People often ask me questions like, “What qualities do top traders have?” One person even hired me on a consulting basis for a half day to get my answers to this question. However, paying a sizable fee for that information is unnecessary. Here are the five most important characteristics that I have found researching top traders.
1. A belief that you create your results in life.
Most people don’t understand this concept. They repeat the same mistakes over and over again because they blame their mistakes on external factors. For example, I have a game I use for instruction in many of my workshops that we simply call the Marble Game. If you blame your bankruptcy in one of my marble games on the person who pulled the 5R marble against you, you are not taking responsibility for your position sizing error of risking 20% (or more!) of your equity on a single trade. Consequently, you’ll repeat this mistake over and over again and there will always be someone to blame for pulling the 5R marble against you.
Conversely, top traders are constantly determining how they produced their results and working to correct their mistakes. They create their reality.
2. The interest and desire to really understand yourself.
You cannot understand how you create your own results if you don’t know yourself intimately. I believe that most people live their lives like the automatons in the movie, The Matrix. They just do their thing, not realizing how much they have been programmed by their culture and their family and friends rather than understanding that they always have a choice in everything.
The great traders I know continually study and challenge themselves, their thinking, their actions, and their reactions. Most of my advanced peak performance workshops build on this premise.
3. Discipline to continually work to improve yourself.
Top traders often have a passion to work on themselves. A good trader will probably complete the Peak Performance Course once or twice and internalize many aspects of it. A top trader, or a potential top trader, will go through the course many times and develop a discipline that involves spending 1-4 hours each day working on improving himself or herself. Discipline creates excellence. Students in my Super Trader Program use the Peak Performance course throughout their training.
4. The ability to strategize well.
Good traders tend to excel at high skill games (e.g., poker, backgammon, chess, blackjack) because they can create good strategies and stick with them.
Top traders execute their strategies based on robust business plans that they have created to guide their trading. They have taken the time and effort to form meaningful objectives. They have also developed effective strategies to reach those objectives by understanding the multiple scenarios that are possible and how they will respond.
5. The ability to get in the zone.
Top traders can become one with the market and accurately sense what it is doing. They have the ability to live in the present moment without being influenced by the past or the future. It’s a very intuitive state and often gives them a total sense of how successful their moves will be in the market even before they make them. This is why I follow the big-picture of what the markets are doing (and I publish this market update monthly to keep you informed as well), and why I cultivate my internal guidance throughout my daily life.
Now, take a look at yourself and consider honestly if you have what it takes to be a top trader. I’d love your feedback. Email me at [email protected] and indicate if we can share your success story in upcoming newsletter issues. What we see here at the Van Tharp Institute that you can’t see is how many traders have common goals, fears, successes and insights. We’d like to connect each of you by sharing these insights!
Great article by Dr. Tharp!