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.


Ben Bittrolff said...

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


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