Does everyone have the strengths required to succeed in athletics, chess, ballet, military leadership, or poetry? Of course not; the proportion of people in any performance field who ultimately make their living from their performances is small. If everyone could be an elite performer, there would be no elite.
The question “Can anyone become a successful trader?” generally is framed within the contexts of weaknesses. The questioner feels that he might be too emotional, too undisciplined, or too cerebral to succeed as a trader. My sense, however, is that it is not the weaknesses that keep people from trading success; it’s their strengths.
Allow me to explain. At the moment I am writing this, I am thinking of three highly successful traders whom I have known personally. All have made more than a million dollars trading for multiple years. Each of these expert individuals possesses just about every flaw you read about in trading psychology texts. They are hyperemotional when they trade, they become stubborn and hold onto positions when they shouldn’t, and they rarely if ever engage in systematic planning before markets open. They succeed because their strengths overwhelm these weaknesses. Just as we saw earlier with Mick and Al, other traders who are less emotional, more disciplined, and more systematic may fail because they lack strengths that readily translate into trading edges.
Richie was a perfect example. A graduate of a well-known university and a varsity athlete, Richie might be the most personable trader I’ve ever known. With a winning smile, a warm personality, and good looks to spare, Richie was popular with women and others at the firm. As a developing trader, however, I found him frustrating to work with. He would sometimes spend more time talking with other traders about trading than he would spend actually trading. Half the time I would visit his office, he’d either have other traders in his room or he would be instant-messaging other traders about the market. The prospect of not making it as a trader upset Richie, but he was philosophical about it. He had already investigated businesses that he thought he could manage and had even thought through how he would manage them. Not surprisingly, all of the businesses were people oriented and involved hands-on interaction with customers.
When I heard Richie talk about his alternatives to trading, the immediate thoughts that went through my mind were: (1) He had invested more time into researching a future business than into researching any of his trades, (2) he sounded more excited about his future business than about trading, and (3) he was a natural as an entrepreneur. Richie was destined to fail as a trader, but not because of his weaknesses. Rather, his strengths were in other areas. He had skills as a leader, and he had prodigious people skills. I wouldn’t be surprised to find him seeking elective office someday. He certainly wasn’t built to sit at a computer screen all day and trade electronic futures contracts.
Recall that among my own strengths were relator, learner, and maximizer. Could I succeed at trading markets from open to close each day? Actually, I tried that a few years ago and found the process dull and meaningless. Without significant time devoted to learning and working with others, I felt that I was not fulfilling myself. My strengths, not my weaknesses, made me a failure as a full-time market participant.
The important thing in life is not to trade. The important thing is to find your niche: a field of work and a set of relationships that bring out the best in you. Too many traders find that trading brings out the worst in them. They’re feverishly climbing a ladder that is leaning against the wrong building. If you’re happier and more successful doing something other than trading, perhaps that’s the ladder meant for you.
The right ladders lean against our strengths.
Read More: Can Anyone Succeed At Trading?
