Why people start TRADING?
Why do I want to be a trader? To many, the most obvious answer to that question would be "to make fast money, to be rich and to live an exciting life". But are these always the good reasons why one start trading?
The key in becoming a professional trader is to understand the real reasons why you want to start trading.
Being a successful trader involves more than reading a few books, listening to some podcast or taking few online courses. You have to devote a substantial amount of time and tremendous effort before ever placing a trade in a live market.
Whether you want to day trading actively, or just want to swing trade a few positions per week, there are things you need to know before starting.
Don't become a trader for these reasons:
1) Fast Money
That must be the worst reason to be a trader. Fast money isn't consistent money. You gain fast, but most often you lose even faster. Fast money is like gambling at the casino, betting on a roulette...Red or Black. To be a trader is a profession, is not something you can think lightly and just "play". When you take a trade, you have back tested your system, you know exactly your entry and exit, you have your stop loss, and you know your risk.
2) Big Gains
Pick a stock, buy a few shares and expecting a big gain, how awesome would it be to end up with one million with one trade? Trading is a great way to make a lot of money but it doesn’t happen overnight. One need to be realistic and forget the get rich schemes, that doesn't happen...unless you still believe in Santa Clause.
3) Exciting life
Do you feel the adrenaline rush? Better than sex and cocaine combine isn't it? That is how Hollywood wants you to believe, but trading isn't that always exciting. To be a professional trader, one has to be disciplined, to be coherent and follow a routine, to have a trading plan, to manage risk, to be alert and to maintain a healthy life. Do you dream of the exotic cars and the big mansions? Be realistic 95% of traders fail, so wake up and grind....dream only come true if you put work, effort and a good amount of sweat. The trading plan comes first and the excitement comes after. A good trading plan is one that you have researched, back tested on historical data, tested in a live market and continue to refine at regular intervals. It’s important to understand that your trading plan is not simply a set of rules that you "think" will work, or a list of set-ups that you only apply.
In conclusion, you must never forget the real reasons why you want to start trading. If the reason is one mentioned above, then aren’t setting yourself up for success. I would encourage you to write down your own reasons and review them.
VTL
