Tuesday, January 29, 2008

Expert Traders

Brett Steenbarger’s TraderFeed blog is a superb resource for data-driven market analysis as well as a review of many of the important psychological aspects of trading.

I found two recent posts and a promised next installment on trader performance to be particularly insightful. In How Common Is Elite Talent Among Day Traders? Brett cited a study which determined that 80% of day traders lose money. In today’s follow-up, What Makes an Expert? Three Surprising Research Conclusions, Brett concludes that repeatable success can best be attributed to those traders who essentially develop what I would call a closed-loop feedback system and strive for continuous improvement.

The bottom line is that superior trading is not the result of intelligence, tools or a holy grail setup. Instead, top performance is the result of the efforts of those who do the best job of developing and applying a process that takes maximum advantage of experience and learning opportunities to develop and refine one’s edge. In Brett’s words, it’s all about a “structured learning process.” Brett has promised that he will offer up his thinking on what sort of structured learning process would be ideal for traders and when he does, I will be quick to weigh in with my thoughts.

1 comments:

Ben Bittrolff said...

Make sure you're sitting down before you fire up these charts.
Really Scary Fed Charts, Why Bernanke Will Cut Furiously

TheFinancialNinja

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