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Abstract Understanding the mechanisms that promote the coexistence of hundreds of species over small areas in tropical forest remains a challenge. Many tropical tree species are presumed to be functionally equivalent shade tolerant species but exist on a continuum of performance trade‐offs between survival in shade and the ability to quickly grow in sunlight. These trade‐offs can promote coexistence by reducing fitness differences.Variation in plant functional traits related to resource acquisition is thought to predict variation in performance among species, perhaps explaining community assembly across habitats with gradients in resource availability. Many studies have found low predictive power, however, when linking trait measurements to species demographic rates.Seedlings face different challenges recruiting on the forest floor and may exhibit different traits and/or performance trade‐offs than older individuals face in the eventual adult niche. Seed mass is the typical proxy for seedling success, but species also differ in cotyledon strategy (reserve vs. photosynthetic) or other leaf, stem and root traits. These can cause species with the same average seed mass to have divergent performance in the same habitat.We combined long‐term studies of seedling dynamics with functional trait data collected at a standard life‐history stage in three diverse neotropical forests to ask whether variation in coordinated suites of traits predicts variation among species in demographic performance.Across hundreds of species in Ecuador, Panama and Puerto Rico, we found seedlings displayed correlated suites of leaf, stem, and root traits, which strongly correlated with seed mass and cotyledon strategy. Variation among species in seedling functional traits, seed mass, and cotyledon strategy were strong predictors of trade‐offs in seedling growth and survival. These results underscore the importance of matching the ontogenetic stage of the trait measurement to the stage of demographic dynamics.Our findings highlight the importance of cotyledon strategy in addition to seed mass as a key component of seed and seedling biology in tropical forests because of the contribution of carbon reserves in storage cotyledons to reducing mortality rates and explaining the growth‐survival trade‐off among species.Synthesis: With strikingly consistent patterns across three tropical forests, we find strong evidence for the promise of functional traits to provide mechanistic links between seedling form and demographic performance.