I have often stated that trading markets is gambling, and it is, but I have also often thought about what makes some gamblers more successful at their game (whatever that is) than others. What characteristics define those players who defy the odds and return to the final table in major poker tournaments? Better yet, what characteristics define traders who consistently end up on the winning side of trades?

It is more difficult to get through 7,000 players to reach the final table of a poker tournament than it is to make a winning trade, but I will never suggest that consistently winning in the markets is easy. For starters, trading is far more difficult than playing poker on a technical level. Nevertheless, I believe the fundamental characteristics that define successful players in both worlds are the same.

Winning at poker requires opportunistic aggression softened with unwavering patience.

The above statement applies to trading as well. Think about it. Successful trading is about finding opportunity and then aggressively pursuing it. To do this, one must have unwavering patience. Every potential trade is not necessarily a good trade, just as every AA (pocket aces) is not necessarily a winning hand. Sometimes you have to toss in your cards no matter how “good” they seem at that moment. You have to wait for that moment of opportunity. When it comes, it may not be pocket aces. In fact, it might be 3,5 off suit. It simply depends on the table situation at that moment, and a good player that has waited for that moment of opportunity, without losing a bunch of chips, then applies opportunistic aggression. Traders need to do the same.

Winning at poker requires making good choices.

Trading and poker are about making good choices, such as when to get in and when to get out, how much to risk on a single bet or in a single trade, or, how far to push what you think is a winning hand or a winning trade.

Successful traders, like successful poker players, know how to identify and maximize opportunity. Conversely, successful traders, like successful poker players, know when to fold their hands, or, if you prefer, minimizing their losses.  

In the end, it is about acquiring the maximum amount of chips you can in any one hand for a poker player, and, for a trader, it is about acquiring the maximum amount of dollars on any one trade. In both cases, the winners are patient, opportunistic, and imbued with a certain aggressive trait. In each case, the winners make good choices based on experience, knowledge, and finely-tuned intuition.


So what characteristics make a successful trader?

Ed from Trader town


You tell me. Let me know our thoughts on this …

Trade in the day; invest in your life …

Trader Ed