Traits of Top Traders/Investors

Top Traders/Investors -- Putting It All Together -- Developing Excellent Skills!

By Ian Harvey

Introduction

It is important to understand, and if possible, emulate the qualities that most top traders/investors have, to profit from the stock market! Many of these qualities can be developed if there is a willingness to succeed. With a commitment to improvement in oneself, and adhering to certain business stratagems, profiting from the stock market, in which ever form you feel comfortable in, is feasible.

While there are many, many traits that are noticeable in top traders, this article concentrates on only four of major importance.

1: Personal Responsibility

This is probably the most important trait that all top traders have (or top people in any field) is the ability to assume total responsibility for what happens to them. And for top traders and investors, this means that they assume total responsibility for their investments results.

This means that if you lose money it’s not the market’s fault, it’s not your advisor’s fault, it’s not your system’s fault, or the fault of anything else. Instead, it is a direct result of what you did. When you assume this attitude, you can learn directly from your mistakes and trading becomes a major learning curve, setting a scenario which allows for constant improvement. When you don’t assume this attitude, then you get to repeat your mistakes over and over again because you believe that you were a victim of some external forces. 

Therefore, it becomes quite obvious that the ability to learn from your mistakes is much more sensible and profitable then the tendency to repeat mistakes over and over again.

Trait 2: Commitment

Becoming a successful investor/trader requires hard work. You must get to know yourself intimately because you are the source of your trading performance. You must develop a business plan to guide your trading. You must develop and test three or four strategies that fit within the big picture (as you see it) and then become part of your business plan. You must do your homework constantly. You must set routines and follow certain disciplines during the day on a constant basis. And all of this requires a lot of time and energy -- and it is only the people who are really committed who will put in the work necessary to become successful.

Trait 3: Mental State Control

There are many tasks to be adhered to when trading but the key to following those tasks is mental state control.

Each task requires a particular mental state in order to execute it properly and you must have the skill to step into that state and perform the task.

There are many required some of which are -- daily self-analysis, daily mental rehearsal, developing a low-risk idea, following the lead, taking action, monitoring, terminate bad positions, taking profits, daily debriefing, periodic review, etc.

For example -- one of the tasks of trading is the action step of terminating or taking profits. The mental state required is 100% commitment to action. There is no thinking involved, just 100% action. You should already know what to do when you get this signal because you’ve already developed a system that works. Thus, your job is simply to act. Think about when the tiger starts to leap on the antelope. He doesn’t suddenly think to himself, “Is this a good idea?” If he did that, he’d probably miss the antelope and break his back. No, his mental state is 100% commitment. Well, each essential task of trading requires a particular mental state and you must have the ability to step into that state.

Trait 4: Top-Down Discipline

In developing this sort of discipline, you must go through the following steps:

• Write out your dream life. What would you like to be, do, see, experience, and have in your lifetime in order for it to be ideal? Write this out completely.

• Write down the purpose behind that dream life. Write down your mission, your purpose and all of the whys behind that dream life. This step helps you get excited about achieving it.

• Write down your goals for the next year.

• Write down the purpose for each goal.

• Write down a series of action steps for each goal.

• And each action step (if it takes longer than a week for you to finish) could be considered another goal with a purpose behind it and a series of action steps behind that.

The net result of following these steps is that you develop a top-down discipline that helps you develop commitment and achieve almost anything you set your mind to achieving.

Conclusion

Now let’s look at what we have in these four qualities: -


• First you have a top down discipline that really helps you achieve almost anything you set your mind to achieving.

• Next you have the ability to get yourself into the appropriate mental state to do whatever you need to do with excellence.

• Third, you have the commitment to see your goals through to the finish.

• And lastly, but remember this was mentioned first -- you believe that you are personally responsible for what happens to you – which means that you can learn from your mistakes.

Therefore, with the right type of mind-set and with these four traits, you could achieve peak performance as a trader/investor or almost anything else you set your mind to doing!

"Success is simple. Do what's right, the right way, at the right time." - Arnold.H.Glasow

Source: www.stock-options-made-easy.com

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"It is always easiest to run with the herd; at times, it can take a deep reservoir of courage and conviction to stand apart from it. Yet distancing yourself from the crowd is an essential component of long-term investment success." - Seth Klarman

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"The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The Intelligent Investor is a realist who sells to optimists and buys from pessimists." - Jason Zweig

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96 Years Ago, This $310-Billion Man Revealed the Secrets To His Success

By Alex Banayan 

He’s richer than Bill Gates and Warren Buffett combined. And he started off as a broke Scottish immigrant. I’ve been dreaming of interviewing him for my book. The only problem? He died 96 years ago.

How did Andrew Carnegie, the man with the world’s largest steel empire, rise from no money, no opportunity, and no connections — to the richest man alive?

I’ve spent hundreds of hours researching Carnegie’s success, and here are the 5 best lessons from the man himself.


1. Get Out Of The Shade

One afternoon, a young man walked into Carnegie’s office to interview him about his success. Carnegie could have told the young man about his journey from poverty to riches or about his wild dealings with John Rockefeller. But instead, Carnegie talked about something else.

His optimism.

Carnegie said the most important thing in his life was his “ability to shed trouble and to laugh through life.” He said that seeing life through a lens of positivity was worth more to him than millions of dollars.

“Young people should know that it can be cultivated,” Carnegie said. “The mind, like the body, can be moved from the shade into sunshine.”

And it makes good business sense, too. By not getting weighed down by the negative, Carnegie could keep his focus on the positive, bounce back from failures faster, and see opportunities where other people didn’t know they existed.

Ask yourself: do you sometimes slip into pessimistic thoughts and negative self-talk? Are you missing opportunities because you let your mind fall under “the shade”? How much would your business grow if you taped a note above your desk that reads: “move your mind into the sunshine”?

2. Tell Him to Keep the Ten Thousand

Carnegie and J.P. Morgan were once partners in a business. One day Morgan wanted to buy out Carnegie’s stake, so Morgan asked how much he wanted for it.

Carnegie said his shares were worth $50,000, plus he wanted an extra $10,000 on top — so a total of $60,000. Morgan agreed to the terms. But the next morning, Carnegie got a call.

“Mr. Carnegie, you were mistaken,” Morgan said. “You sold out for $10,000 less than the statement showed to your credit.” Morgan had calculated that Carnegie’s stake was actually worth $60,000, and with the additional $10,000, that made $70,000. So Morgan sent Carnegie a check for the full $70,000.

Carnegie responded by telling Morgan to keep the extra $10,000 — which, adjusted for inflation, is over $130,000 today. Morgan replied, “No thank you. I cannot do that.”

When reflecting on this story, Carnegie wrote, “A great business is built on lines of the strictest integrity.” He learned from Morgan that it is better to lose money in the short-term if that means maintaining your reputation for the long-term.

Think hard about this: Is your business doing everything it can to ensure that reputation comes before profits?

3. Follow the Rule of Nine-Tenths

There was a story that changed Carnegie’s life. It’s about an old man who lived a life of many tragic events. People in the town pitied him, but the old man said, "Yes, my friends, all that you say is true. I have had a long life full of troubles. But there is one curious fact about them – nine-tenths of them never happened."

Carnegie learned from that story that most of the problems and “what if’s” we imagine almost never occur. Our brains have a tendency to dream up the worst-case scenarios and act accordingly — yet most of those almost never happen. And even if they do occur, they’re almost never as bad as we imagine.

By reminding himself of the “rule of nine-tenths,” Carnegie freed himself from the fear of the unknown and was able to take the risks he needed to achieve his radical success.

Be honest with yourself: Do you get caught up on the “what if’s”? Would your life be better if you followed the rule of “nine-tenths” and reminded yourself that most of those problems won’t actually happen? Are you willing to make a commitment right now to live by that rule?

4. Jump On 'Flashes of Lightning'

When Carnegie was hired for his first job, the interviewer asked him how soon he could start. Most people would have asked for a couple of weeks to transition. But Carnegie’s answer? “I can start right now.”

“It would have been a great mistake not to seize the opportunity,” Carnegie wrote. “The position was offered to me; something might occur, some other boy might be sent for. Having got myself in I proposed to stay there if I could.”

Carnegie didn’t overthink it. He preferred to act quickly and risk something going wrong than to act slowly and risk losing the opportunity entirely.

And this rule worked in reverse, too. When Carnegie realized he owned shares in a company he didn’t like anymore, he told his partner to sell all the shares right away. When his partner said there’s no rush, Carnegie shot back, “Do it instantly!” And good thing he did… that company soon went bankrupt.

Of course, it’s important to study the facts, but if you’re presented with a real opportunity, don’t risk losing it by taking your time. As Carnegie would say, jump on the “flash of lightning.”

How many opportunities do you think have passed you by because you didn’t jump on them right away? Are you ready to act like Carnegie and make your answer “I can start right now”?

5. Find Your "$2.50" Motivation

Early in his career, Carnegie was given a bonus of $2.50. When he gave the bonus to his parents to help support the family, he said “no subsequent success, or recognition of any kind, ever thrilled me as this did… Here was heaven upon earth.”

And from that point on, Carnegie knew he wanted to be rich. But not for himself. He dreamt of making the money for his parents, so they could live a good life.

As soon as Carnegie identified that external motivation, his drive turned into high gear. The key is that he wasn’t motivated to help himself. He was motivated to help someone else.

So whether you’re doing it for your parents, your children, or to help people who don’t even know your name — you need to have that motivation clearly in your mind to fuel you through the inevitable hardships on your journey to success.

Are you clear on who your “$2.50” motivation is? Who are you doing it all for, other than yourself? If you don’t know, figure it out. And if you do know, how can you remind yourself of that “$2.50” motivation everyday?

Andrew Carnegie is proof that if you work hard, keep your mind “out of the shade,” take risks, act quickly, and build a reputation of the strictest integrity — anything is possible.

And the craziest part? Carnegie is just one example of how it’s possible to work your way from poverty to radical success.

Source: https://www.linkedin.com/pulse/96-years-ago-310-billion-man-revealed-secrets-his-success-banayan

Quote for the day

"Any fool can criticize, condemn and complain - and most fools do. But it takes character and self control to be understanding and forgiving." - Dale Carnegie

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"You only have to do a very few things right in your life so long as you don't do too many things wrong."  - Warren Buffett