Philosophy of Trading Success
I believe a successful trader possesses all the following qualities. Lacking any one of these will not make a successful trader.
* Willing to take risk. You never learn how to swim by just watching or reading how others swim. Trading career carries huge risk. If you are not willing to take risk, or your health and family situation does not allow you to take such risk, you will not likely be successful in trading. Risk taking is a personality. Some people may just not have it.
* Perseverance. I don't believe anyone is a successful trader by birth. Like any career, trading needs long time of training and experience to be good at. Before achieving success or finding a trading method that is suitable for you, you are almost certain to encounter many failures and frustrations. You could be wiped out several times before you become successful. Most people will give up after a couple of failures or wipeouts. Like any entrepreneur, a successful trader has to learn from mistakes but never give up trying again and again.
* Experience or wisdom. Wisdom comes from experience. Trading skill is not something that one can learn in a short time. Economy and financial markets are very complicated. It is driven by both fundamental and technical or emotional factors. Not only you have to learn from historical market events and from the experience of other traders, you also have to learn from your own successful trades and failed trades. I would think a normal learning curve with good coaching is about 3-5 years. Without good coaching, it could take 5-10 years. Most people have to learn on their own without good coaching as most successful traders are not willing or have no time to coach other people. Successful traders are either too busy to make money on their own or too busy to enjoy their fruit of labor by pursuing all kinds of leisure activities.
* Intelligence. Without some form of intelligence, no one can be a successful trader. The intelligence required for trading may not be rocket science type but it should include some good education, common sense, and intellectual curiosity.
Even if you believe you possess all the qualities above like many people who have tried trading as a career, you should know that, even with 100% of your effort, success rate for a trading career is probably less than 0.1%, much lower than any other careers. Society simply cannot afford to have too many people doing nothing but sitting in front of computers doing trading. Most people have to perform services for other people to make a living in one way or the other. Trading, like art, is a luxury career supported by services provided by others.
READING LIST
The following books are considered must-read for anyone who wants to understand and learn global macro trading. First list of books require careful reading and thinking. The second list is for general reference only.
Books for In-Depth Reading
1.
Soros by Robert Slater
2.The Alchemy of Finance by George Soros
3.Anatomy of the Bear by Russell Napier
4.Secrets of the Temple by William Greider
5.Mastro: Greenspan’s Fed and the American Boom by Bob Woodward
6.The Great Crash 1929 by John Kenneth Galbraith
7.Lesson from the Great Depression by Peter Temin
8.Manias, Panics, and Crashes by Charles Kindlerberger and Robert Aliber
9.Black Monday by Tim Metz
10.Inside of the House of Money by Steven Drobny
11.When Genius Failed by Roger Lowenstein
12.Reminiscences of a Stock Operator by Edwin Lefevre and Roger Lowenstein
13.Market Wizards: Interviews with Top Traders by Jack Schwager
Reference Books
1.A History of Interest Rates by Sidney Homer and Richard Sylla
2.A History of the Federal Reserve Volume I by Allan Meltzer
3.The Great Depression Ahead by Harry Dent
4.Buffett: the Making of an American Capitalist by Roger Lowenstein
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