Summary of Brent Donnelly's Alpha Trader

By IRB Media

Get the Summary of Brent Donnelly's Alpha Trader in 20 minutes. Please note: This is a summary & not the original book. Original book introduction: ALPHA TRADER is for traders of every skill and experience level. Veterans and rookies alike will benefit as the book digs into topics like self-awareness, discipline, endurance, and grit. Learn the common traits of winning traders, the myriad sources of trader kryptonite, how to improve your decision-making, and how smart people do stupid things, all the time.

Professional trading is a lifelong journey of self-improvement, struggle, adaptation, and success. This book will help you level up on that journey.

• Language: English
• Publisher: IRB Media
• Release date: Dec 9, 2021
• ISBN: 9781669343622

IRB Media

With IRB books, you can get the key takeaways and analysis of a book in 15 minutes. We read every chapter, identify the key takeaways and analyze them for your convenience.

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Insights on Brent Donnelly's Alpha Trader

Contents

Insights from Chapter 1

Insights from Chapter 2

Insights from Chapter 3

Insights from Chapter 4

Insights from Chapter 1

#1

Part One is a quick look at success in general and at success in trading more specifically. It begins with a self-evaluation and goes on to discuss the factors that lead to trading success.

#2

The first step toward becoming a better trader is to get a firm grasp on who you are right now. You are a bundle of emotions, memories, history, knowledge, and bias. You can be smart and do stupid things.

#3

The four groups of the assessment are: 1) the A to D traits, which are on a continuum of bad to good; 2) the E to L traits, which are on a continuum of good to bad; 3) the M to V traits, which are on a continuum of bad to good; and 4) the W to Z traits, which are not necessarily good or bad, but rather just different.

#4

The 10 Traits of the Alpha Trader are: A natural fit for trading, but too much risk-seeking can lead to recklessness and ruin. Good traders seem to be luckier than bad traders. Adapt or die. Markets are always changing. Nothing beats experience.

#5

The quiz reveals your trader personality, and helps you determine which strategies might work best for you. Whatever grades you gave yourself are probably somewhat inflated relative to reality because human beings pretty much always overrate themselves.

#6

To succeed in trading, you must learn to accept and deal with the fact that it is a competitive field with few barriers to entry and no specific credentials are required. And the financial rewards are potentially astronomical.

#7

You need a significant edge to not only make money, but also to make enough money to exceed execution, technology, and operational costs. The bar for success in trading is high.

#8

The successful rate of individual day traders is 5 percent. It isn’t a matter of flicking through a few charts, drawing a couple of trend lines, or using some automated Charty McChart.

#9

The majority of day traders lose money, and the reason is that the markets are extremely efficient. If you try to beat the market using unskilled methods, you will fail. However, if you try to beat the market using skilled methods, you may have a chance at achieving positive returns.

#10

Success in trading is rare, and the methods for achieving it are equally rare.

#11

What leads to success in similar fields is a general theme throughout this book.

#12

IQ is a controversial topic in the world of psychology, and there is heated debate over what exactly it measures.

#13

There is controversy around whether or not there is a correlation between IQ and various measures of success, but most studies show some sort of correlation.

#14

The Big Five personality traits are: openness, conscientiousness, extroversion, agreeableness, and neuroticism. They are the five broad aspects of human personality that are used in the majority of research.

#15

The Big Five personality traits have a significant influence on a person’s income. They are: Openness, conscientiousness, extraversion, agreeableness, and neuroticism. Neuroticism has a negative influence on income, and agreeableness has a negative influence as well.

#16

Conscientiousness is another trait that consistently correlates with high performance in sports, and it has been shown to be important for trading too.

#17

The first step in becoming a successful investor, besides having a strong work ethic, is to become as knowledgeable as possible about the financial markets.

#18

Luck also plays a significant role in extreme success, and while you cannot control it, you can work hard and increase your luck by seizing opportunities that present themselves.

#19

Luck, which is defined as a favorable occurrence, is actually a combination of skill and seizing unexpected opportunities.

#20

The next time you feel like you are just like that, or that you are really disorganized, remind yourself that being organized or on time or proactive is a choice. Your mind is malleable and can be changed.

#21

The final step is to develop new trading systems, which must be done in conjunction with the previous ten steps.

#22

The Big Five personality traits are also correlated with success in the broader world. They are openness, conscientiousness, extraversion, agreeableness, and neuroticism.

#23

People who are rational and do not jump to quick conclusions using mental shortcuts are more successful in trading.

#24

The author previously stated that the best traders are those with high RQ, or rational thinking. The author now states that intelligence and rationality are not necessarily linked.

#25

The two systems of thinking are System 1, which