Number one attribute of successful traders

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From time to time, I will think about what differentiates veteran traders and rookie traders. What is it that the successful traders, the traders who endure through a long career, learn most of all about the process? What makes them stand out? 

Apart from a couple of battle scars and a lot of gray hairs, I think there’s one clear thing we learn as we grow as traders. Over time, we learn that trading isn’t primarily about the trade. 

Now, don’t hear what I’m not saying. I’m not telling you to go out and make sloppy, stupid trades. I’m not telling you to take big, unnecessary risks because, well, “Rob Booker told me the trades I take aren’t important!” 

The trades are obviously very important, and each individual trade should be weighed, considered, thought about, examined, etc. before you dive in. All trading involves significant risk of loss and you should never risk more than you can afford to lose. That’s all common sense stuff! 

But even so, the trades aren’t the most important things. “If the trade isn’t most important, then what is,” you might be asking. Well, if it’s not the trade, it’s the trader.

The traders who have done this a while, the traders who really know what it takes to survive, they all recognize that being a successful trader is more about winning the battle with yourself than it is about finding the perfect setup or some flawless strategy (not only because neither of those things exist).

Let me give you a few examples from my own trading career:

  • In 2010, I was down $50,000 on a Swiss Franc trade
  • In 2007, I was sitting across the office from my friend Greg, and I was losing $30,000 on a Swiss Franc trade
  • In 2004, I lost $50,000 in three seconds on the U.S. Dollar/Japanese Yen

I’ve got a lot of other embarrassing losses, and every other longtime trader does, too. 

Do you know that feeling? When you’ve lost an amount of money that you can’t even believe you had in the first place? It feels like you got punched in the gut by the Incredible Hulk, or at the very least Hulk Hogan or somebody. The wind gets knocked out of you and you’re just frozen in shock, unable to do anything. 

Even now, as I sit here typing these words and thinking about those trades, I can still feel that feeling. Man, that’s not a good place to be as a trader.

And yet, I’m sitting here, typing these words to you, so obviously, none of those trades knocked me out permanently. And really, it’s that that I want to focus on today.

What is that attribute that makes us get up and shake the dirt off? 

What is it that makes athletes perform their best when their back is against the wall? Or, better yet, return from a brutal disappointment? 

It’s not intelligence. 

The smartest people in the world aren’t always the most successful. And the most successful people I know aren’t necessarily book smart. They can’t tell you the circumference of a circle, and they could care less that they can’t, too.

Because they have something more important. They have grit

Grit is that unifying, magical quality that makes you get up after you’re knocked down. That’s what makes you shake off the $50,000 loss and be crazy enough to place another trade.

The most successful people I know are all gritty people. All of the traders I know who have found success are gritty, of course. Because losses are always going to happen. And if you don’t have what it takes to get back up, then you’re not going to last long. But it’s not just traders… 

I’ve got a friend who is a former-CIA agent. You think he knows a thing or two about grit?

My friend Kyle is a mental health professional who trains people in how to strengthen their mind (AKA: GRIT). 

David Goggins may be a nutcase, but he’s a nutcase who ran an ultramarathon simply because of his own determination to do so. 

Megan Rapinoe just got named Sportsperson of the Year. Do you think she’s got some grit? 

Grit is the attribute that unifies all of these individuals, as well as firefighters, police officers, teachers, bakers, candlestick makers… any successful person has some amount of grit.

So when you think about a career in trading, don’t think about the trades, the system, or the strategy. Think about yourself. The question isn’t “how do I avoid mega mistakes like that idiot, Rob?!” 

The question is, when those happen to you (and I’m sorry to say, they will…) how will you respond? 

You can respond by giving up, bowing out, taking your ball and going home. Honestly, there’s not any judgment there. Trading simply isn’t for everyone.

But you can also respond with grit. You can develop yourself as the kind of person who rises to the occasion and does his best when his back is against the wall. 

That’s what makes a successful trader. No one ever avoids losses altogether. The most successful traders in the world have all lost more money in a single day than any of us will ever make doing this. And yet they kept going. 

That’s why the trader will always be more important than the trade. And I think it’s the most important lesson a young trader can learn. 

And now you know. I hope this helps.

Rob Booker

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