The emotions of trading. The psychological edge. Being new to trading, (7 months) I can recognise it is the game skills that I have built up over time playing scrabble and bridge, that are helping me get better at it. I find that for me, it helps to forget that it's about money and instead concentrate on percentages, make it about numbers and play it like a board game, developing rules and strategies. I jumped in with no knowledge of trading, a two year history of fa-based investment and a tiny budget which got decimated in the first fortnight as I struggled to work out what the hell was going on. I persevered and enjoyed a few nice swims in between getting rolled by the dump waves. I feel very lucky that a friend, who is a daytrader, explained liquidity to me so that I stopped buying stocks like LKO that look wow so cheap but have no demand. He suggested that to begin with I don't trade any stocks that aren't turning over $200k a day and don't have at least a 2:1 buy/sell ratio. While I used this as a guide and not a rule, it has kept me in better stead.
My sister in law works on Wall St. She is a ruthless shark who would eat her own children if they got in her way. The Wall St mentality is that Money is Everything. They judge themselves and those around them by how much they have, how much they make, and their stress levels are ridiculous. They can keep it.
I am enjoying developing the psychological edge I need to be a successful trader. When I analysed my failures and discovered nearly all of them were from myself breaking my own game plan, I was thrilled because it is one of the few things I can learn to control. While playing Bridge, I learned that it's not important to win every hand, sometimes a hand can be forfeited to set up a better run. Playing Scrabble, I learnt to never ever leave a triple word score open. I'm strict. But hard to beat. I remind myself when trading that I have to stick to my trading rules just as I would at a game of Scrabble. And it works.
There is a lot of talk of what personality traits make a good trader. I think perseverance would have to be a big one. A love of winning. A love of strategy games. The ability to think on the spot, change direction when needed, have a plan b and a plan c. A desire to make money. And a love of research doesn't hurt.
