Asset managers usually focus on long-term investing for clients, charging flat fees and avoiding short selling or heavy leverage. Hedge funds, by contrast, often use more aggressive strategies, including shorting markets and using leverage.

A strong trading edge rests on four pillars: risk management, emotional control, process discipline, and trade selection. Managing risk and emotions is often more important than simply finding the right trade.

Traits like overconfidence, stubbornness, perfectionism, or compulsiveness can undermine performance. They often lead to overtrading, ignoring risks, or holding losing positions too long.