By now you all must have understood various personality traits of a trader. Today I am touching very different approach of which most of the people do not talk about . Luck…. you heard me right. Luck Focused Traders (LFT). This is a topic where there is no logic and a man on the street don’t know about the science behind it. There is no measurement for luck. One cant say I have 100 kg of luck, or length of my luck is 300 meters or my luck is worth $100 mn. ( I too don’t know). But traders are dependent on it. Sometimes to a greater extent. In case of Casino or Cards games it may sound good. But in Share Trading if you rely on nothing but Luck, sounds weird. There are various systems which are time tested, many scientific approaches, many mathematical and statistical evidences to sharpen your skill as well as prove your mettle. Those who use it are called as Skill Focused Traders (SFT).
There are numerous personality traits of both type of the traders. We will look at them one by one hereafter.
What does a Luck Focused Trader do :
- LFT selects stocks which makes money for him or the lucky stocks.
- LFT feels happy rather LUCKY when makes money and feels down when they don’t.
- LFT get some kick of whatever they are trading and once in a while they make a good buck and feels lucky. Its just their timing coincided with right entry into a stock also a right exit when they booked out.
- Other times they keep on trying their luck and burn their fingers.
- LFT’s have big Ego, emotion about their trades where sometimes they takes big drawdowns, because they feel its their luck which will bring them out of a wrong trade.
- Even if they lose they blame it to Luck because it was not their luck to make money on a stock. It was an unlucky day or whatever.
- Let me tell you in simple they do not have a system to chose what to trade, why to trade, when to get in and when to get out.
- LFT do not know which is a good trade, what is winning trade, and what is not.
Now lets see what do the Skill Focused Traders do :
- SFTs use their skill to study markets and keep on sharpening their saw.
- SFTs give regular time to study both fundamental & technical trades.
- SFTs depend on their certain predefined parameters and constantly use them to select what to trade, why to trade, when to get in and when to get out.
- Their system is based on mathematical and statistical data which gives them input and helps them make them better decisions.
- SFT uses the systems which make them know what is the risk they are taking before they actually take the risk.
- SFTs have systems which can give them a clear cut idea about which is a good trade, winning trade and which is not.
In a nutshell, LFTs are random non process driven, anxious and unorganised Traders. They, depend on such a invisible system where they have no control on it. Vis-a-vis a SFT is a trader who has visible system to guide, use it, define a process and make good decision making. Because a Trader can make good decision making and that is the only thing he can control. There are emotions which often drive the decision making which I have spoke in my last blog.
Questions to ask yourself :
- What kind of a Trader I am ?
- Do I have A system which can help me make better decisions?
- Am I also trading randomly sometimes and finally blame to luck for whatever I Get in the end ?
Comment here about your insights.
Isn’t it amazing.
“There is no secret to success, It is the result of Preparation and learning from failure” _Colin Powell
Be a Wealthy Trader…