Many new traders jump into trading thinking that it is easy to make money. Most are usually captivated by the lure of advertisements telling them how easy it is to make money by taking some signals and spending only 30 minutes a day monitoring the market.
The truth is, learning about trading is not as easy as attending a seminar and taking a book and reading it. Trading is a highly skilled profession similar to a lawyer, a doctor or an engineer. It takes about 3-5 years to get a degree in these professions. After that, the student still need to gain experience for a few years before knowing the ins and out of the profession. It is only after 5 years that the new professional will be able to produce some good results.
Trading is different from many professions in that the effort one puts in is not directly related to a clear and immediate payoff. With most professions, it is a certainty that the number of hours you spend learning a craft and applying it has a direct payoff.
Just Think about the below Question
How many guys do you know who can accept being wrong?
How many guys do you know who can be wrong and lose money?
How many guys do you know who can be wrong. lose money and not feel bad?
How many guys do you know who can be wrong, lose money, not feel bad and reverse their position?
How many guys do you know who can be wrong, lose money, not feel bad, and reverse their position quickly?
To be successful as a trader, you must be willing to do whatever it takes, no matter how exasperating. The risks and sacrifices are many. You may not be able to spend as much time with your family as you prefer. You might have to work extra jobs to build up capital and pay for trading expenses. It is often necessary to focus exclusively on trading.
It’s possible to make huge profits in trading. The difficulty is surviving. You can be at the top of your game one year, and looking for a new profession the next. Survival is important. What’s the sense of reaching the status of a master trader if you just burn out after a year? It’s an unpleasant truth. Few achieve lasting success, and of those that do, many traders burn out. The stress is enormous. Your money and ego are often on the line. When you aren’t trying to learn new trading methods, you may spend your leisure time trying not to worry whether or not the market will go against you on the next trading day. Even while you relax with friends, you may worry about the markets in the back of your mind. It’s hard to make it as a trader. It’s vital that you find a way to avoid joining the club of burned out traders.
There’s a different reason why trading might be one of the world’s most difficult occupations: the rules of the game are always changing. In most performance activities, from sports to chess, the rules don’t change from year to year. Market patterns, however, are continually shifting: trends change, volatility changes, and historical patterns that worked at one time suddenly fail during the next time period (a phenomenon that has recently tripped up several quant funds).
Nobody Can Control The Direction Of The Market
A king can have his army around him and tell them where to go and what to do. A rich person can use money to buy the services of talented people and thus have control over a situation or project. When it comes to the stock market, even the richest and most powerful individual cannot control the direction of the market Remmber DHFL It was in Rakesh Jhunjhunwala Portfolio. If a stock crashes, the rich person might be able to shore up the stock for a period of time by buying the stock. But if the stock is a lousy company, no matter how much you buy the stock, it will eventually go where it wants to go. If it is so difficult to control the price direction of a single company, how much more difficult it is to make the entire market go where you want it to go. Imagine trying to stop the market from crashing in 2020 Covid Crises. You will just be throwing off good money trying to buy every stock in the world to keep it from dropping. That is one of the reasons why smart people lose money in the stock market. Their experience tells them they can control their own professional lives but the stock market is greater than a single person. It will always go where it wants to go. If you have no respect for it you will be swallowed by it. Traders can only react to what the stock market gives us. We do not try to control it or predict it. If the stock market is in an uptrend, we want to be long the market and buy the dips. If the market is in a downtrend, we want to stay away from the market or learn to short the market. By reacting to what the market gives us, we will be going with the flow of the market rather than against it.
Becoming a trader who is consistently profitable is rare, and this fact hinders one from making a firm commitment. Many professional traders warn novices that trying to gain success overnight is daunting, unrealistic, and quite discouraging. It’s best to take it one step at a time. Gain knowledge, develop skills, and then gradually increase your position size. Even seasoned traders point out that trading is so difficult in the long term that they just take it “one day at a time,” or one trade at a time. To be good at trading you must fully understand and embrace the idea that it is extremely challenging and that you will lose money at it on a very regular basis. Once you internalize that thinking then you are in positions to develop a way to be successful at it. You can never take the market for granted. You always have to be on guard with the mindset that it is going to steal your cash if it is given an opportunity
Trading is difficult. It takes time and effort. In the final analysis, though, you must feel that it has meaning. The ends don’t always justify the means. It’s vital that you feel it is all worth it in the end. Answers to these difficult personal questions will help you achieve and maintain lasting financial success.
Trading Requires An Unusual Combination Of Emotional Resilience (The Ability To Tolerate Being Wrong) And Mental Flexibility (The Ability To Use Losses As Information And Quickly Change One’s Position In The Markets).