The Mind & Habits of top traders

Discussions about personal psychology for the individual trader.
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Sir G
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The Mind & Habits of top traders

Post by Sir G » Sat Apr 26, 2003 1:33 pm

Could you share with us the insight you have gained by working and socializing with some of the best traders that our generation has seen?

What are the commonalties and differences concerning:
  • Temperament
  • Character
  • Intelligence
  • Social Skills
  • Management skills of the tangibles & intangibles
  • Core Beliefs
What in your mind has made them the best?

This should be an interesting read!

Kiwi
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Post by Kiwi » Sat Apr 26, 2003 6:56 pm

Forum Mgmnt, a belated thanks for starting this forum. The quality of the discussions has been excellent.

On this topic, if you decide to share your observations, I'd be interested in any differences between system traders and discretionary traders.

John

rayv696
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Re: The Mind & Habits of top traders

Post by rayv696 » Wed Jun 18, 2003 2:31 am

here some insight...making money in the markets should be effortless
Sir G wrote:Hi c.f.-

Could you share with us the insight you have gained by working and socializing with some of the best traders that our generation has seen?

What are the commonalties and differences concerning:
  • Temperament
  • Character
  • Intelligence
  • Social Skills
  • Management skills of the tangibles & intangibles
  • Core Beliefs
What in your mind has made them the best?

This should be an interesting read!

Forum Mgmnt
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Post by Forum Mgmnt » Wed Jun 18, 2003 5:39 pm

Hmmm, I realized that I had not replied to Sir G.'s original question. I'll take a stab at it.

First, let me say that I know of examples of successful trader's that don't have each of the characteristics that I would say the "typical" good trader shares. So there are exceptions to each of these.

Temperament - In general, people with more analytical and even tempered personalitites make better traders.

There is a counterbalancing trait which is the willingness to take risks. Some traders with volatile temperaments are successful because they can take risks easily and can keep trading after getting knocked down. They also tend to blow up more often.

Character - Humility is a very important ingredient in trading success. The truth does not care what you think of yourself. The markets don't care what you want to believe reality is. Trader's that are humble are better able to examine their methods and trading objectively and make changes where appropriate.

I've known a lot of successful traders that most people might consider arrogant but when it comes down to their own success and the reasons for that success they were able to see the faults in themselves and their trading. The trader's that were out of touch with reality tended to blow up and have short-lived success.

Intelligence - General intelligence is correlated with success but not as highly as you might think. The ability to discern patterns and relationships with limited information is very useful.

I'd say that you need to be relatively smart to be successful but not extremely smart. Smart enough to understand the principles but beyond that it doesn't necessarily help you. I've seen many very smart people tie themselves up in knots by second-guessing themselves.

Social Skills - Most of the really successful traders are not very socially skilled. Many tend to be reclusive and introverted. There are some exceptions.

Management skills of the tangibles & intangibles - Most of the successful traders I know are not good managers. Most of the people with really successful trading organizations are good managers, they tend to make a lot more money and have some of their money placed with the traders who are less skilled in this area.

Core Beliefs - Most of the successful traders saw trading as a game and a challenge rather than as a way to make a lot of money quickly. They may not have started out that way but eventually the game and challenge became more important than the money.

System Trader's versus Discretionary - The difference I have seen is that successful discretionary traders tend to trader larger and more agressively, they also tend to blow up much more often. Their personalities are less even tempered and more volatile in general.

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