Conversations with Top Traders
First, a little background on the book is in order. As the title implies, the book is a series of transcripts of interviews with some of the most successful traders of modern markets. Since these are the people who have amassed enormous profits with their trading activities, we all should be at least a little curious about how they perform their craft.
All of the interviews were open-ended, but there were some common elements that kept coming up in nearly all of the conversations:
1) Above all else, maintain discipline. This usually was the summation of a risk management question. Nearly all of these traders agreed that the number one mistake they saw (especially in new traders) was an unwillingness to let go of a bad trade. The secret to their success was discipline, or as one of the interviewees said, "I would rather have a mediocre strategy and a good money management system than a good strategy and a mediocre money management system."
2) Focus on good trading rather than making money. If you can do the former, the latter will occur naturally. If on the other hand you focus on making money, you'll lose your focus on the good trading that leads to profitability. Ironic, isn't it? In fact, many of the traders regarded trading as a game of sorts.
3) You must have a passion for the market. These top traders would have chosen the same profession even without all of the financial rewards. Their passion drove them to persevere, even when most others would have quit. Their love of markets kept them in the game for a long time, and with time comes wisdom and experience. That experience was their edge.
4) You must have humility. Trading is one of the only professions where failure can be expected about half of the time. All of these traders can deal with a bad trade; humility allows them to exit before that bad trade gets worse. Since your ego is a trading pitfall, you must park your ego at the door, and you must have the uncanny ability to not dwell on bad trades.
Marder's and Dupee's 'The Best Conversations With Top Traders' is a good read for the trader who is ready to take their activity to the next level. And, there are plenty more of these helpful ideas like the ones above. You may even want to read it twice, to make sure you get them all.
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