Tuesday, June 19, 2012

5 Qualities of Top Traders

Summarized from a Post by Van K Tharp

1. A belief that you create your results in life.

Most people don't understand this concept. They repeat the same mistakes over and over again because they blame their mistakes on external factors.

2. The interest and desire to really understand yourself.

You cannot understand how you create your own results if you don't know yourself intimately.

3. Discipline to continually work to improve yourself.

Top traders often have a passion to work on themselves.

4. The ability to strategize well. 

Good traders tend to excel at high skill games (e.g., poker, backgammon, chess, blackjack) because they can create good strategies and stick with them.

5. The ability to get in the zone. 

Top traders can become one with the market and accurately sense what it is doing. They have the ability to live in the present moment without being influenced by the past or the future. It's a very intuitive state and often gives them a total sense of how successful their moves will be in the market even before they make them.

Now, take a look at yourself and consider honestly if you have what it takes to be a top trader.


Jitender Yadav said...

Respected Sir,
Thank you so much for these useful postings. Inspired by you, I am also now reading more and more about trading and accumulating knowledge.

I recently finished reading "Super Trader" by Dr. Van K Tharp. In this book he suggests traders to take these 5 steps--
1. Work on yourself and your personal issues so that they
don’t get in the way of your trading.
2. Develop a business plan as a working document to guide your trading.
3. Develop several strategies that fit your view of the big picture and understand how each of them will perform in various market types.
4. Thoroughly understand your objectives and develop a position sizing™ strategy to meet them.
5. Monitor yourself constantly and minimize the number of mistakes you make. I define a mistake as not following your rules.
Dr. Tharp emphasizes on considering trading a serious business like any other business.

Your Fan
Jitender Yadav
New Delhi

alhad said...

Hi Sir,

I regularly follow you on TV and on your blog. On TV you are repeatedly saying that market is in up trend and one should look to buy on dips.

However earlier in your blog/ on TV you have explained that if an opening Gap is filled up during the day, the trend is over.

That has happened on Monday, market opened with a gap and that Gap was filled in entirely by the end of the day.

I will like to know whether the up trend is over? How does one take a call on market in such situation?

I appreciate if you can answer my query.



SWEETY said...

A comprehensive, short and beautiful message from you dear Sudarshan bhai. It is timely

I wish to share my own recent experience here.

On 15-06-2012 Friday evening I closed all my trading positions, due to two heavy events coming to-gather, out of which one is a global shaker. (here i am talking about my trading positions only - not about my investment holding and their respective hedges)

On 18-06-2012 Monday morning - i was waiting and watching. I decided to go short on NF around 5300 if there was a breakout - other wise if it breaks down short around 5150. In both the cases, there is one more confirmation required with a popular indicator - that means, the price action should be just below 5150 and the indicator should also give me short signal

After RBI announcement, NF tanked - and market did not give me an opportunity to short just near around 5150. My trade rules state that I can enter the trade only within 0.5% of trade points that is predetermined. By the time i get short signal, NF price action was some around 5100 - 5090. This far below the 0.5% radius of 5150. So, I could not initiate short, as per my rule.

I relented here and broke my own rule. There was a fight going between my mind and heart - heart said **every one is short - see the long red candle with huge volume - you idot hell with your rules - go and short or at least buy some puts** ; but my mind replied a strict NO.

Finally heart own the battle - My mind warned me **your stops loss point would be far above and that is not good to keep such a wide gap - this is against your trading principles and rules**

My heart replied lets keep 5104 as stop loss and go short.

Finally there was a compromise - I decided to buy some puts with a stop loss at 5114 - but quantity i bought was lesser than the usual.

Today morning (19-06-2012) around 12.50 my stop was hit and i sold my puts with a small loss -- however small, it is a loss.... a punishment i have to bear as i broke my own rules.

After hitting my stop, market is coming down.

This is not the first time i am breaking my own rules... this is the **n**th time. What makes me scared is not the loss, but my tendency to break my own rule... i am afraid it becomes a habit; and now i realized this is what dangerous.

It is high time to get rid of it as quickly as possible - and i sincerely pray that this is where almighty should help me strongly.

Now i am waiting for my signal generated by my trade rule and i will strictly adhere to it.

Let me see how successful i am in NOT breaking my own rules. LoL

Rakesh Shethia said...

awaiting your book...