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Who Succeeds and Who FailsтАФQualities for Success

Clearly, day trading is not for everyone. Certain qualities predispose a day trader to success or failure. Before we go on with a concise discusВэsion of the techniques, systems, and methods of day trading which I've acquired by long and hard experience through the years, I'd like to familiarize you with the qualities which either facilitate or limit one's success as a day trader. Many of the things I am about to say apply to success not only in the markets but in every walk of life as well.

To be successful in virtually any human endeavor requires a number of skills which are not easily acquired. Although the struggle to achieve these skills may indeed be an arduous one, the effort is worthwhile both in the long run and in the short run. I say this because there is a great deal of transference in skills across many different professions and undertakings. This does not necessarily mean, however, that a good engineer will become a good trader. Nor does it mean that a bad engiВэneer will become a bad trader. It's been my observation that choice of profession is not closely correlated with probability of success in the futures markets. Here is a list of qualities I feel are essential to success as a trader.

Flexibility

I have observed that extremely rigid personality types tend to perform poorly as futures traders inasmuch as they have not mastered the ability to think beyond the rules, a skill which is extremely important for the day trader. You will find most often that market entry is very specific and not subject to a great deal of interpretation, if any. Market exit however, is frequently more intuitive, although it can be subjected to more definitive and operational procedures. Consequently, when I refer to such qualities as discipline, persistence, organization, and the ability to follow through, I am not referring to any of these in rigid terms.

Perhaps the greatest single quality a day trader should possess is flexВэibility or adaptability. Such flexibility, however, must be maintained within the context of specific understandings, trading signals, and /or guidelines which are the subject matter of this book. A trader must be flexible not only to new ideas about the markets, but also to situations which develop in markets during the day. Hence, flexibility is an important qualiВэty which, unfortunately, cannot be taught. I can, however, give you some specific ideas about flexibility so that you may make the necessary adjustments to your own trading style.

Perhaps a better way to express this is by saying that in order to be a successful day trader, you must be "flexible but firm." In other words, you must understand the rules, the signals, and the timing indicators. However, you must apply them in a manner which is mediated by other understandings about yourself and about the markets. I will attempt to clarify this for you in the chapters which follow.

Consistency

Another important quality which the successful day trader must either possess or develop is consistency. By consistency, I mean the ability and willingness to follow a particular program or trading methodology day in and day out as long as the technique continues to achieve the desired results. In other words, if something you learn in this book or elsewhere is workВэing for you, then continue to use it until it no longer works or until you suspect that it is slowly but surely becoming ineffective. Too many day traders spend too much of their time attempting to improve on methods which cannot be improved. The fact is, not too many methods work consistently well in the markets, and, furthermore, those which do work well cannot be improved beyond a certain point. "If it ain't broke...don't fix it." Consistency is a very important quality which must be cultivated if day trading is to become a successful proposition.