It’s funny when you start talking to people about their beliefs around trading. On one extreme you’ve got those who think they’re going to buy some trading system or advisory service and instantly get rich trading with virtually no experience. And on the other extreme you’ve got those who think that 95% of traders lose money and of those that actually make money, it took years of torture to make 12% a year or something.
Now I understand why the first group would want to try trading. After all, I was one of those people when I started. Who doesn’t want an easy way to get rich? But I still haven’t figured out why anyone would spend thousands of dollars and years of their life for a 5% chance to make 12% annually on their money. If that’s what they truly believe I would think they’d have better ways to spend their time.
Of course both of these views contain some truth and some fiction. If you look at the statistics, it is true that some people with little experience have made fortunes in the market but it usually isn’t through some magic trading system. It’s more much more likely it was dumb luck combined with stupid risk. As they say, it’s better to be lucky than smart.
It’s also true that a vast majority of traders lose money but that’s not because trading is so hard. It’s because trading has such a low entry threshold. In other words anyone with a few thousand dollars can buy a course, open a trading account and start trading. And just like any field that has a low entry threshold such as network marketing or sales or many small businesses, 95% of the people doing them do not have the proper training, experience, education or working capital to be successful in those fields.
Think about it. How many people would make it as successful surgeons if all you needed to do to become a surgeon was to have a few thousand bucks, rent an office, buy a few tools and have at it? Not many. Even if they read a bunch of information and took courses, it’s still very, very unlikely a surgeon would be “successful” without years of training and supervised experience.
On the flip side how many traders would be successful if they had to go to college for 7+ years, train as an intern for several years and then be closely monitored by a professional, successful trader before going out and trading on their own? I would argue that the success rate would be pretty good.
So how do you become a great trader? It’s simple; you understand the things that 95% of the people DON’T.
Understand that trading is a serious career where you can make serious money. And just like any other serious career, success doesn’t come in a box or a course nor does it happen overnight. In fact, as with any worthy venture in life, it takes an estimated 10,000 hours to become a master at trading. Yes I said it will take about 10,000 hours of study, training and practice for most people to become a master trader.
If you do the math, that’s approximately 40 hours per week of studying and practicing for 5 years. And not just any practice. The study and practice must be focused and directed on a singular type of trading.
Jumping around dabbling in one style trading after another doesn’t count. If you were training to be a dentist and half way through school you decided you’d rather be a cosmetic surgeon, much of your previous study is irrelevant. In the same manner, every time you switch trading styles much of your previous training is irrelevant and you’ll need to reset the clock.
Now before you get too discouraged, you don’t need to be a “master trader” in order to be a profitable trader. With the proper tools and mentor to guide you, profitable trading can be had quite quickly and then with focused study, practice and experience mastery can follow.
I said it was simple, not easy:)
So if trading is your thing, it’s time to stop looking for next best thing, focus your attention, and get to work.
For more information on becoming a successful trader, visit www.lockeinyoursuccess.com
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Great reminder for sure. Thanks for your perspective John!