Three Predictors for Being More Successful

Trader's Mindset

Sep 12

There are 3 predictors I have noticed for being more successful at trading, and what you can do to take advantage of them:

  1. Traders who are being more successful do more of what works and do a better job of tracking it. They work to improve but do not seek try to obtain impossible perfection. It doesn’t matter if they are using discretionary or quantitative methods. You can do this better by tracking your results and recognizing what is working for you.
  2. Traders who are being more successful stay engaged in markets. Traders who are less successful do not seem to find markets as inherently captivating. You can find ways to approach markets in ways that are captivating– such as trading on the sim or e-micro to help facilitate your development of system trading ideas.
  3. Traders who are being more successful adopt a broad view toward opportunity in the market and find creative ways for structuring their trades. Traders who are being more successful specialize but do not over specialize. Less successful traders take too narrow view of market opportunity. You can do more of this by learning more products and time frames.

    This over focus and specialization for most traders tends to fall into either (1) focus on scalping with narrow rule set and/or (2) developing the perfect strategy.

    There is a need to develop efficiency. You can become efficient by giving yourself hard deadlines for testing your trading systems or trying discretionary methods, have flexibility to try methods and move on or adapt them.

    As for improving with the goal of scalping, most traders fail when they over restrict themselves. It is another reason I do not recommend tryouts because the rules are super restrictive. For example, if you are trying to scalp with 6 tick stop loss but keep getting stopped out of good trades then learning from that and adapting the method makes more sense then continuing down a losing path.

    In fact, I have did that often where I manage to time the low or high of a major moves but was trying to scalp with too tight of a stop loss. The point is to learn and adapt. The E-Micros make that especially possible today.

    Let’s talk about variation. Many know that I am an avid tape reader but when people learn that they assumed it meant scalping. It does not have to mean that. I could trade special situations or events or quantitative signals on any number of time frames and use my tape read

    There is an assumption when traders hear scalping that it must mean lots of trades. But, there is possibility to do low frequency, high R style scalping too.

    Another variation, see my Scalping MES post, involves combining a quantitative signals with the idea of market making or scalping within a predefined range. I give myself flexibility to try for high R or just scalp for a few ticks.

    I created my BeyondBot software to allow traders to take trades with systematic edge while still deriving some edge from discretion. This capability provides for very low frequency, high edge scalping/trading that would otherwise be extremely difficult.

    Mark Melnick, from T3 Live, scalps options. And, it seems an interesting approach. Among those who struggle, I suspect they are not experimenting and exploring all the possibilities that exist.

    My point is that if something isn’t working, there might be a variation that can work or a method that can work.

About the Author

The author is passionate about markets. He has developed top ranked futures strategies. His core focus is (1) applying machine learning and developing systematic strategies, and (2) solving the toughest problems of discretionary trading by applying quantitative tools, machine learning, and performance discipline. You can contact the author at