Training technique is a wonderful thing to possess and knowing many of the high percentage setups is certainly an asset to any traders arsenal. But in recent years, there has been an increasing interest in non-tangible trader assets and how those assets, or traits, come to bear in the trading process. At first glance, you would think that technique would carry you a long way in the day trading process. But recent research has uncovered several other factors that affect a day traders performance.
There has been no small amount of literature published in recent years on this topic. Some authors have chosen as many as 10 characteristics of successful traders. But for me, it comes down to three basic traits that are essential for every day trader to prosper. Of course, it's difficult to quantify the emotional factors in any discipline, and trading is no different. But if you have the chance to trade with a truly talented trader you will sense these intangible factors.
1. Good traders love to trade. I have yet to meet a highly successful trader who was not passionate about his or her craft. These are the kind of people who know that the trading environment is exactly where they should be at the appointed time. Great traders exude this passion in their approach to trading. They may not feel it necessary to announce to the world, "I love trading." They don't have to; you can sense their passion and desire when they enter the trading room. They are often avid students of trading craft, and have an insatiable desire to continue to learn and master day trading. Trading is not a job for these individuals. Trading is who they are, and what they are. The very best traders are nearly oblivious to their surroundings as they trade, but instead are glued to their screens and indicators and are constantly applying the knowledge and skill they have honed. Oddly enough, I have observed that "making money" is not the driving force in these individuals lives. No, it's the sheer elegance of a trade well executed. Further, these traders pride themselves on a day's worth of mistake free trading.
2. Good traders never deviate from their plan. Successful traders have a well developed trading methodology they have learned and practiced. This methodology is the map by which they travel the markets. They don't take the side roads, they don't veer off the path, they have a well defined plan and execute that plan despite outside variables that may distract some traders and send some traders completely off their trading plan. Successful traders have phenomenal discipline in their approach and execution of their trading methodology. They have specific criterion for entering and exiting trades and no amount of distraction dissuades them from their trading plan. Even more remarkable, they are able to maintain this high level of discipline for entire trading sessions, for months, for their entire careers. Discipline is the stuff of greatness in a trader. There are no substitutes for discipline. While some undisciplined traders may put together streaks of profitability, they are unable to maintain this high level of profitability over sustained periods. They lack the discipline. I've heard talk in trading rooms about successful traders having a "sixth sense" when it comes to taking trades. That has not been my observation though; the ability to maintain consistency in trading is the product of personal discipline
3. Good traders are never rushed. I have been fortunate enough to trade with several very talented traders, and the mood in a trading room can, at times, reach a frenetic crescendo. But the good traders don't trade on rumor, or innuendo, they trade when the time is right. They won't be rushed into a trade hoping to catch the tail end of a breakout or breakdown. More likely, they entered the trade as the breakout or breakdown became evident. They do not trade in a euphoric state or rush into low percentage trade setups. They are a patient lot, these traders. They know that the opportunities to trade will arise throughout the course of the day and there is absolutely no reason to risk their capital on low percentage trading opportunities. They know that some days there may be a limited number of trading opportunities, and that is all right. A great trader learns to take what the market offers, but realizes the market punishes those who try to steal trades when high percentage setups are not prevalent. They understand that the market is essentially a complex percentage game and are ever aware of the proper percentages that are essential for a successful trade. They are patient and methodical in every aspect of their trading craft.
I realize that these three traits exist, in a greater or lesser degree, in all traders. Further, not all traders are going to be able to master these three traits. We all have our weaknesses, and learning to compensate for impatience, lack of self-discipline, and passion for trading are ongoing projects. It's progress we seek as traders, not perfection.
