If you are a Succesfull Trader you have one of These Features

Trading is an activity that sees a heavy dose of discretion and a huge degree of customization. So is there a perfect trader? There is no perfect trader but there are characteristics that profitable traders have and which are common to each other. In this article we are going to see these characteristics and we are going to analyze them so that we can actually understand how a trader, or aspiring trader, should act in the future to improve his operations and become autonomous in the long run.

We have already talked about some characteristics that help the trader to become profitable but we have never talked about the identikit of the profitable trader, a set of characteristics that will surely be fundamental to change and improve one’s skills and above all to have a reference, a model to to follow.

Quality Training

The profitable trader certainly has a quality educational background. As a high quality training background, we mean all that set of skills acquired and which in most cases are certified. Among them, as we can see in the various curricula of the largest hedge fund managers, essentially traders who have opened their investment funds, academic qualifications concerning economics, mathematics and sometimes high-level computer skills. In essence, they usually have a background that includes a scientific study that basically forms an analytical mindset, beyond mathematics, economics or information technology.

As we can see, the academic background is certainly a plus, but it is obviously not indispensable for carrying out the profession. In a certain sense, the academic path certifies not only the skills, but the fact that the graduate in question has faced a path where the objective of the degree passed through the formation of an analytical mentality aimed at the synthesis of information. It is not difficult to find, among the many professional traders, engineers, mathematicians, physicists and other profiles not related to economy or finance. Obviously we are not talking about a fundamental requirement but certainly an academically prepared profile is more advantageous than a non-titled profile, all with the same talent and IQ.

The working approach

For these profitable traders, the approach that we have repeatedly defined as "professional" is the winner. The academic advantage we were talking about before gets the aspiring trader used to having a methodological approach to the type of work he is going to face, an approach that involves an analysis process that leads to a series of results that will then be evaluated in risk management. This approach is successful, in the sense that the trader already knows what he will encounter when a certain scenario occurs and in a certain sense we can define that risk management begins with this process.

Obviously this approach must be combined with an ability to read the market that comes from experience to have a winning combination in the long run. The approach is therefore fundamental and the academic advantage mentioned above is precisely the greater ease in having this mindset. Here too, there are people who certainly have this approach despite not having studied at an academic level, so the requirement mentioned above, we repeat, is not essential but certainly helpful.

Mental resilience and flexibility

In trading you need to have a strong dose of adaptability. This characteristic derives from having a certain mental elasticity and flexibility in evaluating market variables. Resuming the characteristics of before, if you have an excellent curriculum and an excellent operational approach without however having a strong dose of adaptability, there is the risk of going totally broke as the market is constantly changing and the trader will have to change along with it in the shortest time possible.

If you get stuck in your own certainties, as happens to many academics, there is the risk of getting bogged down and becoming systematically a losing trader. Market adaptation is everything and the profitable trader is absolutely aware of this, so he always question his assessments so that he can better adapt to what the market is doing at any given moment in history.

Tracks its path

A profitable trader constantly monitors his trade as he will need to see how he manages risk in order to improve his risk parameters. The monitoring of your activity is essential in the long run in order to obtain results. The profitable trader knows very well that if he keeps track of his "Track Record" and treats it as his most valuable tool to improve his trading, he will surely get results in the long run.

Not taking care of one’s path can only lead to the continuous change of one’s operations in an absolutely random way and consequently the results can only be "random", sometimes you gain and sometimes you lose, a sort of operational anarchy. Monitoring one’s track record leads the trader to be disciplined and looking for constant improvement that can only do good for his operating balance sheet in the long run.

Work systematically

A profitable trader, whether discretionary or aided by automated systems, seeks systematicity. This systematic approach inevitably leads to the achievement of results in a systematic way and is a consequent approach to monitoring one’s track record. In this way the trader is led to be disciplined and methodical without too much effort of a psychological type as he will see his discipline directly on a work tool, precisely the track record.

Track record monitoring serves precisely to develop the methodical approach in the long term and to achieve measured and predicted results already from its operational risk management. A profile attentive to systematicity will certainly not have the same results in the short term as a trader guided by instinct, but will certainly have more consistent and more solid results in terms of risk management in the long term.

Original article published on Money.it Italy 2022-12-08 08:57:00. Original title: Caratteristiche del trader profittevole