14 Characteristics Of Highly Successful Traders

The typical list of success traits always includes characteristics such as discipline, focus, passion, commitment, determination, and confidence. Again these can be found almost anywhere and in any book you read. When applied right they can act as a framework for achieving success in all aspects of your life.

I also intentionally left out #14 on this amazing list for you to add your comments and share your ideas on what makes a successful trader (or not).

But what I’m talking about here specifically are the characteristics that relate to trading for a living. During my time at Deutsche Bank and BB&T I had the opportunity to watch and be coached by some very successful traders. Then when I started coaching people 4 years ago it only reaffirmed the qualities that separate the “successful” from the “unsuccessful” traders.

1. Discipline Is All Or Nothing

One cannot be disciplined up to a certain point and yet call themselves disciplined. It’s all or nothing. Either you are going to be a trader or you are not. Discipline needs to be exercised at all times and not sometimes only. This doesn’t mean you focus 100% of your day on trading – that would be crazy – but that you are 110% committed to becoming better over time.

2. Losing Is Welcomed To Learn From

You will lose money – and the sooner you accept this fact the quicker you move on. Since everyone losses money, the thing that separates great traders from bad ones is that great traders learn from the losses. Welcome the opportunity to advance your strategy or adjust your trading plan after a loss. Here’s an example of one that happened to me recently.

3. Never-Ending Student Of The Markets

The markets are changing every day and you need to fully understand how it works.  As it’s changing you have to learn to evolve and change with it. Sometimes this requires adjustments on your part. The moment you engage to learning new things, there will always be good opportunities which will be opening up.

4. Unique Trading Personality

You are an individual and your trading should reflect that. Trading has a way of uncovering the personality of individuals by making them trade outside their comfort zones. So it is very crucial to match your personality with the right kind of trading.

5. Can Separate News Hype From Reality

It is a crucial trait for you to know how to think for oneself without being influenced by the media and the news. All the great traders normally know how to think for themselves on some level. This is why I tell every person who signs up for a members that I don’t want them around for 5-10 years (that means they haven’t learned anything). You need to be honest with yourself, make personal decisions and reach your own conclusions.

6. Simple, Yet Clear Planning

It is more likely for a trader to be successful if you have a plan than if you don’t have one. What are your goals and how will you get there? How will your protect yourself from losses and at what point will you take profits? What will you do with your winnings? There are countless questions to ask here.

7. Proactive And Not Re-Active

Probably the most important on this list! A trader needs to know how dangerous it can be if you overreact and make quick decisions without thinking. The ability for you to become a better decision maker will arise from experience gained in trading. Be proactive in knowing every possible move ahead of time and don’t just react to what the market gives you.

8. Commitment To Learning What You Fear

The most attractive things in life comes from the most unattractive activities in life. Most successful traders have developed over the years a sense of “status-quo” in their plan. They got burned by options before and will NEVER trade them again. Well, you need to learn about options and futures and stocks and forex so that you understand how they all work to affect each other. Don’t be afraid to re-learn!

9. Being Patience With The Markets

A successful 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 losing them. Wealth isn’t built in a day or a week – it is slowly accumulated with consistent trading strategies.

10. Remaining Extremely Humble

Okay so I goofed and this one does apply to life also. But still holds true that you need to be a persona of humility and respect. Give to others and you will receive.

11. Keeping Accurate Trading Records

Having the right records to refer from will avoid a trader from making wrong decisions and thus avoiding losses. Keep accurate records of your trading book.

12. Balancing Your Life Outside

The ultimate goal off any trader is to make money and be financially independent (or at least that’s my goal). However, it should be understood that life needs to be enjoyed and not suffered in the name of sacrificing for the sake of trading. Go to the gym, take a walk, do something other than sit in front of the trading screen all day for God’s sake!

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

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 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 trader. I’m sure that there are qualities here that I haven’t even thought of yet. Maybe there are some characteristics that “bad traders” exhibit which makes them unsuccessful…

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.

  • GirlTrader

    Great list Kirk! I think what you missed was that successful traders are a part of a great network. They learn, grow and feed off of like-minded traders. At least that’s what I think…

    • Kirk

      Yup and hopefully this blog is one of those networks of great like minded traders – I happen to like it :)

  • Jason

    I disagree to some extent with number 7. Some traders may work better being reactive.

    While I agree that you should certainly balance your life with other pleasures/passions, living to trade may not be all that bad. Extreme determination and dedication are key to being an elite trader.

    14. Risk Management. There are other traits I could put in here, but I really believe risk management is the most important thing for the longevity of a trader. Ideas don’t have to be sound and entries don’t have to be perfect, but with good risk management the trader will live to try again (possibly even walk away with a profit),

    my 3 cents

  • carlos

    Great ideas. The most two important things to be a succesfull trader are discipline and risk management. You can have winners trades in a row but with just one bad trade without a razonable stop loss your loss could erase all the profits you get. The discipline let you be aware of thye market and the risk management let you have small losses and big profits. The risk/reward ratio must be at least 2:1.

  • Brian

    I’m on board with Jason and carlos on the extreme importance of risk management, aka money management. Always know how much you will lose if the trade goes against you, rather than dreaming of how much you will make. Always have an exit strategy.

    • Kirk

      Great point about “dreaming of how much you will make”! I like that phrasing!

  • Dale Hagglund

    Clearly, and most importantly, is to have great mentors. We aren’t trying to reinvent the wheel here, but to use the knowledge that other SUCCESSFUL traders already employ, is worth it’s weight in gold.

  • bsgforex

    Great one…………. all traders needs to understand and accept the market from its own perspective rather the trader’s own view.

  • Trade what you see..not what you think
    (great post Kirk)

  • Great list! I have nothing to add except that this information is right on based on my own trading experience. Keep up the great work.

  • Gabriel Celebria

    Great Read. Very helpful. I will surely keep this in mind

    • Gabriel Celebria

      @Gabriel Celebria, I don’t really have anything but i think setting a goal first is needed

  • Eric Anders

    i must agree with those characteristics that you’ve listed. if a person have all of these, then i’ll bet my bottom dollar that they’re on their way up in trading. although i have one more to add, my 14th.

    14. DON’T EXPECT TOO MUCH. or another applicable idiom would be DON’T COUNT YOUR CHICKENS BEFORE THEY HATCH.
    – this industry is not predictable. you win, you lose. losing is inevitable though, winning is some sort of scarce, but it really depends. one thing’s for sure, that everyone in this industry had their fair share of losses. but first things first, don’t expect too much. if you win, then it will be a really great news. but if you lose, because you’re not expecting anything, you’ll easily move on and get on. plus, you’ve learned another lesson, and won’t apply it the next time. equals, more chances of winning.

  • Art

    Better to sell naked puts than write covered calls. Basically, they are one and the same.

  • nastrading

    Nice job bro. Decent list.

  • Bret

    Always remember in the markets perception is reality.

  • I think #14 is “Enjoy Trading”! If it becomes a burden or weighs heavy on you you’ll probably start to slip in some of the other 13 characteristics. The more you enjoy trading the better you’ll weather the bad times and enjoy the good ones!

  • Deepak

    Most important trait is removing emotion from trading … Avoiding that 1 bad trade that wipe out profits of many successful trades .. not falling in love with a stock .. like i did with AAPL 2 summers ago and saw it fall from 700 to 350 and lost a bunch of money on the bull spreads i had on it. Still regret those trades a lot as i always believed AAPL would bounce back and it never did ….

  • Very true.

  • rick

    Have a clear strategy that you will stick to
    Keep trades small – longevity and less fear
    learn to manage these emotions – fear, greed, regret, hubris
    Keep a daily trading diary, where you address the above emotions as well as the strategy and the trades
    choose safety first – know your exit/potential max. loss – chose safety over higher profit
    Don’t trade if in doubt of self, the trade or your strategy

  • Great name as well :) Thanks for the comments!