Trading can be regarded as timing strategy(s) combined with a sizing strategy. Math is pretty much worthless for timing AFAICT. Creativity is much more valuable. For sizing, math is indispensable ... unless you get too much of it. Mathematicians are surprisingly (to me) inept at figuring out optimal position sizing. Apparently after a certain amount of math training, the obvious is no longer obvious.
The trader who understands, deep in his bones, that it is not about being right or wrong (and in fact, he does not care a hoot whether he is right or wrong), but it is about how much he makes when he is right and how much he loses when he is wrong, will be a wildy successful trader.
IMHO the difference between mediocrity and greatness in trading comes down to emotional discipline/control, patience and a balanced constitution for risk. However, there is certain knowlege that is required to be known, and the trader can either acquire that knowledge through observation or from other traders. This is not one piece of knowledge, there are several of them. I have picked up enough of them (mainly through observation) to do fairly well most of the time, however, I know there are more that I need to acquire. Case in point, the Turtles. The ones that had the right psychology, when given the right knowlege made millions. Would they have gotten that far if they had had to acquire that knowlege on their own? Doubt it.
Just in case Handle's response is overlooked: QUOTE=Handle123 Someone who can take losses well ? NEVER, frustrating, I don't see myself losing. Someone who can take big risks at the right time ? NEVER, big risks equates to lack of education Someone who can reverse positions on a dime ? YES, if signal to do so Someone who is just right at calling market direction seemingly all the time ? Horrible, but excellent taking signals Someone who has perfect emotional control ? Control yes but identify what emotions are screaming to me is usually wrong Someone who is tenacious, never letting anything affect them ? Tunnel vision when I trade Someone who is great with numbers/maths ? Majored in Accounting/Pro-Gambler long ago Football/Baseball/Basketball/Hockey/Horses/Blackjack understanding odds/risk Someone who is a pscychopath and only cares about making money in the markets ? MOST are doing time in the big house, think all eventually get caught. I concentrate on risk and probabilities.
I think a good trader has three qualities: 1. They are intelligent and knowledgable : that is they can understand the issues at hand. For a stat arb trader that could be understanding math; a biotech long short trader, understanding the medical science; macro trader, understanding current economics; fundamental trader, understanding accounting and business. 2. They have the ability to take risk. 3. Wisdom : they are able to process the information they obtained from #1 and come to the right conclusions. This is the hardest trait for people to identify because if you have it you know you have it through positive feedback and if you don't you lack the skill to recognize the negative feedback. Look at all the great traders/investors. They have all these three traits.
That's someone of the 80s or 90s generation asking...too lazy to do a simple search on this site and rtff. This topic has been debated on this site ad absurdum. So, definitely thinking in simple, logical terms is one of the many ingredients. Call it "Unconscious competence" ;-) And funny how almost every participant in this particular thread seems to be banking good coin by self proclamation. Apparently this site is full of trading wizards. Something at ET never changes. Lmfao.
They might all have these traits, but they might all also have brown hair. (Forgive the flippancy) Knowledge, ability, and wisdom are indeed important. But beginning and not-so-beginning traders think that they can acquire this knowledge and ability and wisdom without ever studying and characterizing their markets. Thus they continue to fail. But rather than seek the reasons for their failure, they just continue making the same mistakes with increased fervor, insisting to themselves (and others) that it will all work out in the end. It won't.