A Fools Game
I received an email this week with a question (below) which caused me to think about the wisdom of pursuing trading as a career. Regardless of your trading time span, the skills and concerns of active short-term trading are relevant to all market participants.
Question: "There are a lot of people who say that day trading is for "fools" and that it is very difficult to make a living from Day Trading. What are your opinions?"
Trading is like most business: it requires commitment and
perseverance. It is never easy to make money, but people who have
mastered a skill make it appear easy. The really successful pit
traders that I have known made trading look very easy,
tantalizingly easy; but they all had many years of experience
behind them. For every successful trader there has probably been
a few hundred who have tried and failed.
I think people fail at any business if they approach it
without an appreciation and understanding of what is required for
success. The majority of traders fail because they have no such
appreciation and they have unrealistic expectations of
themselves. Any trader who starts with the expectation of
becoming an instant success is setting himself up for failure. No
one would decide to become a golf pro and assume that they could
just pick up a bag of clubs and start winning tournaments. Yet
novice traders do this all the time.
Just to start with the understanding that trading is a skill
that is developed over time, through experience, puts a novice
trader way ahead of the competition.
There are 2 core skills in trading, first the ability to
anticipate the market (read the market) and second, having the
discipline to execute your plan. To learn to read the market you
may as well use a trading simulator and only start to trade when
you have demonstrated to yourself that you can anticipate the
market. Discipline, though, has to be developed and tested in the
real world. Discipline is really the crux of the matter and it is
here that most traders fall down. Their failure is mainly due to
the fact that they are not really aware of its importance. Just
starting out as a trader with the intention of developing your
discipline puts you way ahead of the average trader. If you can
trade with discipline (i.e. stick to your own rules and limits)
you are 95% there!
So I would say that for the average aspiring trader, trading
is a fool's game; but for those of us who approach the business
as a business, with a clear understanding of the unique
challenges that trading offers, it is a rewarding and fulfilling
LIFFE Pit Trader & Electronic Trader InstinctiveTrader.com
forex currency trading news updated Mon. January / 22 / 2018
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