Getting to the other side in trading
Most would-be traders face several hurdles that prevent them from getting where they want to go in trading. If we assume that most traders are trying to make a full-time career out of trading (and I do assume that), then let’s consider where most traders begin.
Most are starting out with a relatively small account – let’s say anything $25,000 and under. So, our beginning trader has a relatively small account, and wants to make a full-time living out of trading.
There’s a third point that’s also important – most people who are attracted to trading are not looking to get rich slow. The vast majority come to trading looking to get rich quick – that’s what has drawn them to trading in the first place.
So, we have a trader that has a small account, who is hoping to trade full-time, and who is looking to do so in a hurry. This is a recipe for a disaster, and in my opinion explains why so many blow up accounts quickly or simply give up altogether – perhaps both.
It usually plays out in one of a few ways:
1. The trader places huge bets to try to maximize gains quickly. This can in fact work out in the short term, but over any length of time, will lead to ruin.
2. The trader, realizing that trading is not nearly as easy as it may appear, and seeing that the road is long to just being able to break even, gives up – they came to get rich quickly, and now realize that it takes a long time to learn how to trade.
3. The trader realizes that they can’t multiply a small account rapidly without blowing up, and so gives up – they aren’t interested in slowly building up an account over time – they want to be rich in a hurry, and trading in the way that they now realize they must in order to be successful will take way too long in their eyes.
Now consider our professional trader who has been at it a long time. This trader compounds wealth at an incredible rate, printing large sums of money month after month.
But this trader didn’t start out like this, and they certainly aren’t betting their entire accounts on trades the way our beginner trader might. What this trader is doing is very similar, in fact, to what our beginner trader eventually realizes they must do – show up every day, and slowly grind out trading gains, being disciplined and not betting the ranch on any single trade.
This is what I mean by getting to the other side. To get to the point that traders aspire to get to when they start out, they must act like a professional from the get-go. But acting this way runs counter to the reasons that brought them to trading in the first place – getting rich in a hurry, so that they can do it full-time.
This explains why so many blow up accounts or give up – they either don’t want to act like professionals and end up blowing up accounts trying to get rich quick, or they inevitably realize that the road is a lot longer than they originally thought when they looked to trading to satisfy their financial and career goals. On seeing the road is long, they throw in the towel and go do something else.
The only way to get to the other side, where the money is truly abundant and where trading full-time is not only achievable but pays much more than almost all careers, is to do two things:
1. Play the long game
2. Pursue trading, not money
First, playing the long game is your only option. If you want to trade full time, you have to accept that this is not a get rich quick game – it takes a long time to both learn to trade properly and to take a small account to a very large account that suffices for trading for a living. Stop focusing on trying to get rich quick, on trying to turn small sums of money into large sums of money quickly. It won’t happen, and will only lead to financial ruin and the wrong state of mind.
Second, you must like trading for its own sake. The truth is, many don’t enjoy watching the markets day in and day out and watching the charts move up and down. Most who get into trading, once they realize what it entails, don’t really enjoy it. Generally, these traders won’t be successful. You need to like the markets and enjoy the art and science that is trading. Trading is a very fun game once you get into it and start trying to become a trader. But you have to stop focusing on the money and start focusing on what being a trader actually is.
In summary,
- Stop trying to get rich quick
- Ask yourself if you actually enjoy trading and markets, or if you’re just trying to get rich quick
- Accept that the only game you can play is the long game – there is no other option available to you
- Stop focusing on money, and start focusing on learning to trade
This is the only way to the other side, where trading is everything you want it to be.
On a final and hopefully inspiring note, you’d be amazed at how much you could accomplish in a year if you just showed up every day, ready to do the work and put in the time. This is true in all pursuits, and is certainly no different in trading.