7 Qualities That Make Big-Game Traders
06/18/2012 2:15 pm EST
Traders who want to reach the top in their profession may aim to cultivate these seven traits commonly possessed by those who reach the pinnacle in sports, writes Frank Ochoa of PivotBoss.com.
It’s no secret that trading is extremely difficult. In fact, trading can be frustratingly difficult for 90% of traders who strive to reach the seemingly untouchable goal of consistent profitability. However, in order to achieve the success of professional traders, you must study the habits and traits of professional traders. In essence, you must emulate the pros in order to one day become one.
As it turns out, professional traders share certain traits with elite athletes—traits that happen to form the foundation for what it takes to be a successful trader.
Did you know that Pete Najarian (@petenajarian), Eric Bolling (@ericbolling), and Jeff Kilburg (@TheKillir) were once elite athletes? They may even tell you that they still are. But these guys are just a few of the recent examples of highly successful traders who were first trained as elite athletes. Here are the traits that they possess, and the ones you should, too.
Athletes Devote Countless Hours to Practice
What separates Peyton Manning from the average guy throwing a football? Well, aside from sheer size and a rocket arm, it’s practice. Countless hours of practice.
Peyton Manning, like other elite athletes, spends countless hours in the film room, on the practice field, and in the weight room perfecting his craft. Even after winning the Super Bowl and numerous MVP awards, Manning continues to strive to improve his game each and every day.
By the same token, the most successful traders devote countless hours to study and practice, as well. Successful traders routinely wake up earlier than most to study overnight market activity, read the day’s headlines, and review their trading approach for the upcoming session. They also review and study the day’s activity after the closing bell and develop their initial trading plan for the upcoming session.
While Peyton Manning reviews each of his throws from his previous game, successful traders review each and every trade, as well. While Manning practices the game plan for his upcoming opponent, successful traders develop a trading plan for the upcoming session. While perfection can never be achieved through practice, striving for such a goal can yield excellence.
Athletes Thrive in Structured Environments
Elite athletes, even at the high school and college levels, are forced into a structured environment by their coaches in order to improve their games. They wake up at the crack of dawn and are in the gym by 6:00 am. By 8:00 am, they’re on the practice field. By 10:00 am, they’re in the film room, with another practice and film session looming in the afternoon.
It’s the structured environment that forces otherwise undisciplined personalities to conform in order get the most out of their gifts and talents.
Likewise, successful traders are taught early on that structure is the quickest path to consistent profitability. In order to achieve trading success, professional traders are taught to be highly structured in their trading approach, which usually means managing risk, setting loss limits, and sticking to a trading business plan.
Athletes Are Extraordinarily Disciplined
While we normally associate athletes with discipline, I don’t think we really understand how disciplined they truly are. Michael Jordan started the "Breakfast Club" when he was with the 1990’s Chicago Bulls in order to practice with his teammates before the team practiced with coaches. Not coincidentally, Jordan began this club the year before the first of his six NBA championships.
Similarly, in order to become a successful trader, you must possess (or develop) the inner fortitude to do the things that lead to profitable trading. You cannot rely on anyone to push you. You must have the discipline to push yourself and stick to your rules.
Athletes Persevere at All Costs
Athletes are trained to win. To persevere at all costs. They develop a winning attitude early on: a competitive personality trait that usually lasts the rest of their lives. If the shot isn’t falling and the game is slipping away, athletes are trained to adjust and overcome.
Trading is no different. You will lose money trading. You might even blow out your account a time or two. But you must continue to pick yourself off the floor, adjust, and seek victory. All successful traders have overcome and persevered, and they have the stories (and battle scars) to prove it.
Athletes Are Even-Keeled During Adversity
Athletes are trained to keep their cool during adversity. Being level-headed when things aren’t going your way is the only reliable path to giving yourself a chance to prevail. This is why it is not uncommon to see teams rally from seemingly insurmountable deficits to win a game. These teams were coached to be strong-willed in the face of adversity.
Professional traders must maintain their cool while trading, especially when the house is stacked against them. When they don’t, they lose big. It pays to stay level-headed in the market.
Athletes Excel in Pressure Situations
Athletes are trained to perform in situations with utmost pressure. Practice and repetition helps athletes handle even the most intense, pressure-cooker situations. Why do you think football coaches devote so much time to the two-minute drill with their offense (and defense) in practice? Through practice and repetition, athletes are trained to become numb to the intense pressure typically felt during live action, thereby allowing them to think and perform at the highest of levels.
Imagine the pressure of playing in a World Cup final, a Super Bowl, a World Series game, or an NBA Finals game, with millions of people watching your every move. Some players choke, but champions prevail.
Trading can be one of the most pressure-packed professions in the world. Floor traders win and lose sums of money that are the size of mortgages daily. Your ability to not only handle the pressure, but excel when the heat is on will help you become a successful trader.
Athletes are Coached and Coachable
Elite athletes don’t become elite without great coaching. Even after winning three Super Bowls, Tom Brady continues to work with the same quarterback coach he’s had since his days as a youth. In addition, Brady takes direction from his head coach, his position coach, his offensive coordinator, and even his strength coach. Probably most important, however, is Brady’s willingness to continue to be coached, even after achieving so much in his sport.
Professional traders learn from the coaching of other successful professional traders. The best traders on the planet learned through the guidance of other seasoned professionals.
Like any worthwhile endeavor, education is everything. Education, whether through books, seminars, or one-on-one coaching, is simply a cost of doing business. Not only must you be willing to seek coaching, but you must be willing to accept direction, as well.
These seven traits keep athletes at the top of their games, but they’re not the only ones who benefit from these traits. Virtually anyone who has reached the top of their profession possesses these traits. Rock stars, performers, celebrities, CEOs, figure skaters, military personnel, you name it, must posses these qualities in order to be the best at what they do.
And let’s face it, professional traders are the best of the best when it comes to trading. That’s why they’re among the 10% who succeed.
See related: Sports-Inspired Tips Any Trader Can Use
By Frank Ochoa of PivotBoss.com