Trading As a Career Choice - Part 3: Attitude

So, this is it - the last part of this series for those who want to choose trading as a career. If there is a phrase that I could come up with to signify proper trading in its emotional form, it would be “a healthy attitude towards speculation”. As you know, trading is hard on so many levels. You are required to have 100% discipline in whatever you are doing when you’re plugged into the market. You have to be patient for the right opportunities; you have to cut your losses short, you have to let your winners run, etc., etc. All these sound so simple, but in order for these lessons to be truly imprinted on your soul, you have to go through almost countless market experiences to understand why such simple rules are so important.

Unfortunately, for many participants – they cannot accept these simple rules, which is why they’re often out of the business before progress starts to take root in their trading. For almost the same number of participants, the market will forever remain an unsolvable Rubik’s cube – always changing its path of solution with every desperate tweak the trader tries to make.

Trading is formless – it is an exercise in perception and most importantly, how you approach risk according to your perception. This is not something that you’ll be able to attain within a month or even a few months; this is something that is developed and nurtured. This is where the concept of patience comes in.

I know, it’s quite uncommon especially given the way trading is portrayed in the movies. Patience is having the ability to learn through many, many failures and still keep yourself sane. There are very few traders who make money right from the beginning. The more common result is a trader losing money, then losing less money, then losing a little money, then making a tiny bit of money, etc.

When I first started trading, I was the worst trader in the world. It was so bad that some of the other guys that were trading with me took my intuitions and used that as a counter-indicator! That’s how bad I was. It was tough – really tough, but I hung around because I was determined. If I’m gonna live in a straw hut for the rest of my life then, so be it! As long as the money to make that straw hut came from trading then I’d be satisfied. In truth, speculation is almost all mental. It’s you against you. You are your own worst enemy and that’s why you must have an attitude that will allow you to accept your fallibility with the inevitable losses while keeping the wins in perspective. Ok, so you’re a winning trader and you want to know what I’m talking about when I say to keep wins in perspective. Basically, in the world of speculation, we’ll all be either losers or winners at some point.

However, because of the way markets are markets and how we perceive them, there’s never any guarantee that we will be profitable forever. There may come a time when after a long string of decent income, your strategy just fails to work. Suddenly the losses start piling up and then…..that’s it - Margin Call. Nothing left in the account. In trading, losing and winning are so closely tied to one another.

Being a trader is not all about the champagne celebrations and the expensive cars and restaurants. Being a trader is accepting the fact that you’re pretty much out there on the edge and at any time, you could just fall into that deep abyss. Do you ever wonder why so many of the big traders profess their humility? It’s precisely because they know what can happen at any point in their trading careers – as quickly as it can turn on, it can be flipped off like a light switch. Even these days when I have a better control of myself in the markets, I still get a little nervous knowing that it’s more than just my money on the line. So I respect the market. I respect its power to give independence, but I also respect its power to beat me like a filthy rug.

The only thing that we can do is make sure that we are not recklessly gambling with our capital. Sure, it’s fun to shoot from the hip at times but I’ve seen too many people give up all their gains and then some through this strategy. Yes, it’s sexy and it gives off that intoxicating allure of coolness but believe me, after a string of huge losses, you won’t feel so cool. Once you get infected with those feelings of despair and fear, you’re trading account’s days are numbered – in low digits.

With that being said, let’s go back to the sunny side. You must really get the attitude into your head that your trading career will be filled with quite a few bumps as you progress. You will not be able to master everything in a few short hours. You will have to enlist the help of mentors, free seminars, books…anything that can give you more knowledge and insight. This is actually my least favorite part of trading for a career; I will go to the local bookstore once a month and read up on the various trading magazines that are out there to see what new software programs and what new trading ideas are out there. It gets to be tedious but you have to be abreast of industry news if you are to be competitive. I probably would not have found my present broker today had it not been for me reading through the magazines. Furthermore, I was able to gain valuable insights into some of the minds of top traders like Grace which ultimately helped me become a better trader.

The key thing here is that you have an attitude of immersion in this job. If you want to give your all, this is the way to do it, along with having a respect for the power of the capital markets. Happy Profits!

Subscribe by RSS Subscribe by Email