I’ve been meaning to revisit a post by Doc Brett Steenbarger on the 5 defining features of "Market Pros," and the long holiday weekend is as good a time as any.
The Doc notes that these "five
features stand out. Pretty much everything else follows from these five:"
The less successful traders are anticipating market movement and
trading accordingly. The highly successful traders are identifying
asset class mispricings and trading off those.
2) The less successful traders are trading particular instruments
and pretty much stick to those. The highly successful traders recognize
that any combination of trading instruments can be considered an asset
class and appropriately priced (and gauged for mispricing).
3) The less successful traders think of their market as *the*
market. The highly successful traders focus on interrelationships among
markets that cut across nationalities and asset classes.
4) The highly successful traders place just as much emphasis on
understanding markets as predicting them. The less successful traders
don’t ask "why" questions.
5) The less successful traders are convinced they have proprietary
information of value that they must not disclose to anyone. The highly
successful traders use their proprietary information to selectively
share with other highly successful participants, thereby gaining a
large informational edge.
The other interesting observation was a new phrase he coined: "analytical creativity."
Good stuff, Doc.