I’d like to dedicate this page to the All-Star Traders here at Warrior Trading. These are traders who have provided substantiation of trading profits, with a handful making over $1 million trading.
As always, we want to be mindful about these claims and that their results are not typical. Since we do not track typical result of our members, we cannot say our members are more or less likely to profit versus traders as a whole.
Having said that, these All-Star traders are among the most successful traders who have ever been part of the Warrior Trading community.
Over the years, I’ve sat down with many of these members to better understand their strategy and their journey.
Some participated in formal interviews that are part of chapter 17 of the Small Cap Course in our Warrior Pro Program, while others have just chatted with me during a seminar that I hosted in person.
I’d like to discuss a few of the similarities among the members and hint at what I think may be natural attitudes and attributes that have set them apart from the rest.
Extremely Driven, Competitive and Aggressive
Each of our all-star traders display personalities consistent with being competitive, aggressive and extremely driven.
While it’s certainly possible to possess these attributes and not be successful as a trader, I think in the case of these traders, a willingness to take risk and be aggressive is a major contribution to why they were able to scale their strategies all the way to 7 figures.
One big challenge after learning to day trade is, after finding some moderate success, having the tolerance to risk what you’ve already made in exchange for the opportunity to take your strategy to the next level.
For instance, I found in my own trading that making $200, $300 and $500 a day has been fairly consistent if I focus on base hits with one entry and one exit.
However, to get to $1,000, $2,000, $5,000 or even $10,000 a day, it often comes at a sacrifice because, instead of taking the base hit, I roll that into what I think is going to be a bigger trade.
If I’m right, I have a big green day; if I’m wrong, I could close the day flat or even red. On the days that I close red, it feels as though my drive to push harder came with the cost of a smaller but perhaps more consistent gain.
I have met traders who have become relatively content with smaller gains and don’t have the desire or the risk tolerance to attempt to scale up their strategy.
Sometimes, scaling up a strategy also requires making changes to the tools you’re using such as switching to a broker designed for professional traders that uses more expensive tools. For some, that increases the pressure since it increases the cost, and under that additional pressure, they do not thrive.
I have found that putting too much pressure on myself causes me to become more emotionally-activated during my trading, resulting in bigger profit and loss swings that have not necessarily been positive for my career.
Perfectionist
In trading, being a perfectionist most often means having a drive to improve. You see people who have done better, and you know that you’re capable of doing better yourself, so you push yourself again and again, harder and harder to try to achieve better results.
This again can create a lot of pressure, and there are people who have the perfectionist personality trait that find themselves spinning their wheels, starting and stopping, and unable to complete projects or endeavors since their perfectionist behavior forces them to continually start over.
In my case and in the case of several of our All-Star Traders, perfectionism can be harnessed as the drive to compete at a higher level and to capture the most of each opportunity.
I believe that every trading day is like a puzzle and and an opportunity to do better. It would be almost impossible to solve the puzzle perfectly though, since there is often better entries and exits that could have happened, or a larger share size for a profitable trade, and there’s always going be someone who did better than you.
But because each day provides the opportunity to solve the puzzle better than the day before, I find myself driven and stimulated to improve. When I do have periods of struggle, it’s been really important that I work to fix it.
I try to figure out what’s broken and I try to make it right. I’m willing to go back to the drawing board if I have to.
Having tasted the fruit of a successful strategy, when I struggle or am in a bit of a drawdown, I am motivated to try to figure out what I can do to get back on track. The market is not constant; it’s always changing. However, what is pretty consistent are the patterns of the market.
In developing a memory of patterns and cycles, an internal archive of market action begins to form, presenting the opportunity to capitalize on these reoccurring cycles, trends, and patterns that we see again and again and again.
Multiple Sources of Income
The majority of our all-star traders began trading from a place of comfort.
By learning from a place of desperation (such as not having additional sources of income, having a small amount of money that is dwindling, and / or relying exclusively on trading success to potentially solve your problems, turn your life around, save your marriage, etc.), you position yourself in a pressure cooker.
In these cases, the stakes are already extremely high and only get higher the longer you trade without turning a profit.
While it’s certainly true that some people will thrive with high stakes and high pressure, most will find that it fuels emotionally-activated trading which then results in poor decision making and unnecessary, potentially detrimental mistakes. This is how traders blow up accounts.
The all-star traders who come into the market with consistent sources of income or savings to live off of while they learn are able to learn about the market from a position of genuine curiosity and interest. Each day they’re in the market they gain a little more experience, and they are able to absorb new information without unnecessary pressures.
From their perspective, if it takes 2, 3, 4, 5 years or more before they generate any significant gains, that’s fine because, in the meantime, they learned more about the market without a sense of urgency about having to perform right away.
At the end of the day, it’s true that nobody wants to be active in the markets for 3 to 5 years without having anything to show for it. But at the same time, coming to the market from a genuine place of curiosity leaves room to learn a tremendous amount in those first few years. That in turn creates motivation to keep learning more.
Computer Savvy
One things that I think made me especially well-equipped to learn to trade was my computer skills.
Growing up, I had a strong interest in computers, and I was fortunate enough to have the resources to learn about computers. Installing trading software, customizing software, and creating custom hotkeys were not only easy for me but actually a very enjoyable part of the process.
I never want to feel that I am the bottleneck between me and the market. Part of my success is a result of quick typing skills and an ability to harness a computer as an extension of my body just as a carpenter harnesses a saw as an extension of theirs in order to create a beautiful piece of furniture.
Wanting to immediately sell a stock and take profit but not knowing how to enter the order before profits disappear can be a devastated feeling.
I do think it’s true that a certain level of equipment is required to trade. However, internet speed or computer power aren’t necessarily deal breakers when it comes to making money consistently.
Quick Decision-Makers
Being quick on the computer goes hand-in-hand with being able to make quick decisions and having good hand-eye coordination. Growing up in an era of video games, I feel that I was training from a young age to be a day trader by practicing quick decisions, committing to those decisions, seeing through the result, and being willing to start over and try again.
I think that, at a certain level of skill and experience, trading can become very much driven by intuition, though in the moment it can be difficult to decipher intuition versus impulse. I’ve witnessed, both in my own trading and in that of our All-Star Traders, that often we can be so quick that it’s impulsive—perhaps a good impulse if it’s a winner and not so good if it’s a loser.
I sometimes find that I make decisions so quickly that I need to actually slow myself down to think a little bit more before I pull the trigger. I’ve found it’s easier for an overly aggressive trader to slow down than it is for a trader who is afraid of taking risk to speed up.
Two of my challenges have always been slowing myself down to prevent myself from chronic overtrading, and knowing when to walk away.
Knowing When to Walk Away
Traders have to know when to “call it a day” and walk away. Many beginner traders who struggle find that if they make a little bit in the morning they often give it back mid-day, perhaps make a little more in the afternoon and then lose it before the end of the day.
The only people who make money on overtrading are brokers. As day traders, we have to be very disciplined about knowing when to take our money off the table and walk away. I’ve created a set of rules that dictate when I walk away, and I’ve noticed a common trait of many of our All-Star Traders is that they have a similar set of rules.
Having these types of rules take the emotion out of the decision since you’re simply following the rules that you already laid out for yourself.
Discipline & Patience to Follow the Rules
Hands-down one of the biggest attributes of an all-star trader is having the discipline and patience to follow the rules of their strategy.
An all-star trader knows what works for them. They know what produces profit, and they know how to lean hard against their winners to scale their strategy. And since they know what works so well invariably, they know what doesn’t work and they know when to step away.
It doesn’t mean that they don’t have losses (and sometimes very big losses). It doesn’t mean that they never get emotionally activated and make a poor decision. But it does mean that, over a long period, they know how to keep themselves green.
Two attributes of an all-star trader than can conflict are: the willingness to be aggressive and take a lot of risk, and the discipline to walk away when the rules of their strategy say so.
I find that, on each individual day, I can get so hyper-focused on achieving perfection and hitting a new record that I can lose sight of the overarching rules of my strategy about when to stop, when to slow down, and when to accept a loss.
And the fact is that the biggest green day I ever had started by getting knocked down below my max loss; this resulted, however, in me aggressively break my max-loss rule, jumping on an opportunity, and ultimately finding myself green by nearly $500,000.
Sometimes getting knocked down is what stimulates the aggression to trade really well; other times that aggression is not appropriate and will result in extending the losses. Finding a flow state where you can actually trust yourself to make a decision and consistently come out on top is the goal for any trader.
A “flow state” isn’t a state of trading that is without rules. Rather, it’s a state of trading where you trust yourself to moderate your decision making and where you trust that the outcomes will be good.
Traders who chronically overtrade, give in to FOMO, and take emotionally-impulsive trades, suffer from a lack of discipline.
Wrapping Up
While it’s true that Warrior Trading’s All-Star Traders share many of the same positive attributes, it’s also true that each trader has their own path and their own strategy that ultimately reflects their own risk tolerance and personality.
While it might be said that many trade a strategy similar to mine, another way to phrase it is that I trade a strategy similar to many. I trade momentum. It’s a simple interpretation to say I buy high and sell higher; ultimately that’s what momentum traders do.
This strategy is far from new. In fact, this is a strategy that is as old as the market itself.
In the older days, this might be known as tape-reading and jumping on the waves of buying. Since momentum trading has been around as long as the market, I have faith that it will continue to exist for as long as there are equity markets to trade in.
I sometimes find myself dealing with stress cycles between hot and cold streaks, and one of the reasons that I have that stress is because I am really driven to trade as aggressively as possible.
I hope someday to be able to reduce the stress by reducing the pressure I put on myself. This would require willingness to be less competitive, less aggressive, and less of a perfectionist.
It’s hard to turn my back on these attributes that have contributed to my success. So, in the meantime, I continue to put the pedal to the metal when the hot market’s hot, and try to slow down before taking big losses when it cools off.