The Ten Attributes of a Great Trader (Part 3)

01/28/2009 12:01 am EST

Focus: STRATEGIES

John Netto

Author, The Global Macro Edge

5. Decisiveness – This is a great leadership trait, as well as a great attribute for a trader. So many times our success comes down to how we responded during the moment of truth. Having the resolve and confidence to act on our analysis or system is imperative to achieving the most meaningful long-term results. In many cases, by the time we feel comfortable, the chance has materially altered from the initial entry and puts us at risk for greater volatility.

There are many things an individual can do to become a more decisive trader. One of the most luminous is to put oneself in an environment of traders who act in a decisive manner and regularly experience success. Our live hedge fund trading workshops in New York let attendees trade alongside and network with some prominent money managers and traders. This gives attendees a chance to alter their “trading disposition” and become more decisive, confident traders who understand this is a game of numbers, and if you’re not losing money at times, you are not taking on the kind of risk necessary to be successful. In many cases, this opens the proverbial floodgates for those looking to get to the next level of trading success.

6. Patience – The market, as much as anything in life, has a way of transforming us from cool, calm, collected individuals into irrational, impulsive, and disoriented speculators. Clearly it’s in our best interests to long-term profitability to spend the majority of our time in the former group rather than the latter. Acknowledging when things aren’t going our way is the first step to becoming a more patient trader, but it’s having the patience to wait things out until we find a more harmonic rhythm that contributes immeasurably to ones success.

As traders, it’s the losing positions that invariably do us in. A number of the bigger losers many traders experience came as a result of not being patient and waiting on the right opportunity. Many of us tend to press when things aren’t working out or we just had a losing trade. Traders can begin to play catch-up and go on emotional tilt. It’s the paradox of trading in many ways. The same competitive drive we use to drive our success has components that hasten our failure.

When going through my daily checklist that I put out to members of my mentorship program, I always emphasize that the markets provide a multitude of chances to trade. One need not force action when the setups aren’t right. Traders who get into positions with “the best of it,” or edge, significantly increase their chances for success in the long run.

By John Netto, founder and chief investment strategist, NetBlack Capital, LLC

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