There are various opinions about the trading business. Many of which are not exactly positive. So, what’s the real deal…Why are people so negative towards it and why is it that so many traders don’t make it? Is the business really impossibly rigged against us? The simple answer is NO. In fact, trading is the greatest meritocracy there is. There aren’t too many other businesses that I know of where your age, the college you went to, your looks, your intelligence level, your dress code, your weight, size etc. doesn’t matter. Let’s be honest, there’s not an interviewer alive that isn’t ‘pre-judging’ you in some way shape or form. Many of you know exactly what I am talking about, so there is no need to go into details. These things don’t exist in trading. There are no politics, and no one holding you back from success, except for YOU. So, back to the original question. If trading is the greatest meritocracy in the world, then why do most people struggle? In a word: discipline.
In most aspects of life we knowingly follow a set of predetermined rules and guidelines, or else we face consequences. Show up late to your new job and what happens? Drive too fast on the highway and what happens? I think we all know the answers. Thus, the greatest attractions to trading: freedom, flexibility and profits are also its greatest drawbacks. The reason is simple: most people are used to being told what to do, when to do it, and how to do it. If they don’t do it, they knowingly face strict consequences. There are no such consequences in trading.
We sit alone in our office with no one looking over our shoulders. No one ‘forcing’ us to hold that trade to target, or exit at our pre-determined stop loss. It’s simply on us. 100% of the time. In fact, no one (other than yourself and your broker) even knows if you make or lose money. No one likes to admit to mistakes, and to make it even worse, when no one knows you made those mistakes there is no consequence to fix them. Obviously the ultimate consequence is going on tilt and blowing up your account, but the truth is most traders would rather lose $10,000 quietly than lose $100 publicly in front of business associates, family and friends because it makes us look bad, inadequate and even foolish. Our ego drives us. In trading, our ego destroys us.
So, if you want to be a successful trader, you need to check your ego at the door and objectively admit to mistakes. A good way of doing this is to have someone review your trading results each and every day. This will help keep you accountable for your actions. This is also why prop programs and the Live Traders Corporate Account Program (CAP) have grown in popularity over the past several years. These types of accounts place maximum daily/weekly/monthly loss limits on your trading and ultimately hold you accountable for your actions.
There is absolutely no question that trading is a viable, lucrative business that offers unmatched freedom and flexibility. However, most people lack the self-discipline, and patience required to enjoy those aspects of the business. What traders have to understand is that this business is simply a matter of odds. Some trades work, some trades don’t, but if you manage your trades properly and adhere to intelligent and strict money management guidelines then you will ultimately win. However, if you choose to constantly break your rules and poorly manage your trades and your account, then you will almost certainly join the legions of failed traders that continue to spew negativity about this industry. Their negativity is simply a product of jealousy and ego about their failures. How is it that some traders consistently beat the markets while others don’t, yet we all have access to the same information? It’s certainly not luck. It’s just a matter of finding your niche and then consistently applying it the same way each and every day. Consistency. Yes it is challenging, but all in all, trading is a truly outstanding business with near limitless potential. So, don’t let the negativity surrounding this business stop you from trying it. If you have the desire and persistence to succeed, you will. No matter what industry you choose, there will always be detractors and naysayers, but that is simply disgruntled failures trying to feel better about themselves.
If you want to learn more about the trading industry, email: email@example.com for more information. We have many years of experience not only as great traders but as industry leading educators. Feel free to give us a call at 800-947-4027