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In the good old days journeys began with one footstep on the ground rather than with a search enquiry on Google. Typing in “how to be the perfect trader” reveals a mishmash of partially fitting results. But we never really get the answer to the question, unless you count pearls of wisdom from generic YouTube videos which state the importance of having a strategy, being disciplined, and employing risk management strategy.
Of course, most people with this kind of mindset and the ability to follow it are accountants, brain surgeons or airline pilots, and don’t bother with the financial markets. But even who are by nature gamblers and who seek the thrill of the biggest casino in the world, would like to know if there is a short cut method to gaining easily won unearned income.
But turning the issue upside, is it not worth considering the any characteristics that contemporary trading heroes have? Are they gamblers or disciplinarians, strategy followers or intuitive. For the sake of argument the current A list, at least in terms of those in the public eye, would include Simon Cawkwell a.k.a. Evil Knievil, Lex Van Dam, Anton Kreil, Alessio Rastani, and Alpesh Patel. Of course, it would be difficult not to mention people a couple of people who could turn out to be the all-time greats of this area: George Soros and Warren Buffett. Put them all together and you would have a super group of people of whom most of us would be delighted to manage or even just punt our money.
But the $64,000 for wannabe trading giants is what do they all have in common, if anything, and is it possible to learn or replicate any of the skills that they clearly have? The reason this is such an important issue of course is that it is said that 90%of traders who are in the market short-term lose money. Even for longer term players we know looking from the stock market over the past decade, unless you have an edge of some kind over the past decade you would not have had a party either.
Something I would say in the brief contact I have made with a few of the above heroes, along with what is generally available, is that they seem to possess almost superhuman cognitive qualities combined an ability to read people and assimilate information. To describe them as being in possession of a sixth sense seems too easy and horrifically clichéd, but there is no other convenient way to describe this point of difference. There is also no pleasant way to accept that for most of us the aforementioned group are plainly giants in all senses of word.
A brief brush with any of the above people will reveal to most of us that where whereas we may be happy or even proud to be the equivalent of a car running down the highway at a decent speed, the difference between them and us is that of a Mini traveling at 80 miles an hour and a Ferrari at the same speed. A Ferrari at 80 miles an hour barely has its engine switched on, instead with a Mini at the same speed you have the sensation that parts of the car may actually break off if you drive any faster.
That is not to say if you do not appear to be a Ferrari at first glance you should give up on the whole event. But you should be reminded that unless you know you have an edge and are capable of employing it in the financial markets it will be difficult to reach the higher echelons of perfection or at even surviving in the trading game.
To be continued…
