Stock trading is a learned skill. Having passion for the markets is most important. But I believe there are other traits that are vital for achieving trading success:
Loner / Corporate Misfit
Trading is a lonely endeavor. It’s you against the world. Good traders don’t submit well to authority. To them the only authority is the market, which is always right. Qualities that are indispensable in a corporate career – team building, consensus seeking, loyalty and conformity – will only hamper your trading. To pick stocks and stay ahead of the crowd, you must be an independent thinker capable of reaching decisions fast without complete information, and acting on them. Nobody on Wall Street ever opens their mouth without benefiting themselves. If you need to be told what to do, you may be good corporate material but will fail as a trader.
Discipline and Responsibility
In trading you are always on your own. But a good trading system must shall have structure and discipline that you must follow daily and weekly.
You must also assume total responsibility for your actions. Blaming your advisor, the market makers, or Jim Cramer will not get you anywhere and will only compound your losses. The only right thing to do when you realize you made a mistake is to correct it, learn from it, and move on.
Humility and Flexibility
Trading is a never ending quest. Nobody knows it all. The market is a level playing field that has a remarkable ability to humble the arrogant. It does not care what you think or whether you have a PhD. It is always right. The only time you are right is when you are making money. Pride of opinion and arguing with the market will only compound your losses.
Trading involves acting on incomplete information. The flip side of discipline and responsibility is flexibility. You must be able to change your opinions and reverse your positions fast.
In the end, it’s not the stock that makes you money – it’s what you do with it. Emotions are a trader’s worst enemy. Most things in the market are counter-intuitive. You must learn how to control your emotions through poise and detachment. You have to take responsibility for your actions without taking losses and setbacks personally. The market is not out there to get you; it does not even know that you exist.
Thick Skin and Perseverance
Markets can be brutal and manipulative. If you can’t take the heat you won’t last long. What do you care what anybody thinks? Your goal is to make money – pure and simple.