Most long term profitable traders possess a set of skills that lead to their consistent success over a long period of time. Here are the 10 skills that I have seen in common with so many successful traders. These were skills that had to be mastered before I was able to generate and keep long term profits from trading the financial markets.
- Traders must have the skill to create a trading system with an edge that rises above randomness and creates a high probability of long term success.
- Profitable traders know how to create good risk/reward ratios by managing their margin of safety on entry, their stop loss, and their potential open ended upside profits.
- Backtesting and doing historical chart studies is a skill they possess to see what worked in the past. To give them better odds of success in the present.
- They are not tempted to fight trends. They go with the flow until that stops making them dough.
- The ability to accept an unprofitable trade is wrong early in the loss.
- Trading is their business for making money and they treat it that way, not a form of entertainment and excitement.
- The flexibility to let a winning trade run when there is no reason to exit it early.
- They possess the skill to navigate the random nature of prices and focus on the signals that really matter.
- Profitable traders have developed an unbreakable faith in their trading system and their own ability to execute it with discipline over the long term.
- They have the skill to accept the unknown and that the future is unknowable and to trade what is currently happening.