The Mental Strategies of Top Traders


  • Pages: 207
  • Format: PDF
  • Published Date: 2010


The Mental Strategies of Top Traders: The Psychological Determinants of Trading Success

The Mental Strategies of Top Traders attempts to take another cut at the issue of successful trading by looking across a range of skill sets that are component parts of the successful trader, including among other things a goal-oriented strategy, risk management, creative thinking, and a capacity for collaboration and leadership.

Author’s Introduction:

Learn to understand human psychology, game theory, and behavioral finance phenomena. Assess the gap between the embedded price and what you know can happen and what you hope for. Consider what is in the stock and why the stock is inefficiently priced. What is the magnitude of expectations? The gap is proportional to the amount you expect to be paid. The larger the gap, the more you can make.

All of this may sound radically different to you. It is not the conventional approach that many traders have been led to follow. Can you change your stripes? Can you overcome the psychological hurdles and learn to trade this way, or do you have to be born with this kind of natural ability? Are some traders just naturally gifted with the trader’s edge and others destined to struggle along hoping for a good day here and there? The answers to these questions are at the heart of this book.

Here I hope to define those things that seem to be inborn and those things that can be learned. I want to outline what steps you can take to move your game to the next level. I want you to understand where you have strengths and where you have weaknesses and how you can best
utilize your natural tendencies. If you are evaluating new candidates for your fund, I want you as a hedge fund manager to understand how to look for and choose the best person for a job from the pool of highly talented individuals.

I am writing about the processes in which I am engaged, what I believe in, and how I help traders to produce extraordinary results. Using reallife examples from hedge fund managers and traders, everyday financial crises they face, interviews in which they discuss their own insecurities and exploit the inefficiencies in information, and personal trading profiles, I hope to enlighten you in regard to that “magic” formula we call success.


  • Intellect, Instinct, and Guts: Understanding the Psychological Profile
  • Planning for Action: The Importance of Goal-Directedness
  • ‘‘Fire in the Belly’’: The Ability to Take Appropriate Risk
  • Thinking Outside the Box: The Importance of Ingenuity
  • Separating Emotions and Decisions: The Ability to Be Self-Aware
  • Nurturing Team Players: Listening, Learning, and Working Together
  • Leadership: Directing Success