Are you one of those thousands of amateurs who want to quit their jobs to trade for a living? Let me ask you why. Why that idea is so appealing and resonate with you?
Let me guess. Most likely you think “independence”. That means no more stupid boss and no more boring tasks assigned by some selfish asshole who makes five times more for doing nothing. The idea of getting rid of a guy who makes your life miserable can’t be wrong!
Then you may say “more money”. In fact you look not for the money per se but for due acknowledgement of your efforts. Indeed you work hard and nobody gives you a credit.
OK, let’s not underestimate money. The idea of making thousands of dollars a day in trading and buying a red convertible Porsche sounds almost as good as winning the Powerball lottery. Anything else? You think trading is about living the full life in contrast to a miserable office plankton life you have now.
Now let’s talk about your dream and those alluring perks coming with a trading-for-a-living job.
Mr.Market will be your new boss who wants you to be on duty and glued to screens 24/7.
First, I would strongly encourage you to find “independence” in some other professional domain. You’re not going to get rid of a boss! Mr.Market will be your new boss who wants you to be on duty and glued to screens 24/7. If you trade stocks you may turn off you trading terminal on Friday evening but you will have to check-in on Sunday evening when futures start trading. If you trade crypto currencies you will not get any single day-off because they are traded non-stop.
You may say that you do not have to trade every day and you will be 100% accurate. The truth is the vast majority of beginners will be harvesting news, charts and gossips in thousands of trading chats even on Christmas night. They quickly get addicted. They are convinced that they may miss some great setup or invaluable insight shared by peers. So they should be there. What is even more important, they finally find people with the same interest in life. Those people are like them. They start to feel like they belong to that group literally leaving behind family and friends.
Will your new boss be more generous and caring? Will he be willing to pay you a fair compensation for all your efforts and time spent on reading trading books and quarterly reports, keeping a trading journal and hours of chatting with trading buddies? He wouldn’t give a damn! Conversely, the more time you spend on learning new exciting trading methods the less money you will make! The fact that professional traders consistently make money without subscribing to a magazine pitching new promising systems and indicators on a monthly basis looks totally unreasonable, controversial and unfair. But that is true. Professionals stopped searching for a magic indicator long ago. They stubbornly practice simple things like trend lines or staples indicators like MACD or RSI. They look for certain patterns that reliably worked in the past. And having practiced that approach for years professionals developed a trained eye that recognizes those patterns in a split of a second.
What about excitement of that business? Trading becomes a business if you do the same sequence of things again and again. Every day you run a scanner, find the same setup, use the same rules to define entry price, target price and stop. And execute trade by trade. Do I enjoy that process? Well it’s nowhere as joyful as tasty food or good sex. I would rather hang out on the beach or make a mile in a pool. Does that sound familiar? Does that sound like what you actually feel right now about you current nine-to-five job? Every hobby quickly loses its glitter when turns into a job.
Every day when the market closes you get a detailed perfectly quantified report of how good you are.
How would you feel if your current boss sent you a full daily comprehensive report describing how small you accomplished that day? What if that bastard attached reports of other people who did just great. Can you imagine how devastating that would be for your self-esteem? The greatest advantage of your current job is that you do not get those painful self-debilitating daily reports. However this is exactly what happens to traders on a daily basis. Every day when the market closes you get a detailed perfectly quantified report of how good you are. In case you think for a moment you did well you see numerous post from other traders who got lucky to make twenty or thirty times more for that very same day!
There is a funny paradox I can’t find explanation for. When you see your CEO getting out of a new shiny Porsche or CFO wearing a bespoke Italian suit you do not envy much. Because you do not compare yourself to that other upper social class. However, if you see a good trader bragging in a chat about his new sports car you hate the guy and yourself for not being able to trade that good.
Be aware that trading involves a lot of strong emotions. Now you dream about working alone in a calm office without necessity to talk to other idiots asking stupid questions and ordering you to do meaningless tasks. Believe me I know how it feels. When I worked at the position of CFO in a fast growing start-up I ended up hating every person who came to my office. Because every person came to get my approval for additional expenditures. And all CFO’s hate to give away money over budget!
In trading you do not have anybody around you to blame for your poor performance.
When you are by yourself you do not have idiots around you anymore, that’s true. And this seemingly advantageous situation becomes a huge problem! Because nobody else is left to blame except for yourself! Office crowds love to gossip about failures of colleagues. Because that makes them feel smarter. In trading nobody talks about his losses. Everybody brags about his or her winners. A friend of mine who tried to trade for a living kept humiliate himself and called himself a “loser”. In the end he broke his account and quit.
Finally, let’s talk about money, the most interesting part of the story. Yes, indeed, a good trader can make several thousand dollars in a couple of hours. Yes, thousands of traders can make your monthly salary in two hours. But majority of traders have winning and losing strikes following each other. This is a natural cycle. When on a winning strike you start feeling overly excited. Your ability to analyse the market got affected by your strong emotions. And you start making costly mistakes. Once a year every professional trader makes some horrible mistake that wipes out significant part of accumulated profit. Imagine, you make one unfortunate trade and you give away everything you have made for several month of hard and risky work. Now compare it to safety of your current working environment. Your boss can’t come in December and get back all the checks for the preceding eleven months. And you are guaranteed to get another check at the end of month or even after every two weeks.
Don’t think that the main problem explaining your poor results in trading is lack of time.
In conclusion, chances that you will love your new full time trading job in twelve months after quitting your regular job is slim to none. Don’t think that the main problem explaining your poor results in trading is lack of time. I regularly travel and still do trades. It takes me an hour a day after close to identify several high probability scenarios. Then I just enter my orders into the trading terminal and go out to explore a new city and make stunning pictures. And I noticed that this style of trading makes even more money than an active trading with my 100% involvement. The main problem is that you have not developed and practiced long enough your personal trading tool box.
My advice to you is to keep dreaming about a trading career. Do not give up that dream! At the same time appreciate what you currently have. Your regular paycheck creates a safe learning environment. It makes possible for you to learn and practice trading not caring about making money every day. Use that time efficiently! Pick only one trading method and dive into it. Become an expert in that method. That will help you to enjoy the journey and make a road to mastery straight and short.