Trader
People or systems who help parties exchange goods and services are producers of surplus. Becoming increasingly skilled at trading is a constant goal of mine. I am a permanent student, and I find I learn best by writing, thinking, and sharing with others. What do I mean when I use the term Trader?
Definition: a person who buys and sells goods, currency, or stocks.
Some thoughts for the aspiring trader.
- When two parties freely exchange goods, there is always a surplus. How that surplus is distributed is largely, but not solely, a function of the leverage and negotiating skill of the parties.
- Reflect on whether you consider your “profit” from an exchange in absolute or relative terms. Absolute traders focus on the velocity of transactions they can perform, and multiply them by the surplus they create. Relative traders focus on the surplus they create relative to their trading partners. I dare say that Absolute Traders are more likely to be happier and wealthier in the long run.
- Trading has distinct parts including the exploration of opportunity, establishing a common language for communication, assessing the surplus expected, and forecasting the strategic implications of a relationship. The larger the opportunity, the more time should be spent reflecting on each function. When a profitable opportunity presents itself, help make it happen!
- Transparency, directness, and reliability are leading attributes of dominant traders.
- Great traders tend to be stronger individual contributors, than managers. To the extent they are great coaches, their leadership tends to come through demonstrated fundamentals versus instructions to others.
A special thanks to Dan Morosani, Dianna Abdala, and Stephan Dalal for helping me pull this post together.