Dr. Tharp wrote “Super Trader Make Consistent Profits in Good and Bad Markets ” in an easy-to-read style quite different from his more technical approach in previous works. Each short chapter focuses on one concept critical to trading success.
Throughout the book, Dr. Tharp raises the pertinent questions you must ask yourself about becoming a trader, being a trader, and succeeding as a trader. The rewards that come with being a Super Trader—both financial and personal—make you feel as if you can leap small buildings in a single bound.
To help you with your self-assessment, Dr. Tharp developed a quick 17-point questionnaire you can use to evaluate yourself. Take it and pass it on to your friends; I’m sure you’ll all get some insights into your performance. Answer each question with true or false.
- I have a written business plan to guide my trading/investing. ____
- I understand the big picture about what the market isdoing and what is affecting it. ____
- I am totally responsible for my trading results, and as as result I can correct my mistakes continually. (If either part is false, all of this statement is false.) ____
- I honestly can say that I do a good job of letting my profits run and cutting my losses short. ____
- I have three trading strategies that I can use that fit the big picture. ____
- For trading strategy 1 I have collected an R-multiple distribution of at least 50 trades (i.e., from historical data or live trading). If you don’t know what an R-multiple distribution is, which you’ll learn later in this book, you haven’t collected one, so answer “False.” ____
- For trading strategy 2 I have collected an R-multiple distribution of at least 50 trades (i.e., from historical data or live trading). ____
- For trading strategy 3 I have collected an R-multiple distribution of at least 50 trades (i.e., from historical data or live trading). ____
- For each of my trading strategies, I know the expectancy and the standard deviation of the distribution. ____
- For each of my strategies, I know the types of markets in which they work and in which they don’t work. ____
- I trade my strategies only when the current market type is one in which the strategies will work. ____
- I have clear objectives for my trading. I know what I can tolerate in terms of drawdowns, and I know what I want to achieve this year. ____
- Based on my objectives, I have a clear position sizing strategy to meet those objectives. ____
- I totally understand that I am the most important factor in my trading, and I do more work on myself than on any other aspect of my trading/investing. ____
- I totally understand my psychological issues and work on them regularly. ____
- I do the top tasks of trading on a regular basis. ____
- I consider myself very disciplined as a trader/investor. ____
Give yourself one point for each true answer. Be honest with yourself.
Fill in your score here_______
How to evaluate yourself as trader
- 14 or more. You have the makings of a great trader/investor and probably do well in the markets.
- 10–13. You have a lot of potential but probably are making some major mistakes; for many of you, these may be psychological mistakes.
- 7–9. You are way above average but haven’t graduated to the big leagues yet. You are like a high school football star trying to move to the NFL.
- 4–6. You are better than the average investor on the street but have a long way to go to hone your skills. You probably need to work on yourself, your discipline, and your trading strategies.
- 3 or less. You represent the average trader/investor. You probably want someone to tell you exactly what to do and expect to make big profits now; when it doesn’t happen, you look for a better advisor or guru to help you. Guess what? It doesn’t work that way. If you answered “True” to questions 3 and 12, you have some potential and, if you are willing to commit yourself to excellence, could move to the top of the scale in a few years.