What are the traits of the best traders?This article is hugely important, especially for traders outside the funds. The basis is to observe the best traders, specific behavior when they are successful. Interestingly, the same behavior is observed in the most outstanding athletes, businessmen, members of elite special units.
The best of the best, when they are successful - they want to be even better. That's why - they don't stop educating themselves. They continue to learn about their strengths and weaknesses and work on them. They continue to train, research, develop technical skills - in our case, knowledge of markets, new analytical methods, new sources of advantage, new strategies, indicators and tools to facilitate their work.
Professional development has become a lifestyle for them, something they do regardless of success or failure.
The success they enjoy is certainly rewarding, but it is also contextual, an (inevitable) by-product. Interestingly, they often derive more satisfaction from this effort than from the success itself: in the market, in business, or from completing a very difficult mission.
For them, learning, developing, overcoming themselves is a way of life, a passion that consumes them, a blessing that brings them success and a curse that consumes virtually all their time.
In short - their secret is passion
Passion enlightened, by that I mean that you know your strengths and weaknesses well and work with specifics. And if we're talking about specifics, we're also talking about measuring results, states, progress.
But that's a story for a completely different article, which I'm sure will be written at some point.
What are these qualities of the best traders?
The trump card of the best trader consists of 2 parts, and in order to systematically make money you should have both.
technical
psychological
Technical advantage - I understand it as all the skills and knowledge that make up your trading system.
Do you know what exactly your advantage is?
To show the extreme advantage I will use the example of the best traders. Everyone else has some kind of advantage "between" the best and the weakest (who do not have these qualities at all or at a very low level).
What creates the advantage of the best traders?
Access to unique knowledge, preferably before everyone else.
Knowledge of companies' plans, new products (which is unavailable to others), especially in the case of stocks.
The ability to reliably estimate the performance of companies before they are published
Knowledge of political changes and their impact on markets
Use of alternative data
Taking advantage of market formations that pay well and that others don't know about.
To this we can add:
knowledge and ability to use technical analysis
finding specific entry points and methods
using formations that others have overlooked or
using what is known, but in your own unique way
How to build an edge in trading?
The advantage of the best traders is usually built from several things at once. It can be a hybrid of several things, for example, they can use their knowledge of company movements, identify entry points through technical and volume analysis, and execute the entry itself through an automated system that makes great use of liquidity.
The advantage of the best traders can come from better tools, e.g. to build positions, to maximize positions (there are some in the largest funds) improve performance and simplify life.
You will find your advantage if you answer the question: on what basis do I make decisions about the choice of an instrument (company, commodity, currency...)?
Some systems are based on fundamental analysis, macro analysis, company analysis, supply and demand analysis (e.g. commodities), then we have technical analysis, price and candlestick formations and a host of indicators.
You will see your advantage (or lack thereof) when you ask yourself, what is unique about your system?
You may answer that you are using, for example, well-known price formations, triangles, flags or similar. However, this may mean that you are doing the same thing as everyone else. There is nothing wrong with that if you are trading on a small scale, privately or as a hobby.
However, if you are or want to be a professional trader this is not enough. Formations, elements of technical analysis sometimes work and sometimes not. If something is repeated over and over again, large traders will enter the market and use the accumulated orders for their own entries (stop hunting is an example) and your advantage will disappear sooner rather than later. A pattern that worked very well will suddenly cease to exist.
The best traders not only know exactly what their advantage is, but also go to great lengths to improve it.
This article is not intended to give you a ready answer of what to do and how to do it, but rather to point out a problem that could cost you a lot in the future. You should, like the best traders, know exactly what your trading advantage is and build on it.
If you don't know that, I hope I patted you on the shoulder and told you that you fell asleep at the wheel. Nothing bad has happened yet, but you've already fallen asleep.
So what is your advantage? Let us know in the comments!
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