What is your definition of trading success?

I came across an interesting discussion recently about success in trading. If you go and look around you can find dozens of different definitions as to what is success, not only in trading, but also life in general.

And, as with most discussions, everyone will have their own opinion or belief about how you define success, and it will almost certainly differ from the opinions or beliefs of others.

For some, success may depend on how far up the trading establishment they have travelled, and how much money they have under management.

Position size and the size of the account you are trading should not determine whether you are a success or not. If it was, then you would argue that someone trading their own money, who is able to make a 50% return over a year trading a £100k account is less successful than a trader who only makes 20% (plus their substantial commissions no doubt) on a $100m fund. Is that right?

I'm a trend follower, and in its purest form trend following is an absolute returns approach. However, it can be prone to drawdowns which a lot of traders or investors may struggle to accept. After the Turtles disbanded, Jerry Parker set up Chesapeake Capital and essentially de-leveraged the Turtles approach. He was prepared to sacrifice some of the potential returns, in exchange for smaller drawdowns or a reduction in downside volatility. Does that make him less successful than another trader who makes bigger returns but also suffers larger drawdowns?

These days, trading within financial institutions seems to be a closed shop - I talked about this here. Therefore, by definition, people who fail to meet their criteria are forced to travel their own path. Some might say they've had a lucky escape...

People can be ultra-successful trading their own money, but struggle when going into money management. Richard Dennis made in excess of $200 million, yet when he started managing money he bombed.

Marty Schwartz's journey was well chronicled both in his Market Wizards interview as well as his own book, Pit Bull. He was phenomenally successful trading his own funds, yet when he set up Sabrina Partners L.P., he struggled and the whole experience damn near killed him.

In both cases, part of the reason was that investors were continually critiquing or second-guessing what they were doing. Does the ultimate failure of their funds mean they are no longer considered a success?

For others, such as an individual trader new to the markets, success for them may be putting together their first profitable individual trade, month or year.

Other people may look at not only their trading performance, but also their quality of life. In The New Market Wizards, one of those interviewed was Tom Basso. His performance figures weren't the best, yet he had a level of serenity - is money the be all and end all? As Jack Schwager said introducing his interview with Basso:

"The results are significantly better than the industry average, but hardly extraordinary. And yet, in an important sense, Basso is perhaps the most successful trader I have interviewed. To paraphrase a recent commercial, how you do spell success? If your answer is M-O-S-T B-U-C-K-S, then Basso doesn't make the grade. If, however, your answer is G-O-O-D B-U-C-K-S, G-R-E-A-T L-I-F-E, then Basso has few peers."

Still others define success by the material items they have acquired along the way - the big mansions, the fast cars. I recall reading a story about Richard Dennis getting ribbed by his fellow traders in Chicago when he turned up late one morning. The reason? His beat up old Chevy had broken down. The guy was worth millions at the time.

I guess the only thing you can say is that you should not let others define your level of success - you yourself will know whether you are successful or not. No one else knows where you started from, what your goals are, or at what stage along the journey you have reached.