The Ten Attributes of a Great Trader (Part 5)

01/30/2009 12:01 am EST

Focus: STRATEGIES

John Netto

Author, The Global Macro Edge

9. Being Dynamic/Fluid/Flexible – The markets are not a static entity, nor should the people who trade them be. While in no way does this attribute undermine one following a game plan in trading, being open minded to new ideas and innovations keeps you ahead of the curve. The markets today are seeing new technology, exchanges, overnight rules, and legislation that can impact price movement and your ability to conduct your business in a more structurally efficient manner. An example of this is Alchemy Ventures (www.alchemyventures.com), a structured finance firm out of New York and San Francisco. They have created an investment structure that significantly reduces the inefficiencies of the investment allocation, risk management, and the reporting process to the end investor. With this type of financial engineering available in the markets, staying attuned to innovative ways to generate returns are just a few of the ideas that will benefit us all considerably.

10. Willingness to Learn and Improve – This is a highly competitive game, and educating oneself is essential to understanding the evolving components discussed in attribute nine. With the extensive information availed to us, having colleagues or mentors to lean on is critical. I dedicate a certain amount of time each week to reading articles about things such as yield curve analysis, the money markets, structured finance, banking, legal issues, politics, and other relevant industry news. I also lean on certain market experts in aggregating my information for making my trading decisions.

This has taken years of experience, hard work, and networking, filled with many trials and errors, to put together a system for staying on top of the trading game. However, my investors and workshop attendees appreciate this, as our returns and student success ratio put us in strong company.

The aforementioned description of attributes is not meant to be all-inclusive, but does provide a framework for operation. Much like being a successful trader requires us to take part of an evolutionary process, this list carries with it that same dynamic.

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

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