A Growth Mindset: The Most Important Aspect of Trading Success

02/22/2016 6:00 am EST

Focus: STRATEGIES

For the benefit of all traders striving to achieve more consistent results, Andrew Falde of SMB Training Blog stresses the importance of developing a growth mindset and remembering that the life-cycle of any trading edge—whether it be next month or in 20 years—will someday come to an end.

There are two truths that I’ve observed about trading over my trading career.

1. Trading edges come and go
2. Great traders last

For these two truths to exist simultaneously, it means that great traders cannot depend on a few edges that currently work.

Mike Bellafiore has said many times before that the most important aspect of success in trading is a growth mindset.

We see traders struggle to find consistent results because they are looking for just one or two strategies that they can implement to be successful.

The trouble with this is that one or two things may work in a certain market environment—then stop working for a period of time—or forever.

In the 1980s, making the spread was an edge that worked. That edge is largely gone.

In the late 1990s, buying everything that was closing near its high worked. That rarely works anymore.

In early 2015, premium decay showered market neutral traders with easy profits. But simple trades (e.g. Iron Condors) that work most of the time aren’t free lunch.

I recently spent three days on the desk at SMB in New York. It always amazes me how the mindset of professional traders differs from individual retail traders.

These professional traders already have dozens of edges that work for them. But they know the life-cycle of their edge will someday come to an end. It could be next month, it could be in 20 years.

The solution is to adopt the mindset of relentless, never-ending improvement.

Here’s your challenge.

To see the challenge and read the entire article click here…

Andrew Falde, Contributor, SMB Training Blog

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