A must read(1): qualities of traders

1. First on the list as the qualities of traders would be discipline. I have never seen a trader who has been very successful but has not been disciplined. I think that\'s probably an absolute essential.
   
   
2. Secondly, money management and risk control is certainly critical in one form or another. Most of the traders acknowledge that they consider money management actually more important than the methodology.
   
   
3. The other thing that is definitely worth mentioning is that successful traders find an approach that fits their personality. Time and time again, The method that a trader is using very much reflects that person\'s characteristics or natural tendency. For example, Paul Tudor Jones is always watching multiple monitors around his office and yelling out orders on open phone lines to a number of different floors. It was almost complete bedlam, but he actually thrived in that type of atmosphere. That\'s the way he traded.
   
   On the other hand, there are people use a very analytical and quiet type of an approach. The most extreme example is Gil Blake who came up with a method of fund timing. He would actually spend weeks at a time in the library going through microfiche looking for price patterns in mutual funds. He didn’t even use a computer. He would be then trade his system from a home office in his bedroom, without any contact with other people. That\'s the other extreme, and this methodology really worked well for who he was. Most people have heard about the importance of discipline and money management, but the criticality of having a method that fits your personality is certainly something that most people don\'t realize.
   
   
4. Another trait certainly worth mentioning is confidence. It\'s a bit of a chicken-and-egg question. Are great traders confident because they succeeded or do they succeed because they are confident? Of course, one person\'s confidence could be another person’s cockiness, and it can be a thin line between the two.
   
   
5. Love of what they are doing tends to be another important element. This trait is even reflected in the language great traders use. Some of the analogies included: “trading is like a three-dimensional chess game,” and “trading is like a 10,000 piece puzzle where someone is always taking out some pieces and putting in new pieces.” One trader patted his chart book and said, “it is like a treasure hunt; somewhere in here there is a treasure and my job is to find it”. These are all game-like analogies. What does this tell you? It tells you that for these people trading is more like a game than work.
   
   
6. Trading is also hard work. People are often attracted to markets because they think it\'s an easy way to make a lot of money. But in reality, the people who are successful work very long hours. Sometimes they work every day, rarely taking vacations, and even if they take vacations, they are still involved. These people are not attracted to trading as a way to make easy money. The traders who really succeed are the ones who work very long hours, very intensively, often to the point of obsession.
   
   
7. Another important concept is flexibility. Really good traders do not get married to their positions. They don\'t hope that the markets will go in their direction. They act immediately. If they believe they have made a mistake, they get out and may even reverse their positions if they feel that\'s the appropriate action.
   
   The best example is probably Stanley Druckenmiller who made the incredible blunder of switching from short to long in the U.S. equity market on October 16, 1987. (For people who have trouble placing the date, it was a Friday.) Over the weekend he realized he had made a mistake. He came in on Monday morning with the market opening way down and not only covered his new long position but also reversed back to the short side. That\'s the classic example of a trader’s ability to be totally flexible.
   
   
   - Jack Schwager