Saturday, May 12, 2007

Something to Aspire to...

Over at TraderFeed the uber-intellect Brett Steenbarger made this post a few days ago that I've read a couple times since he posted it. The theme of the post being "What Makes a Professional Trader." He gives 5 observations on what he sees as critical in being a professional trader and then sums up his findings with some words of wisdom. I wanted to include this post in my blog so that I will be reminded to go back to it in the future. So, what makes a professional trader? In Mr. Steenbarger's opinion the common threads among professionals include: (1) Following a variety of markets, having a framework for how they think about markets. (2) They think big and are aware of the inter-play between multiple markets, allowing them to capitalize on big moves. Small traders, on the other hand, may loose sight of the context of price action within a market and "lack a framework for thinking about proper and improper pricing." (3) A focus on risk management. (4) Reasonable profit goals. (5) Psychology for performance improvement. In summary: "The best traders, like the best athletes, are always working on themselves, always refining what they do. In an important sense, they don't just use psychology to improve their performance. They work on their performance as a means of extending their personal mastery."
A very insightful post from Dr. Steenbarger.

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