Typical Traits Of Top Traders

Temperament – In general, people with more analytical and even tempered personalities make better traders.

There is a counterbalancing trait which is the willingness to take risks. Some traders with volatile temperaments are successful because they can take risks easily and can keep trading after getting knocked down. They also tend to blow up more often.

Character – Humility is a very important ingredient in trading success. The truth does not care what you think of yourself. The markets don’t care what you want to believe reality is. Trader’s that are humble are better able to examine their methods and trading objectively and make changes where appropriate.

I’ve known a lot of successful traders that most people might consider arrogant but when it comes down to their own success and the reasons for that success they were able to see the faults in themselves and their trading. The trader’s that were out of touch with reality tended to blow up and have short-lived success.

Intelligence – General intelligence is correlated with success but not as highly as you might think. The ability to discern patterns and relationships with limited information is very useful.

I’d say that you need to be relatively smart to be successful but not extremely smart. Smart enough to understand the principles but beyond that it doesn’t necessarily help you. I’ve seen many very smart people tie themselves up in knots by second-guessing themselves.

Social Skills – Most of the really successful traders are not very socially skilled. Many tend to be reclusive and introverted. There are some exceptions.

Management skills of the tangibles & intangibles – Most of the successful traders I know are not good managers. Most of the people with really successful trading organizations are good managers, they tend to make a lot more money and have some of their money placed with the traders who are less skilled in this area.

Core Beliefs – Most of the successful traders saw trading as a game and a challenge rather than as a way to make a lot of money quickly. They may not have started out that way but eventually the game and challenge became more important than the money.

System Trader’s versus Discretionary – The difference I have seen is that successful discretionary traders tend to trader larger and more aggressively, they also tend to blow up much more often. Their personalities are less even tempered and more volatile in general.
First, let me say that I know of examples of successful trader’s that don’t have each of the characteristics that I would say the “typical” good trader shares. So there are exceptions to each of these.

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