The Truth about Trading Success

Asad Dossani
A decade ago, I read my first book on trading. The advice was deceptively simple. Traders fail because they lack discipline. And to succeed, they need is a healthy dose of self-control.

It turns out that this advice is useless. Sure, discipline is important. But discipline alone is not going to make you money. In other words, discipline may be necessary for success, but it is far from sufficient.

Most of us are more disciplined than we give ourselves credit for. For example, day in and day out, we wake up early and go to work. Most of the time, we successfully resist the temptation to sleep in. We do this because we know that arriving to work late has negative consequences.

If discipline were all that mattered, we'd all be successful traders. But we aren't. In fact, the vast majority of new traders fail. I did. My first trading account lost one-third of its value before I quit.

But I got back in the game soon afterwards. And my goal was to learn what actually matters for success.

What matters is a profitable trading strategy.

The most successful traders are those with the most profitable trading strategies. They're not the most disciplined, nor do they tend to follow the crowd. Usually, they possess some unique skill or advantage in predicting future market movements.

For me, this skill is data analysis. I analyse large historical datasets to find hidden patterns in market prices. Typically, I work with very high frequency data (prices sampled every minute). For example, one year of historical data for one asset consists of 600,000 data points.

You need more than just Excel to work with this level of data. To analyse such data, I write programs in Python, a general purpose programming language. Then I create custom indicators and strategies that you can't find anywhere else.

Most traders don't do this level of analysis. And that gives me an edge in the marketplace. To become a successful trader, you need to find this edge. You need a strategy that works.

How can you get there? Unfortunately, this is easier said than done. It takes time to reach this level. My journey is closing in on a decade.

The good news is that you don't need to take such a long journey. Instead, you can make use of mine. And you'll become a successful trader much faster than I did.

I sometimes wish I hadn't read that first book. I came out thinking that trading was easy. That a simple shift in mindset would assure me success. Hopefully I have convinced you that the truth is never that simple.

Do you want to learn to trade? Let us know in the club or share your comments here.

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2 Responses to "The Truth about Trading Success"
KD
20 Jun, 2016
Whether it is trading, investments or business, the most important indicator of success is emotional quotient (EQ). It took me long time before I realized it. Most of pan shop owners earns much more than experienced engineers. When you go to their shop they will know your name, family history and your hobbies / interests. They will be always in good mood and smiling. Like (1)
Jayendra
11 Jun, 2016
Dear Asad, its nice that you have found your Edge for Trading. As you have rightly said, Every one has to Fing One's Own Edge! Its like Nirwana! You cannot use others! Like 
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