SECRET OF DAY TRADING SUCCESS AND WHY SO FEW TRADERS GET THERE ?

Source: Dr Brett Steenbarger on traderfeed.blogspot.in 

Mostly active trading is hazardous to trader's wealth, but a small group of participants are able to sustain success.

This is not like most career fields, where an average teacher, middle manager, or sales person can sustain a living. An average performance in trading is one in which the trader does not make money at all. The Times article cites research suggesting support for the often-cited statistic that 80% of daytraders lose money.

I'm in an interesting position, because--as a trading coach--I see the actual trading of actual traders, not the performance claims of wannabee gurus. I also see which traders have been able to sustain meaningful livings from their trading and which have not. 

TEN CHARACTERISTICS I SEE AMONG SUCCESSFUL TRADERS 

There's no one formula for trading success, but there are a few common denominators that I've tracked in my years of working with traders:  

1) The amount of time spent on their trading outside of trading hours (preparation, reading, etc.);

2) Dedicated periods to reviewing trading performance and making adjustments to shifting market conditions;

3) The ability to stop trading when not trading well to institute reviews and when conviction is lacking;

4) The ability to become more aggressive and risk taking when trading well and with conviction;

5) A keen awareness of risk management in the sizing of positions and in daily, weekly, and monthly loss limits, as well as loss limits per position;

6) Ongoing ability to learn new skills, markets, and strategies;

7) Distinctive ways of viewing and following markets that leverage their skills;

8) Persistence and emotional resilience: the ability to keep going in the face of setback;

9) Competitiveness: a relentless drive for self-improvement;

10) Balance: sources of well-being outside of trading that help sustain energy and focus.

Over the years, I've learned to respect more the traders who sustain success over many years than the traders who have blowout individual years of profitability. The above criteria are a kind of checklist one can use to determine if you share the qualities I see among those career successes.

Ultimately, the most important contributors to trading success are twofold:

1) The development of concrete trading skills: pattern recognition, ability to execute sound trade ideas to create a positive expectancy, sound risk management;

2) The cultivation of the mental toughness, continuous learning, and discipline that enable you to adapt to new, challenging market conditions.

Sitting at a computer each day, not having a concrete strategy for the day, and relying on a vague sense of intuition to get you through is not going to cut it.

Success is something the great traders do, not just something they have. They work on building skills, they work on building themselves, and they have routines in place for accomplishing both.

Do you?