14 Characteristics Of Highly Successful Option Traders

successful option traders

There are many lists out there of what makes people successful in life, and they always include character traits such as dedication, focus, passion, single-mindedness, determination, and confidence. Of course, this is true and these qualities, when applied correctly, can certainly help you to achieve success. But if we want to become successful option traders, that requires somewhat different character traits to succeed and to make trading your living and your passion.

During my time working with Deutsche Bank and BB&T, I had the opportunity to learn from, observe, and be coached by some highly successful traders which helped me to understand the essential characteristics for success. When I started coaching people myself to become successful option traders, that experience has only reaffirmed my view on the kinds of qualities and features which marks someone out as a successful trader, from those that don’t make it.

Here Are The 14 Characteristics Of Successful Option Traders:

1. Being Completely Disciplined

It is not possible to be disciplined up to a certain point. That is just a cop out. Discipline is an all or nothing character trait, particularly when it comes to being successful option traders. Either you are going to become a successful trader, or you are not. If you are, you will need to exercise discipline within your trading behavior all the time to be successful. This doesn’t mean you have to focus 100% of your day on trading alone – that would be crazy. It means that you are 100% committed to becoming better over time.

2. Learning From Losses

Every trader loses money, and you need to be able to accept this as a fact of your newly chosen life without panicking. Everyone in this field loses money, but the character trait that separates bad traders from successful options traders is the ability to keep going and to learn from the loss. Use the loss as a learning opportunity, to see where you can move your strategy on, or adjust it to reduce the risk. At Option Alpha we share our live trading examples so watch some of these to see how we cope with losing trades.

3. Always Be Willing To Learn

The markets change every day, and there are always new trends, strategies, and ideas springing up from across the industry. You need to make sure that you keep up and are adaptable and willing to learn new things on a daily basis. Make sure you are signed up to relevant news and blog sites so that you always have the latest details at your fingertips about the market place. Successful option traders are always learning.

4. Be You

Your trading will reflect your personality – don’t just follow what everyone else is doing. Take time to understand the market, look at your personal trading goals and aspirations and your willingness to take a risk and step out of your comfort zone. If you don’t match your personality to your trading style you are unlikely to be happy or to succeed.

5. Make Your Own Trading Decisions

You need to learn to think for yourself in your trading career. While it’s good to know what’s going on in the news and media, you need to make sure you are making your decisions and not being influenced too much by anything around you. You need to learn for yourself and take responsibility for your choices and actions. Learn as much as you need to be able to make personal decisions and reach your conclusions. That’s what marks out the really successful option traders.

6. Follow Your Own Trading Plan

You need to learn to think for yourself in your trading career. While it’s good to know what’s going on in the news and media, you need to make sure you are making your decisions and not being influenced too much by anything around you. You need to learn for yourself and take responsibility for your choices and actions. Learn as much as you need to be able to make personal decisions and reach your conclusions.

7. Be Proactive, Never Just React

Successful options traders understand that their greatest enemy is their own emotional state and they understand just how dangerous it can be if they overreact and make quick decisions without thinking. A real character trait for success is never letting emotions control your activities in the market. You should always follow your trading plan and make logical decisions. Be proactive and understand the market through your learning, rather than just reacting to it.

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8. Broaden Your Learning Scope

Don’t just stick to one aspect of trading, Make sure you are opening to learning about options and futures and stocks and forex as that will help you to become a better overall trader. You need to understand how the markets all work together and affect each other to help make the most appropriate trade decisions for your portfolio. Don’t dismiss any aspect as too hard, or not relevant. The more you learn the more armed you are for any trading situation.

9. Take Your Time And Be Patient

A successful options trader will be quick to take losses and slow to make profits. Beginners take profits quickly because they’ve never had them before and fear to lose them. Wealth isn’t built in a day or a week – it is slowly accumulated with consistent trading strategies. Take your time and be consistent and patient, don’t rush in and don’t panic. Just follow your trading plan.

10. Avoid The Ego Trip

This is a characteristic that applies throughout life and to any profession but the most successful people are not full of ego and a sense of self-importance. Take that dedication and discipline you are using to trade well, and remain a respectful and humble person.

11. Keeping Accurate Trading Records

Having the right records to refer to will help you avoid making wrong decisions and also making losses. Keep accurate records of your trading book to learn from and for your peace of mind to show your earning/losses if you need to for tax purposes.

12. Trade To Live, Don’t Live To Trade

The ultimate goal of any trader is to make money and be financially independent but that should never mean spending every waking hour watching the stock market movement on the screen. Get out there and enjoy life as well, after all, you only live once!

13. Develop These Character Traits For Yourself

If you’re serious about trading for a living, working to incorporate these traits is a step closer towards your goal. Starting small and determining why you want to become a trader in the first place will help drive you through the tough times as they are inevitable. Just as I mentioned in #1, the determined and disciplined trader will always make it in the end!

14. Reader’s Choice

Now it’s your turn to add your comments and let me know what YOU think makes a successful option trader. See you in the comment section.

About The Author

Kirk Du Plessis

Kirk founded Option Alpha in early 2007 and currently serves as the Head Trader. Formerly an Investment Banker in the Mergers and Acquisitions Group for Deutsche Bank in New York and REIT Analyst for BB&T Capital Markets in Washington D.C., he's a Full-time Options Trader and Real Estate Investor. He's been interviewed on dozens of investing websites/podcasts and he's been seen in Barron’s Magazine, SmartMoney, and various other financial publications. Kirk currently lives in Pennsylvania (USA) with his beautiful wife and two daughters.