I spoke to 100+ professional traders in the last couple of years.

They all shared a few things that were key-drivers of their success in trading.

Here’s a breakdown of each one. 🧵


1) Being very disciplined


Some of the memorable losses of these traders came due to lack of discipline and due diligence.

Be disciplined, not only within trading, but also outside.

Within trading:

  • Follow the right trading discipline.

This means

  • Cutting losers fast
  • Riding winners long
  • Following your system strictly
  • Prudent risk management
  • Maintain a journal
  • Do proper due diligence
  • Always be punctual

Outside of trading:

  • Working out every day - keeping your body fit and healthy
  • Reading books, consuming media that improves your intellect
  • Being systematic about how you lead your life

You can’t be a disciplined person within trading and a complete mess outside.

What’s outside will convert inside.


2) Confidence + Humility


It’s very very important to be confident in your decision making process.

It’s also important to be humble enough to recognise and learn from mistakes.

If you’re not confident and keep second guessing yourself, you will be standing in your own way.


3) Responsible use of leverage


Some of the discretionary traders I spoke to experienced a blow up in their early days.

They attributed it to irresponsible use of leverage.

There are conservative as well as aggressive traders in the mix.

But, a common advice they all gave was to not take more than 2x-3x leverage, 2x being the standard limit.


4) Having a playbook of strategies


All these traders have a few go-to strategies and setups that they trade with discipline.

Some have capital >500cr, some with capital >100cr, and some 10-100cr.

Depending on their book size, they have go-to strategies that they trade.

They never deviate from their playbook except for special situations introducing one-off risks.


5) Being as methodical as possible


No single person I spoke to trades based on gut feel alone.

Systematic traders are usually fully systematic/automated.

Discretionary traders trade based on rules.

They have a systematic sizing, risk management, and scaling approaches.


6) Having a supportive family & spouse


Barring 2-3 who are still not married, almost everyone had this in common.

Having a supportive family and spouse is directly tied to your success in this industry.

Some of these spouses took jobs to bring stability into the household.

Some of them took care of the kids AND built stable cashflow sources.

They did freelance work, small business, etc., anything that would bring them cashflow.

Trading is among the hardest profession as it is.

You don’t need an unsupportive family/spouse to be standing in the way.

So, before you start, make sure you have your family rallying behind you.

It makes everything else relatively easier.


7) A constant hunger to keep learning


Every single one of these traders have an insatiable hunger for learning.

It isn’t just finance and trading that they study.

They regularly read books and consume media on different topics outside of trading.

They have a diverse information diet.

And, they are constantly on the look out for the things that will improve their life further.

They view trading as a life-long journey - one of learning and growth harmoniously tied to quality of life.


8) Screen time with charts during and off market hours » 1000 books


Almost all these traders said that one doesn’t need to read more than 5-10 books to become a good trader.

Once you have the basics covered, you should focus on having more screen time.

Watch charts, price action, and understand the movement of the instruments you trade.

Record every trading session and replay it for finding mistakes and ideas.

Reading books to look out for ideas is great.

But, having real time market experience trumps anything else.


9) Prudent and proactive risk management


The way these traders manage risk differ across the group.

Some bet no more than 1% per trade.

Some have a proper systematic way of scaling up and down based on their strategy.

Everyone has a method with which they manage to keep their losses smaller relative to their profits.

They also strictly follow those rules without any deviations from their risk management frameworks.

So, how you manage risk decides whether you go pro or go home.


10) Having a good life outside of trading


These traders recognize the value of having a good life outside of trading.

They have regular vacations, have hobbies and activities they pursue outside of trading.

They spend quality time with family and friends.

They have skills and things they are passionate about they like to pursue outside of trading.

They say that doing this helps them bring their fullest to trading every day.


11) Having extra sources of income


All the traders advocate on having extra sources of income.

At least in the first few years of your journey as a full time trader, it’s important to have predictable cashflow.

Most of them didn’t have it and some struggled due to that.

In their initial years some were so bad at personal finance.

Everything else suffered in their life.

Had it not been for their supportive spouses, they would have had to drop trading and go for a job.

Anything that you can do to create extra sources of cashflow - do it.

This helps you focus better on trading without the stress of performing.


12) Creating a nest egg for tough times


Few traders had personal/family emergencies during their formative years.

They had to dig into their trading capital and this set them back by a few years.

So, before going into full time trading, have a nest egg.

This should be for family expenses, utilities and other personal and medical emergencies.

Better if it can last you a couple of years.


13) Making sure your finances are in order


Most of these traders knew how to trade and compound their capital.

But they didn’t pay attention to their personal finance.

These are all important:

  • Term Insurance
  • Mediclaim
  • Nest-egg emergency fund
  • Passive investments




14) Exploring edges, exploiting the A+ ones.


In the initial days, you should explore different ideas with the smallest risk.

Then you should exploit the ones that show an edge.

Whatever ideas you have, test with 1 share, 1 lot, the lowest size possible.

Have a journal.

Consistently journal these executed trades (and planned trades).

Be diligent with record-keeping.

Wherever you see an edge, exploit it by scaling up in those setups.


15) Research.


If you’re a systematic trader, research is in finding new ideas to backtest, validate, and deploy.

If you’re a rule-based trader, it’s in screening and scanning for opportunities.

It’s important to have an established routine for researching for edges/setups.


16) A good circle of traders to interact with and ideate with.


Trading is a lonely job.

Having a circle of high quality fellow traders to go along on this journey is very very helpful.

You can bounce ideas off each other, help find new setups, come up with new ideas to test.

Such a group also acts as a support system during tough times in the market.


17) Learning before earning - solid understanding of fundamentals

Before being able to make millions, you should be able to understand the markets you trade in.

Whatever segment you trade in, understand how that segment works thoroughly.

Understand the specifics of margin, leverage, settlement, etc., before you trade any segment.

Following books are useful:

  • Market Microstructure - Trading and Exchanges by Larry Harris
  • Options Trading - Options Volatility and Pricing
  • Derivatives Risk - Dynamic Hedging
  • Cash market - Think and Trade like a Champion



18) Upskilling oneself and keeping up with the markets


Markets today are nothing like markets 20 years ago.

20 years ago it was floor trading.

10 years ago computerised trading was popular but retailers didn’t have full access.

Today, retailers have access to the high quality features and trading environment.

Floor traders who didn’t adapt to computerised trading perished.

What would markets look like 20 years from now?

How will you keep up with the improvements?

By learning the skills that will help you adapt to the markets.

Learning the following skills should help you keep up:

  • Programming (Python, C++, Excel)
  • Mathematics (Probability & Statistics, Linear Algebra, Calculus)
  • Data Science & Machine Learning




19) Constant hunger to scale up


Scaling up is the name of the game.

One way to scale up is keep adding capital and compounding.

Another way is to manage other people’s money.

Stagnating at a certain level is okay if you are treating stock market like a job.

But, if you want to create multi-generational wealth, you have to keep scaling up.

That is while still being responsible with leverage.


20) Diversification in the markets they trade


Some traders stagnate at a certain capital level.

This happens usually after hitting a ceiling in the market/product they trade.

Those who go on to keep compounding diversify their presence across markets.

Someone who trades NF & BNF may diversify by adding Crude, Gold, and USDINR to their portfolio.

Someone who trades ES might diversify by trading Copper and Soybeans.

True diversification gives them the ability to scale up.

It also provides an added advantage of trading uncorrelated markets.

Trading uncorrelated markets helps in managing drawdowns at a portfolio level.

So, diversification is an important aspect of scaling up.


21) Importance of Higher Timeframes


Traders also shift themselves to higher timeframes as they scale up.

You can’t trade 1000 lots in Nifty Futures intraday without moving the market.

But on a daily or 4H timeframe, you can do that.

You’d still have impact cost, but not as much as if you were to trade such size intraday in 5m, 10m timeframes.

Also, there’s lot less noise in higher timeframes.

Due to that, your analysis in such timeframes will be more meaningful.


22) Avoid trading the PNL


At some point, you’re going to have to stop looking at your PNL swings.

Develop the ability to look at trades from a percentage perspective.

You can also look at the number of ticks / points made or lost.

Looking at PNL swings is futile and will be detrimental to your growth.

It will also not allow you to scale up your trading operations.

Detaching yourselves from the absolute number is difficult at first.

But it’s possible with practice.

The sooner you do that, the better your experience will be while scaling up.

And that’s it!

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