When you look at the best and the brightest, it’s often necessary to merely admire them rather than actually become them. Not everyone can be the best and the brightest, but it’s nice to know that ideals are possible, at least one person made it. It’s tempting to elevate them to the status of an idol, hoping that if we emulate them, we can be like them. Trading is a field where few reach the status of an elite trader. The closest most traders ever get to such greatness is reading about Jesse Livermore or the “Market Wizards.” Although we may never join this elite group of super-traders, it’s inspiring to study them. It’s motivating to emulate them and believe that someday if we work hard enough, we’ll achieve just some of their greatness.
It is motivating at times to forget about how you are doing right now as a trader and dream about what you can be. Rather than limit our thoughts, we can dream about the perfect set of circumstances that will ensure success. What would you need in terms of equipment and resources? How much money would you need? What kind of time commitment is necessary? You might not meet the ideals, but it is useful to think about how close you can get.
Perhaps the single most important asset you can have as a trader is a pure passion to succeed. That doesn’t mean focusing on becoming the richest, most famous, or the best trader in the history of the profession. It means loving what you do and not caring about the outcome. Upon reading the interviews with the “Market Wizards,” one can’t help but notice that they all had a long love affair with trading. Many took any job they could find in this business, just to get the exposure.
It is apparent that they would trade even if they merely made a living wage. The irony is that they have such a passion for trading that they voluntarily work tirelessly and achieve profitability as a consequence of their efforts. It is a passion for trading that gives them the focus to concentrate on studying the markets, learning the nuances of the game, and working hour after hour to build up their repertoire of skills to the point where they can handle anything the market throws at them.
The ideal trader is fearless but knows how to control risk. He or she can put on a trade with unfailing objectivity. You may know of some traders who are fearless, yet give it all back because they don’t take proper risk controls. So although the ability to take risks in an ideal characteristic, it must be tempered with a healthy skepticism of the markets. The ideal trader finds the proper balance between risk-seeking and risk aversion.
Besides psychological characteristics, the ideal trader has a wealth of experience with the markets. They have an arsenal of tried and true winning trading strategies and virtually unlimited trading capital. If only we could be the ideal trader? We could conquer the world of trading. Some will make it, some won’t. But it’s fun to dream, and it is often useful to think about what you need to do to become a market wizard.