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As the founder and CEO of Bear Bull Traders and Peak Capital Trading, I’ve taught thousands of new traders how to trade the market and make the right decisions for their trading venture. These traders come from all walks of life and from countries all around the globe. I’m honored to bring such a diverse group of people together for the purpose of building better lives through trading.
During my time as a trading coach and mentor, I’ve seen it again and again – some just have a knack for trading, and some fail miserably … and fast. What makes the difference? Successful traders enter into the world of trading with a specific set of personality characteristics. As I’ve built my own businesses, I’ve discovered that these are the same characteristics that also drive successful entrepreneurs.
How will you fare trading from your home office? How will you fare operating a small business? Read along and see for yourself if you have these five characteristics common to both successful traders and entrepreneurs. (And if you don’t, don’t worry. They can all be learned.)
1. They like to solve puzzles
“Blessed are the curious, for they shall have adventures.” — Lovelle Drachman
Good traders can’t resist a mystery. They’re driven by the deep-seated need to figure things out. If you took apart your toys as a kid to see how they worked, you might very well have a future in trading.
Learning to properly analyze the market, spot its patterns and find clues regarding what’s about to happen are the keys to making effective trades. We do that by gaining experience and gathering data, and then applying that data and experience to new scenarios. If you don’t have an innate passion to keep working on your mental Rubik’s cube, you’re not going to make it as a trader.
Entrepreneurs have the same approach. They see a problem in the market – a product not being offered, an audience not being sold to – and they find a way to fill that gap. Great entrepreneurs are always looking for new ways to serve their clients. Just look at Elon Musk – from PayPal to Tesla to SpaceX. He never stops wanting to solve puzzles.
2. They enjoy analysis games like poker
Not knowing what your opponent is holding can be devastating, or exciting, depending on the way your mind works. If you’re the kind of person who can’t stand the uncertainty of not knowing everything there is to know about a given situation, trading isn’t for you. Neither is entrepreneurship.
Being able to confidently take calculated risks is a huge part of becoming a successful trader or entrepreneur. You never know for sure what the market is going to do next — whether it be the international stock markets or your own local marketplace economy. Maybe down the street, someone will open a business just like yours. That’s a risk you must be willing to take if you want to be an entrepreneur. Maybe tomorrow, the stock you bought today will crash. That’s a risk you must be willing to take if you want to be a great trader.
It’s not gambling if your risks are calculated. Good poker players only play solid hands with a high chance of winning. The same goes for good traders and successful entrepreneurs. If you play every hand you’re dealt, you’re going to lose. But if you hold out and only take carefully calculated risks, the odds are in your favor to pull off an amazing win.
In the same vein, I’ve noticed another group of calculated risk-takers who make excellent traders – mountain climbers and extreme sports enthusiasts. These are folks who can tolerate risk and plan for it accordingly … while at the same time loving the adventure.
3. They’re (surprisingly) not overly competitive
Ever seen two idiots in a bar fight? Did either of them look like Patrick Swayze in Road House? Of course not. They looked like two morons who were so concerned about winning that they both lost.
The best traders aren’t overly competitive. They don’t let their egos lead them into dark alleys. The market is a powerful opponent. If you try to beat it, it will eat your lunch.
People think that trading is a battle against other traders and the market. Not true. Trading is a battle against your own ego and emotions. If you lose your cool, you start making mistakes. James Bond would have made a good trader. Those screaming pundits you see on news channels – probably not.
Both entrepreneurs and traders have to be able to keep a cool head under pressure so they don’t make decisions — and mistakes — based on a temporary emotional state.
The most dangerous notion in trading is that “I’m gonna prove the market wrong.” You are never, ever going to “beat the market.” It is the ocean. You are the boat. A trend is your friend. Ride the right wave and you’ll get where you’re going.
4. They don’t take things personally
In my personal experience, women make better traders than men, even though there are fewer female traders in general (which is something Bear Bull Traders is working hard to change). Here’s why:
Our in-house psychologist, Dr. Jonathan Katz, believes that not taking things personally is what makes women better traders than men. As a group, our female traders seem to have the natural ability to separate themselves from their trading failures. This keeps their confidence up and their decision-making skills unencumbered by negative emotions. When they lose on a trade, it’s just a trade – not an assessment of their self-worth. They get back up and continue to move forward.
As a man, I know men can have a tendency to equate a professional failure with personal inadequacy. I’ve seen so many male traders have the wind completely knocked out of them when they flub a trade. Some will rage, some will go dark for a while, and others will come back harder – losing even more because they’re not in the right headspace. Their egos are pushing them to somehow defend their honor by bull riding through their next trades as they try to recoup their losses (with usually terrible results).
Every trader loses now and then. Every entrepreneur suffers the occasional setback. If you let every hitch take you down, you’re not going to make it. In fact, this is good advice for life itself – you can’t let every failure define you as a person. Get up. Dust yourself off. Learn your lesson. And do better the next time.
5. They’re bursting with passion
When I look at the best traders in our community, I see a theme – passion. They’re passionate about their sports teams, their families, the books they read, the school they went to. They’ve got a lust for life that defines how they live their everyday lives.
It takes passion to stick with anything hard. Trading is hard. Entrepreneurship is hard. These things don’t come easily to people. They both take a never-ending commitment to education, adaptation, and living with uncertainty. Passionate people are driven to keep going because their excitement won’t let them stop. And perseverance is the No. 1 indicator of success.
But what if I’m not all of those things?
“To improve is to change; to be perfect is to change often.” — Winston Churchill
If you don’t tick off every box on this list, don’t worry. These are all traits that you can develop. That’s the great thing about human beings – we are infinitely adaptable. Now that you know what you need in order to be a great trader or entrepreneur, here’s your first step. Figure out what you already have, and where you’re lacking. Then go out and find a coach that can help you strengthen the places where you’re weaker. For example, our new and experienced traders at Bear Bull Traders which is a worldwide community of passionate traders are coming together every day to learn, grow, mentor, and support each other on our journey to trading entrepreneurship.