Desirable core psychological characteristics for traders

The following is my reflection on the characteristics of successful traders. I do not go into long explanations on each of these.

Some of these overlap each other:

  1. Toughness and resilience – taking the hard knocks, not being crushed by failure, rising again, facing reality.
  2. Determination – a refusal to accept defeat. Probably a double edged sword as it could lead to even more catastrophic failures by the most determined who just have not understood and applied the tried and tested sound principles.
  3. Ability to filter out noise through appropriate concentration – too much can be going on at times.
  4. Attention to detail.
  5. Emotional management e.g. how well you manage your various emotions especially under stress, disappointment, or jubilation.
  6. Receptivity to new ideas and ways of doing things.
  7. Mental flexibility: ability to change mindsets when confronted with new information or changing situations.
  8. Ability to reflect and accept evidence-based criticism.
  9. Critical thinking skills: this is broadly summarised as the ability to be analytical in applying the rules of logic. It also involves analysing evidence and opinions.
  10. Ability to learn from mistakes (even if repeated)
  11. Self-management: Getting the basics right: sleep, food, recreation, time-management etc.
  12. People management i.e. dealing appropriately with all the naysayers who actually don’t know what they’re talking about.

This list is not meant to be complete or prescriptive. Individual traders can add or subtract from it as they feel necessary.

It is for each new or seasoned trader to reflect on these and rate themselves. But beware of the Dunning-Kruger effect (GIYF).  A more objective assessment could involve giving this out to colleagues in the form of a rating scale (from 0 to 7 on each stem), for them to complete in your absence and return anonymously.





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