a mentor, or even from taking their lumps in the markets early on:
- Decisiveness despite incomplete/imperfect information: Good traders act swiftly and confidently with regard to trade decisions, even when there’s imperfect or incomplete analysis to go on. Good traders assess the information that’s available at the time—factors like the market’s trend, the existence of support/resistance, and the technical pattern(s) in play—and make informed choices. It’s a lot like a doctor making a diagnosis, a similarity that has led many to wonder whether doctors have a natural edge if ever they decide to take up trading.
- Discipline and Precision: We’re writing constantly about the need to obey the rules and guidelines set forth by your trading strategy, and to repeat your methodology exactly over and over again. We’ve even discussed implementing a reward/punishment system to enforce desired trading behaviours. Extreme discipline and precision are skills that military personnel and athletes use to their benefit, and good traders will do the same.
- Penchant for Problem Solving and Detail: Much like engineers are ready, willing, and able to study processes and inner workings in order to diagnose and fix problems, there will be many instances when good traders will deconstruct, adjust, and re-assemble their strategy and its components. Perhaps it’s to help tighten risk, better scale in or out of trades, or find a hidden cause behind a series of negative outcomes.
- Accountability & Responsible Ownership: Good traders must act like the CEO and appointed leader of their organization. That means being proactive about continually monitoring and improving processes and end results, working to understand every facet of the how the “business” functions, and ultimately, being accountable for its success or failure. It’s a big job, but as a self-directed trader, you’re the one in charge of your business. Good traders will be quick to embrace that role.
One more thing that good traders have in common is a network of support working in their favour. That’s why, today, you can join the Lazy Trader community for timely analysis and trade ideas, continuing education, and even one-on-one mentoring as you strive to achieve success and reach your goals as a self-directed trader. Claim your no-risk trial right now by clicking the banner below!
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