5 Things Nobody Will Tell You About Trading
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You will pay a tuition –I hate to say this because its a buzkill but there are no shortcuts in this business. If you expect to succeed you’re going to have to pay a tuition or in other words, your dues. Now how much tuition you pay varies from trader to trader but there are two ways to do this. The first, which strangely seems to be the most widely used and the most preferred method among traders is the “hard knocks” tuition. This is the one where you read a few books watch a couple of DVDs and think to yourself “this looks easy enough” and you just dive in head first.I’m pretty familiar with this method as I once held a sensei doctorate level degree from hard knocks trading University. In the end this method worked for me but not until I literally went bankrupt and lost more than $162,000 in the process. The second, is to find a mentor. Someone who has traveled this road, paid their dues and lived to tell about it and are willing to share their knowledge with you so that you may avoid excessive hardships. I know the Internet is filled with stock trading courses and at times these courses can appear to be expensive but most of them will pay for themselves immediately More importantly these courses will keep you from developing bad psychological habits that you may not be able to get rid of down the road
Your limits will be tested …….often As I’ve said many times in the past your legacy as a trader will not be defined by your victories but rather your losses. There will be moments where you can’t seem to get anything right and you can’t find a winning trade to save your life. Don’t be fooled by the flaunting that goes on in social media. Pro traders lose just as much if not more than new traders. The only difference is that professional traders are able to recognize quickly when a trade isn’t working out and they take the loss. Fighting against a trade that you know is not working out is what amateurs do and this often leads to frustration, which leads to revenge trades, which leads to more losses. Being able to stay calm, clearheaded and focused may save you from making an unrecoverable mistake. In this game you simply cannot afford to lose your cool. Also, you must trust and believe in your process and believe in the things that got you to where you are today and not just abandon them when the going gets tough.
There is never a “end point”In our game there’s never a point that you will reach where you have learned it all or there’s never a point that you will reach where you can just relax. I know you may save yourself “If I just make X amount of dollars I will be happy”and your life will be on cruise control. The problem with that is as soon as you make X amount of dollars you’re going to want more X amount of dollars. Not to mention the stock market is constantly changing and you as a trader will have to evolve and change with it. I’ve been around this game long enough that when I first started stock quotes were in fractions of a cent, there was no high-frequency trading or social media and the brokerage platforms looked like something out of the movie War Games. Over my 14 year career I’ve had to learn to adapt. Some of it was easy but some of it was difficult. If you expect to succeed for the long term you will have to do the same
You will only have times of brief advantages In many careers the individual has the ability to create their own opportunities. For example, if a salesperson wants to make more money the easiest way to do that is to make more sales calls. The salesperson has the ability to control that. For stock traders you just can’t create your own opportunity because we are all at the mercy of the stock market itself. Sometimes the market isn’t producing the quality opportunities that were looking for and we have no control over that. What we have to do is be prepared and ready at all times so when that opportunity does come up we don’t blow it. Often times the window of opportunity to get the perfect execution on the perfect trade setup is very narrow and you can’t afford to miss it because that opportunity or that particular trade could be “the trade”, the one that turns around your day or your month or even your year
The person who has your best interests in mid is you.
As with everything in life the person who has the most to gain and the most to lose in any scenario is you. At the end of the day you are the one that has to look in the mirror and live with the decisions that you have made. It’s so easy in this day and age to be influenced by anonymous social media traders to invest your hard earned money into a stock. I’m not saying that every social media trader is bad, as a matter of fact most have good intentions and social media has far more benefits than negatives. However, there’s always a bad apple in every crowd. Often times these anonymous traders don’t even hold positions in the stocks that they’re talking about and in most cases you have no idea what their agenda is. If you lose money trust me they will not lose sleep over it, the only person that will is you. Put yourself, your education and your family first.
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