I stumbled upon an online conversation between some “traders”, where they were discussing their trading frustrations and I realised that there are some basic reasons that are common to most new or aspiring traders. I just decided to quickly capture my thoughts on the subject.
They don’t have enough capital in their account and they are trading with money they can’t afford to lose. They also do not have any other steady stream of income as such, they are trading with “scared” money (money that they have planned for other uses, or other bills to pay). This affects their trading psychology because they cannot bear to take losses. And so, they don’t use stop loss and only exit a trade when it is too late, with unbelievable, irrecoverable drawdowns or total loss due to a margin call.
They don’t know anything about how the market works. They may have been taught tools to use, such as technical analysis tools, fundamental analysis tools, but they do not understand the architecture of the market and the market drivers. They don’t know WHY the market was created and the objectives of all the market players. Now technical analysts say that knowing why the market moves is irrelevant. This is true, but only when you have observed and watched your screens for a VERY long period of time, at least 5,000 hours, to have gained an intuitive knowledge of the market behavior.
Successful trading is about understanding why the market moves, how the market moves, when the market moves and where the value in the market prices is moving to.
They have not associated long enough with proven, successful traders. They only associate with struggling traders who have not mastered any edge in this market and are still using trial and error to research and stumble into consistent trading profits. Or they associate with marketers like brokers, introducing brokers, etc who are trying to get them to either pay for a course that has not been proven to have an edge or to fund an account and just practice till they become perfect. This is not the best way to become a successful trader. Very few people ever become profitable self taught traders on their own. That is like trying to teach yourself how to become a medical doctor or a pilot. The odds of you succeeding by teaching yourself or learning from someone who is struggling himself are so so slim.
To become a successful trader, you need to overcome these three barriers.
Let me show you how.
Yours in the quest for success and significance,
Olufukeji Adegbeye, CWM.