The Best Traders I know Do These Things

Feb 16, 2020

It's been a while since I talked about this, but let’s get back to it


It is useful for traders to see what successful traders focus on vs what they think or more importantly what someone else wants them to think is important


The best traders I know cont’d


A thread...


I’ve covered this a number of times before in my tweet storms


My weed smoking polymath trader friend who collected degrees before he dropped out of his doctoral program to trade full time


The former attorney woman who blew up her first 100k account only to refund it with 5k of credit cards and running it up over a couple million in a year here


Give them a read


Today instead of profiling a specific trader that is successful and doing things differently


I’m going to look at a bunch of other traders who I respect


And a number of clues that they show with their actions


First things first #crypto


The majority of “traditional” market folks really hate/hated on crypto during that 2017 parabolic blast off


But the best traders I know were really hammering it in the crypto trading space


People like @Vantharp @ScottPhillips and @Albrooks


These are not people who make money by going on TV or writing articles and raising capital for their funds or their research services, these are traders with real skin in the game, eating what they kill


I consider them amongst the best in the business


Even today crypto is still hated and misunderstood by the very same people who scream into Twitter everyday about the Fed printing money and “the old wall”

Next getting caught up in Bear Porn smack dab in the middle of a bull market


A lot of the big noise makers in the markets lived through the Global Financial Crisis and are still stuck in that era


Convincing themselves and everyone who follow them that the world is on the brink of disaster, day after day, week after week, month after month, year after year


While the best traders I know have been buying dips and buying breakouts as markets roar higher


In fact even some of the most novice unskilled in markets are doing the same thing, the easiest market to trade is a bull market


It takes a high level of ignorance to lose money by shorting a bull market


The thing about perma-bears is that they are very intelligent people and believe they are seeing things that no one else sees, a la the Big Short


So everytime something strange emerges, Repo Rates, Fed printing money, Buy Backs, Virus, or anything that can be charted and over layed on a 2007-2009 chart


They get up in arms, and write something for Zero Hedge or get invited on to Bloomberg (not CNBC because they are just perma bulls and blah blah blah)


Back in December I wrote about this bull market NOT being the longest bull market in history and showed my work here


A connoisseur of Bear Porn will find 10,000 ways to try and convince me that the quantitative data showing it isn’t the longest bull market in history and in fact less than a year old in what could be a much longer bull market than anyone expects


Which doesn’t matter!!!


All that matters is making money


That is your job as a trader, that is all

Not changing your mind


The best traders I know make a call on market direction, share their research, show their work, then change on a dime when they get new BETTER insight


This one is hard for almost everyone


People ask me all the time questions desiring absolute answers that never change


“Do you ever look at this indicator?” No


Then one day when I’m doing my daily backtest work and I want  to test an idea that’s out of the blue I might just go and look at that indicator and build a system around it


“Do you ever trade anything less than 5 minute candles?” No


Then I go out and build a 3 minute scalping system


“Do think the market still has room to run higher from here?” Yes


Then the market prints a top reversal pattern and then I start shorting

The best traders I know are more than fine being wrong and making changes to correct that once they realize they are wrong


The best traders are always improving

And one of the most common characteristic of the best traders


They understand what the hard work to become good is and they do it

Doing a massive backtest, manually, bar by bar, collecting 1,000’s of trades over years across different asset classes, different market regimes


They know their statistics inside and out


They never just “wing it” rather they have a repeatable process for everything so that they can monitor themselves and identify if something is not working and find new places to improve


Here’s what I use

And one of the most interesting characteristic that I’ve discovered of some of the best traders I know


They happily share their knowledge about trading


Because it makes them better to teach or get asked things that they get to think through and learn from


Because seeing people doing the wrong things over and over is utterly frustrating and it is their mission to help traders become profitable


And they are really good people

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