If you read Market Wizards, you know that there are many different trading styles and all of them can be successful. Trading is not a thing you learn out of books or a YouTube video, it must be learned through experience. That is true for scientific trading methods, too.
To be a successful trader means to find an approach with mirrors your own identity. That’s very hard, because the most traders start their career when they are young. Often they have not the needed self-awareness and are in the middle of the journey to find out more about themselves. How do you want to know what suits you at that point in time?
What’s my personality?
It all begins with some basic assumptions. Look into yourself and ask yourself:
- Do I have fun with analytics?
- Am I a solver of abstract problems and challenges?
- Do I like programming software or mathematical algorithms?
- Am I an artist and do I like music, arts or graphic design?
- Is economics and economic relations one of my favorite topics?
This is very basic, but a point to start with. You must find something which suits you and where you already have some experience with. From biologic point of view: Where did you already build paths in your brain?
In that situation books about success and self-improvement can help. They often contain methods to find your personal strengths.
If you don’t work on that topic, you will never become a successful trader because you will never find an approach which suits you.
Forget predefined trading methods
I am very sure that the most traders will fail if they use trading systems from other people. They don’t mirror your personality and that’s the point where you start to sabotage it.
It doesn’t matter if you use an automatic trading system or a discretionary trading approach. If you can’t accept the outcome and decisions you will start to sabotage it. That’s why it’s so important to find a compatible approach.
You must start the journey of finding your own approach. In that journey trading approaches of other people can be an inspiration. Sometimes they match your personality to a high degree and you only have to adjust just a small parameter. In other cases you have to develop a complete trading system by yourself to accept it completely.
There is no shortcut
Finding you own trading style is a difficult thing and there is no shortcut. Often it means to get familiar with yourself and your identify.
Mistakes are unavoidable on that path. But every frustration and mistake will bring you closer to your goal. It is important to reflect your mistakes and your actions to learn from them. And be sure: Your journey is never finished because your personality will change over time. I am sure that you will be a different trader in 10, 20 or 30 years.
There are some sources which helps a lot:
- Books and videos about success, psychology, motivation etc.
- Biographies of other people.
- Spiritual books, videos and courses.
- A good mentor or coach which helps you.
In a nutshell: Use everything which helps you to know more about yourself!
My personal experiences
If I look back I can’t say exactly where I started as a trader. My interest in trading got stronger over time until it started to be my passion.
At the beginning I struggled a lot and tried every approach and every trading instrument. One month I was a pure technical and the other I was a fundamental technical trader. The next months I traded stocks, the other I traded certificates (popular in Germany). I tried different subscriptions of German trader platforms and newsletter …
But when I look back, certain things always accompany my trading career:
- Cutting losses with a stop-loss order always made sense to me. Maybe that based on my thinking about a businesses. You must make bets, but the bets must be small enough not to lose everything you own.
- Trading stocks. Although I traded every trading instrument on earth, I tended always to trade stocks. I like to understand what the company is doing and I have a strong attraction to technology and innovation. I have a lot of knowledge in this field and can assess how important a special technology is.
- Technical analysis. I am a very visual person because I started in the graphic design business. That means I have a trained eye and can quickly find patterns inside a chaotic image. I also like music very much. That makes me familiar with patterns and rhythms.
- Rule based discretionary trading. Although I make some analysis, this is not my strength. I believe in experience, craft and rules. Rules helps me to improve my work and experience helps me to find rules. I can develop simple own screener and indicators, but I can’t develop automatic trading systems. That’s why I always used a rule based discretionary approach. I tried some more systematic approaches in the past but I can’t stick to them. It doesn’t feel right and was not compatible with me.
I never would say that I am at the end of the journey. I always have fields where I struggle with. In the last months I tried to find out how important fundamentals are in my approach. Today I can say: Not so much. But I am very sure that there will be some challenges in the future. As long as my personality growths and changes I will be in the journey to find my own trading style.
Here is a small list of recommended trading books about this topic.