Long Posts

14 Qualities Good Traders Have That Most People Don’t Get

How you trade reveals what you think of yourself and how you live your life.

Being a good trader is about developing certain mental qualities. It is the process of constantly pushing yourself to grow stronger and better.

A profitable trader is not necessarily a good trader. Likewise, a good trader is also not necessarily a profitable one, yet a good trader ultimately finds himself with a much higher probability of being profitable/ of finding success in the long run.

This means that success, with these qualities, become predictable and repeatable.

So what are those qualities then?

In short, detachment, acceptance, wisdom, patience, persistence, discipline…

Here are 14 unmistakable signs that show you possess these qualities

1. You balance discursive thoughts and emotions with mindfulness.

Good traders understand how the content of their thoughts and their relationship with their emotions can influence their trading performance. In an effort to make the best decisions possible and to be constantly on top of their game, they balance and temper thoughts and emotions with moments of genuine mindfulness.

 

2. You feel confident in your ability to adapt to change.

Change is all around us, not just in the markets; it’s always happening and there’s no controlling it. Good traders know that and they focus on getting better at adapting to change, rather than resisting it.

 

3. Mistakes, although uncomfortable, make you deeply inquisitive.

You don’t punish yourself and others for them, you understand (deeply) that humans are designed to learn, and we learn by making mistakes. We learn to walk by falling down. If we never fell down, we would never walk. So, good traders take responsibility for their every action in the markets and their focus on growth.

 

4. You genuinely celebrate other people’s success.

Trading is a tough profession. Losses and drawdowns are challenging periods that cause many to break. Good traders never compare their own results with others. They never try to belittle other follow traders, wishing them to fail. They only display compassion, support, and understanding. They don’t feel as though other people’s success somehow diminishes their own achievements. Losers think like that, and in return, losses and disappointments is what they keep reaping in their lives.

 

5. You are comfortable trading according to your rules.

Good traders make decisions with relative ease because they understand their rules and what they are trading and looking for in the markets. They do not let other people’s opinions affect their judgment. They’ve learned to trust their own — essentially catching their own fish.

 

6. You have a thorough understanding of your strategy, its probabilities, and your inherent tolerance to risk.

At this point, trading is not an intellectual game for you anymore. It’s not about learning theories, it’s about experience and practice – which you’ve done enough of. You understand risk, and you know that managing it will not only preserve your capital; it will also protect your emotional well-being.

 

7. You focus on sharpening your skills, rather than showing them off.

While some people seek validation or recognition from other traders on Social Medias (especially twitter) for the trades they take, good traders are less concerned about gaining recognition. Instead, they’re intrinsically motivated to become better.

 

8. You view trading losses as opportunities for growth.

Good traders don’t waste time feeling sorry for themselves while giving away their power to the markets. While losses cause some people to grow bitter, they make good traders grow better.

 

9. Good traders feel good about themselves, whether they win or lose.

Your self-worth depends on who you are, your character and the constant states of mind you inhabit. It is not what you have or haven’t achieved or what people think of you.

 

10. You practice delayed gratification.

Good traders view their trading goals as a marathon, not a sprint. They’re willing to tolerate short-term pain when it can provide long-term gain.

 

11. You bounce back from failure.

Good traders don’t view failure as the end of the road. Instead, they use potential failures as opportunities to refocus and gain new knowledge and adopt new behaviors that will increase their chances of success in the future.

 

12. You express gratitude.

Rather than exclaim they need more, good traders take whatever the markets are offering them in the moment however small the gains are. If they followed their plan to the letter, then what should or could have been doesn’t matter!

 

13. You focus on what you can control.

Good traders are effective in the markets for the mere reason that they devote their resources to that which they can control – and this does not include controlling the markets but their own behavior.

 

14. You’re open to learning.

Learning is always an ongoing quest for good traders.

 

If you didn’t recognize yourself in any of those 14 statements, rest assured, you can develop these qualities in a record period of time. For starters, I suggest reading the following posts:

You Are Not Your Mind

Breaking Free From The Mind Movie

Quick Guide: How To Get Over Trader’s Regret

Extremely Short Guide – How To Become An Emotionally Stable Trader (really)

Back To Basics. How To Go through Losses Without Losing Your Mind

The Truth About WillPower Revealed (Hint: It Won’t Make You A Better Trader)

The Best Skill Traders Need To Cultivate Right Now

 

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Yvan
I've been trading for a living since 2006. By merging mindfulness (an in-depth study of the mind and its tendencies in the present moment), a good trading process, and an efficient business practice, I went from being a losing trader to a consistently profitable one. Through my work here at Trading Composure, I aim at helping you do the same.
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  • tjtrader76

    Hi Yvan, I appreciate this piece. It comes at a right moment for me. I really like your simple and straight to the point approach to trading psychology. I’ve been a long time subscriber to Dr Brett Steenbarger’s traderfeed but quite frankly it’s not an easy read. Most of the time I get more confused than anything! Even his books are definitely not for everyone. I don’t know why people have to make trading psychology appear so confusing and difficult.

  • Alex

    TJTrader

    You make a very good point re DR Steenbarger. I’ve read his stuff as well as most of the others and all this complicated info (and so much of it) can put us in a bind because there’s too much for us to think about so our brains can get scrambled.

    This is why Yvan’s book is very good. It’s far simpler than many of the others but I think it can get even simpler which is why I’ve asked Yvan (on his latest post http://www.tradingcomposure.com/traders-let-go-of-control/) to try and come up with some simple daily routine we can all follow (and modify to suit us individually if need be). So pre market, during the market and even after the market.

    As I said in another post, trading if done correctly should be simple and ‘easy’ (not easy to make money, but easy to operate our strategies). In my mind the whole psychological industry has forgotten about this and has often taken us down very long tunnels which are both hard to understand and perhaps even harder to implement. Hell, the nutter from N. Carolina suggest people write a book (50-100+ pages) regarding their trading plans/ideas/feelings. Too much info baby.

    So again, good trading should be simple so good psychology must also be simple as well in my opinion. Yvan promotes this throughout his book, although I think his work can become even simpler (not in the ideas, but in the application).

    And for the above reasons, Yvan I believe will start overtime to get a far bigger following. Helps a lot that he’s an actual trader.

    • tradingcomposure

      Alex, as always thanks for the kind words. Thanks also for the precious feedback, I will work on this. That is why feedbacks on amazon (for the books) are also important. Good or bad, if they’re written with honesty, they allow me to grow and to keep writing what people are wanting.

    • tjtrader76

      Yeah for sure… Steenbarger’s stuff is not for everyone…. you have to be a doctor or something. Who’s the nutter from N. Carolina?

  • Alex

    TJ

    Dr Van Tharp.

    Not saying some of his stuff isn’t good, I particularly like his teachings on minimising mistakes and understanding mistakes as a huge problem. But still, I find his stuff to go on and on and on. Writing a trading plan that’s the size of a book is too much IMO.

    That’s why I like Yvan’s stuff, nice and simple and to the point.

    • tradingcomposure

      As always Alex, I very much appreciate your kind words… I agree with you some people (and I’m not pointing fingers) make things too complicated when it needs not to be the case.