What Successful Traders Do
I recently wrote a foreword for a very interesting book of interviews with successful daytraders that will be coming out shortly. Among the excellent contributors were @modernrock, @OzarkTrades, @InvestorsLive, @lx21, @offshorehunters, @elkwood66, @kroyrunner89, @DerrickJLeon, @johnwelshtrades, and @TomKellyLV, Although my trading is different from theirs--and theirs is quite different from that of portfolio managers I work with--I notice three broad areas of overlap.
Successful traders take risk. Successful traders are sometimes wrong. Successful traders take hits. Successful traders learn from the hits, get up, and move on. They are resilient. They succeed, as Churchill observes, by moving from failure to failure with enthusiasm.
Successful traders have clear criteria for what makes good trade ideas. They also have separate criteria for what turns good ideas into good trades. They don't watch everything, and they certainly don't trade everything. They wait for good ideas to become good trades.