Sixth Habit of HET

 I shed a silent tear yesterday on the news of Steve Job's death. Today, it looks like the market will make me cry. Remember that I am short on the Nifty. Will cut and go flat above 4941. I am not planning to go long today. For the moment at least the markets look like believing the European story that they will somehow work out a solution to the problem. My only fear is that the problem itself is not understood enough by the powers that be and therefore the solutions might not turn out to be effective.

Having added my two bits to the plethora of noise out there, I will proceed to give you the final installment of my life changing "Six Habits of Highly Effective Traders". It goes "Learn Effective Communications Skills. Beef up your personality" If you have been diligently practicing the previous five habits then you would have reached a stage where you are not only maximizing your potential as a trader but also using the remaining time in teaching some trading skills or pontificating on TV and earning some steady income on the side. You would have also gained in confidence as a trader.

But the sixth habit will be the key to going from an also ran to a trader who is renowned in the market. While you can forever continue to make money on your own trading and make a decent living out of that, real money and wealth can be created only when you trade for others. Let me assure you that getting somebody to entrust their money to you is not an easy thing and it will require diligent practice of the Sixth Habit to get to that level as a trader.

The teaching and talking on TV would have helped you to develop as a communicator. But remember verbal communication is only part of the story. Non verbal communication is even more important. If you are going to be talking about disciplined trading to a potential investor then you cannot look like a fat slob. The exercise you did as a part of the second habit will help but it is now time to take it to another level. Make yourself look and feel smart. Buy a Honda Accord and if you cannot then at least a Civic. All this will give you the air of a person who is making money trading. You cannot go for a client meeting in an Alto. Which client will part with his hard earned money to a person who cannot himself make money in trading?

Always give the impression that you are aware of what is happening in the market. Even if you trade based on a trading system do not try and educate people beyond a point on the benefits of that. No client likes to entrust his money to a person who cannot talk educatedly about the market and about companies in the market. They expect their fund manager to be an erudite all rounder. Every client will expect you to be different (read that as give better returns than others with lower risk) but not so different that you come across as a total maverick. So even if all your decisions are based on a few trading systems, do learn to talk as if you have the inside dope on the market.

However please note that all that these habits will do is to make you achieve your full potential as a trader. But it will not make you better than your trading system itself. If you tried all these habits  and you still are not an effective trader, then give up. Better to conserve some of the money that you are left with. Of course, if you are good with the Sixth Habit and if you are trading client money then do not bother. Just continue to find new clients. Given the number of idiots around, I am sure that by pure chance some of them will even be rich idiots and you can find new clients all the time.

If you cannot inculcate these Six habits and cannot even find clients and you are addicted to trading your own money then there is only one thing that you can do. Find a job as a salesperson in a large broking house! Maybe all the excellent research work your highly paid research team does will help you make some money on your personal trading/investing. Though I doubt even that will help given the fact that the analysts insist on taking their salary and bonus in cash and not in stock of the company that they recommend a BUY on. Actually that is a nice idea. Maybe part of analysts salary should be paid compulsorily as stock in company that they recommend!