Trading for a living. Is it possible? There is even a book titled Trading For A Living by Alexander Elder. I think the psychology aspect touched by the Elder is the most important element that will determine whether a person can make it in the trading world.
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Many people failed in trading, especially those from the employment sector. Why? Because of their mindsets. They can't change their mindsets.For example, we were taught from young that failures are bad. Our educational systems discourage failures. So we struggle hard at all cost to avoid getting failed. We are afraid to make mistakes. If we fail or make mistakes, we will be punished or scolded. See? Our educational system and upbringings sure know how to drill the negative side of failing into us.
But in trading, if we can't accept failures and mistakes, then we better leave trading for good. To drink this cup of tea, we need to accept failures and move on. We need to swallow our ego and pride and admit our mistakes and open the next thousands of trades. Take the blame! Nobody is at fault other than our own self. How many of us can do that? A rather tall order, isn't it? An astounding feat?
In trading, we won't be necessary rewarded even if we have been doing our homework. If we got our trade direction wrong, get out. Cut loss! As trading is speculative and to a certain degree gambling (if you don't know what you are doing), our trade position and direction won't be 100% accurate. Just because we pour in tons of hours and efforts to come out with the trade decision, we will still get it wrong, sooner or later.It is just a matter of probability, we are not god. As we can't control Mr Market, and he won't bother how you feel and whatever loss you have, we better be humble, admit that we are wrong and limit our risk to the damage done.
But most people won't do that because they want to get even with the market. They feel that the result is not justified, after all, they have done all the hard work. And this will lead to a loss of capital. Money. Therefore, be prepared to have the financial muscle to withstand a period of at least 6 months to a year or two without income as it is real difficult to even keep one head above the water. Yup, adopt this mindset if you are seious in making trading as your career. The pressure and stress of meeting ends meet will only make the matter worse.
"Trading is so tough" How could one make it? Passion! We need passion to trade. Where would you get all these requirements of trading : high level of commitment, endless hours of screen time ( at least initially), endless research, discipline, focus, perserverance, resilience and patience IF you don't have passion? You would surely "burn out" after a few months and GIVE UP! And that's exactly what happen to most people.
Another thing is our emotion tend to often interfere with our trading. Do you feel high when you are on the right side of the market and feel like the world is like hell when the trade goes the other way? If you can't control this emotional roller coaster, than you won't be able to trade profitably. You will be depleted of energy very soon. More tired than working!
Easy said than done. Detach our emotion from trading. That's why High Frequency Trading (HFT) is so popular in recent years. It contributes more than 75% of the trading volume. HFT is automated trading, the programs are making all the decisions to buy or sell. Thereby, emotion is taken out of trading. Programs based on trading strategies that are continuously being tweaked to make one profitable.
I must emphasize that if you are one that think trading is easy, then you better skip trading. You will save yourself a bundle. TIME and MONEY. Trading is easy only for those who have made it and making a living out of it. Until then, you must spend lots of time and efforts to improve your trading skills to reach that level. Screen time is very important in trading. For me, spending countless hours on the screen with my mind continuously grinding, does go into the right direction to improve my trading skill.
This 27-min video paints some very good points on trading. One of the guys said that they went through a lot of failures to get to where they are now. So learn how to fall down and bounce back over and over again.
I particularly love the advices given by each of them at the end of the video ( 26-min).
"Loose your ego an your pride".
"Stay flexible in the market".
So the trading part is just part of trading. There are still a lot of work to be done, back testing, analyzing, screen time, recording etc. Trading is a money game, so, if you know what you are doing and got it right, you are definitely able to trade for a living. And you will rewarded with wealth beyond your imagination. And I WANT to hear that you are successful in trading when you make it ONE DAY!
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Many people failed in trading, especially those from the employment sector. Why? Because of their mindsets. They can't change their mindsets.For example, we were taught from young that failures are bad. Our educational systems discourage failures. So we struggle hard at all cost to avoid getting failed. We are afraid to make mistakes. If we fail or make mistakes, we will be punished or scolded. See? Our educational system and upbringings sure know how to drill the negative side of failing into us.
But in trading, if we can't accept failures and mistakes, then we better leave trading for good. To drink this cup of tea, we need to accept failures and move on. We need to swallow our ego and pride and admit our mistakes and open the next thousands of trades. Take the blame! Nobody is at fault other than our own self. How many of us can do that? A rather tall order, isn't it? An astounding feat?
In trading, we won't be necessary rewarded even if we have been doing our homework. If we got our trade direction wrong, get out. Cut loss! As trading is speculative and to a certain degree gambling (if you don't know what you are doing), our trade position and direction won't be 100% accurate. Just because we pour in tons of hours and efforts to come out with the trade decision, we will still get it wrong, sooner or later.It is just a matter of probability, we are not god. As we can't control Mr Market, and he won't bother how you feel and whatever loss you have, we better be humble, admit that we are wrong and limit our risk to the damage done.
But most people won't do that because they want to get even with the market. They feel that the result is not justified, after all, they have done all the hard work. And this will lead to a loss of capital. Money. Therefore, be prepared to have the financial muscle to withstand a period of at least 6 months to a year or two without income as it is real difficult to even keep one head above the water. Yup, adopt this mindset if you are seious in making trading as your career. The pressure and stress of meeting ends meet will only make the matter worse.
"Trading is so tough" How could one make it? Passion! We need passion to trade. Where would you get all these requirements of trading : high level of commitment, endless hours of screen time ( at least initially), endless research, discipline, focus, perserverance, resilience and patience IF you don't have passion? You would surely "burn out" after a few months and GIVE UP! And that's exactly what happen to most people.
Another thing is our emotion tend to often interfere with our trading. Do you feel high when you are on the right side of the market and feel like the world is like hell when the trade goes the other way? If you can't control this emotional roller coaster, than you won't be able to trade profitably. You will be depleted of energy very soon. More tired than working!
Easy said than done. Detach our emotion from trading. That's why High Frequency Trading (HFT) is so popular in recent years. It contributes more than 75% of the trading volume. HFT is automated trading, the programs are making all the decisions to buy or sell. Thereby, emotion is taken out of trading. Programs based on trading strategies that are continuously being tweaked to make one profitable.
I must emphasize that if you are one that think trading is easy, then you better skip trading. You will save yourself a bundle. TIME and MONEY. Trading is easy only for those who have made it and making a living out of it. Until then, you must spend lots of time and efforts to improve your trading skills to reach that level. Screen time is very important in trading. For me, spending countless hours on the screen with my mind continuously grinding, does go into the right direction to improve my trading skill.
This 27-min video paints some very good points on trading. One of the guys said that they went through a lot of failures to get to where they are now. So learn how to fall down and bounce back over and over again.
I particularly love the advices given by each of them at the end of the video ( 26-min).
"Loose your ego an your pride".
"Stay flexible in the market".
So the trading part is just part of trading. There are still a lot of work to be done, back testing, analyzing, screen time, recording etc. Trading is a money game, so, if you know what you are doing and got it right, you are definitely able to trade for a living. And you will rewarded with wealth beyond your imagination. And I WANT to hear that you are successful in trading when you make it ONE DAY!
