12 Qualities of Good Traders

By Yvan


Here’s something most people don’t understand: a profitable trader is not necessarily a good trader. Survivorship bias is a big problem in trading. People with often little or no market experience will go through one bull market cycle, come out of it profitable, and think they’re geniuses.

The thing is, everyone’s a genius in a bull market. The market will tend to reward bad trading behaviors, and often for a long time.

But eventually, reality catches up, the music stops, and things get messy. That’s when, to paraphrase Warren Buffet, you discover who’s been swimming naked.

Let’s explore 12 qualities that good traders have, knowingly or unknowingly. These qualities are the reason they thrive in the market and are net-profitable in the long term, while others lose their shirt sooner or later.

#1- Good Traders Are Excellent Risk Managers

It is a fact that we don’t know when trading losses are going to hit us. If we knew, then risk wouldn’t be a thing. Good traders understand this, and they know that managing risk not only preserves their capital, it also protects their emotional well-being.

Longevity, process, and consistency. Good traders make this trio their entire world.

#2- Good Traders Know How To Manage Their Emotions

Good traders understand how their emotions can influence their trading performance.

Rather than doing the emotional roller-coaster ride, good traders keep their composure which helps them make wiser trading decisions.

In an effort to be on top of their game day-in and day-out, they have mindset management routines like mindfulness, physical exercise, or journaling. This helps them better process information and work through things that are difficult to accept or let go of.

#3- Good Traders Embrace Change

Change is all around us, not just in the market. Our life conditions, the world, the people in our lives, our physical bodies, our thoughts… everything is always changing. Good traders are confident in their ability to embrace change. And they focus on getting better at adapting to change, rather than resisting it.

Their focus is also on what they can control rather than what they can’t. And they know the difference.

#4- Good Traders Have An Empowering View of Failure

Failures, although sometimes uncomfortable, make good traders deeply inquisitive and hungry for improvement. They understand that in life we learn from every step we take. So they don’t punish themself (and others) for their mistakes. They own their failures and seek to improve.

At the end of the day, trading is simply a tale of struggle, reassessment, and adaptation. You fail, you learn, and eventually, you win. Most likely, that’s how the progression looks like for most people. And so, resilience, staying power and focus on growth are key elements on this journey.

#5- Good Traders Like To Help

Alright not always, but often. Because you see, trading is a tough profession to learn. Losses and drawdowns are challenging periods that cause many new traders to break. Good traders have been through tough times also, so when they see others struggle, they can relate and are often eager to show support.

Conversely, they don’t feel as though other people’s successes somehow diminish their own achievements. Losers think like that, and in return, losses and disappointments are what they keep reaping in their lives.

#6- Good traders Have a Long-Term Mindset

Many traders fail to make big money in trading because they focus only on day-to-day profits and losses. Good traders on the other hand understand that trading is a numbers game. So they don’t put too much weight into short-term outcomes. Instead, they have a long-term view—yes, even short-term trading requires a long-term mindset.

Good traders are comfortable sticking with their rules because they know what they’re trying to achieve in the market. They know that the only way to achieve long-term consistent profitability in the market is to stick with what works. So they keep that intention close to their mind and heart.

#7- Good Traders Are Independent Thinkers

As humans, we’re wired for survival. And from a behavioral standpoint, we’re like sheep. We follow, we try to fit in, we desperately seek leaders… because the crowd gives us comfort. But trading and investing require that you stand out and become your own person. This involves learning and unlearning new ways of thinking and behaving.

Good traders have done that work. Their commitment is to their trading plan and process. They do not let other people’s opinions affect their judgment and shake them out of their trades. They go Long and Short when their system suggests that they do, not when social media influencers tell them to.

#8- Good Traders Are Doers

Good traders talk less and do more. They have a thorough understanding of their trading strategy/system and what it’s trying to achieve. Trading is not an intellectual game for them. It’s not about grandiose theories and big talks, it’s about experience and practice which they have plenty of. Good traders have skin in the game.

#9- Good Traders Are Disciplined

Good traders are disciplined. They have a trading plan and follow their rules religiously. They know when to trade light and when to go in with size. They know what’s a good trade and what’s a bad trade. They are extra careful with their money, take their losses when they have to and are careful with the trades they decide to take.

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

#10- Good Traders Are Open To Learning

This builds on point #4. Learning is always an ongoing quest for good traders. So, they don’t see adverse market events as the end of the world, they see them as precious feedback on their path to trading mastery.

Good traders understand that one trades better when one lets go of the fear of failure and wholeheartedly embraces trading losses are part and parcel of the process of trading.

Only then can you fully prepare for them via proper risk management while staying open to the lessons and opportunities it also brings forth.

#11- Good Traders Don’t Obsess Over Money

Believe it or not, the very best traders don’t care that much about money. They care about playing the game well—of which money is simply a by-product.

In other words, trading for them is all about self-actualization and freedom. Money is just a way to gauge their progress on this path.

#12- Good Traders Cultivate A Positive Attitude

Traders with a good attitude are more likely to better weather the ups and downs of trading. When things get tough in the market, these traders don’t bring up everything that’s wrong with them; instead, they tell themselves that they’re paying the price for growth and that they will learn to do better next time.

Good traders know that their trades might fail. They’re able to accept a bad day as well as a good one because they trust their trading skills and the long-term expectancy of their system. They maintain a calm and composed state of mind and do not let their emotions get in the way of their trading process.

Conclusion

So, to recap, good traders are excellent risk managers, independent thinkers and focus on their own growth and development. They are not concerned with recognition and validation from other traders. They see their trading losses as opportunities to improve themselves. They also approach trading with openness and embrace risk.

If you have these traits, you’re probably a successful trader already, or you’re one in the making.

If you think you miss a few of these traits, don’t worry, they can be developed.

Check out the following posts:

How to View Trading Losses

This Zen Story Will Help You Appreciate The Process of Trading

4 Things You Can Do Today To Improve Your Trading Mindset

How To Develop Self-Assurance And Stay On The Path Of Profitability

6 Habits Of Calm, Profitable Traders

And if you’re ready, take it to the next level by enrolling in any of my courses.

 

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Memorable Lines From This Post

Everyone’s a genius in a bull market. The market will tend to reward bad trading behaviors, and often for a long time. But eventually, reality catches up [...] you discover who’s been swimming naked.

Click to Tweet

Longevity, process, and consistency. Good traders make this trio their entire world.

Click to Tweet

Many traders fail to make big money in trading because they focus only on day-to-day profits and losses. Good traders on the other hand understand that trading is a numbers game. 

Click to Tweet

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

Click to Tweet

Good traders know that their trades might fail. They’re able to accept a bad day as well as a good one because they trust their trading skills and the long-term expectancy of their system. 

Click to Tweet

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