Trading is about probability. To win at trading you need to put probability on your side, and like any other pursuit in life, the more knowledge and experience you have the easier it is.
However! Trading is different. Unlike some other pursuits it engages the two strongest emotions that we all have, Fear (anxiety) and Greed (desire). You need to understand that this is part of who we are, and this will be a huge part of your learning curve in being a trader.
This is why one of my favourite sayings is…
"Trading can be easy, but we make it hard."
Why isn’t making money on the stock market easy? Trading can be easy but we make it hard because we are human. It’s an emotional minefield, and trading will pull at every emotion in your body. One of my first trading teachers said to me that trading will find any weak emotion you have, and like a heat seeking missile, direct itself straight to your vulnerabilities with predictable results.
Markets are the representation of emotional animals. They represent the hopes, dreams and fears of all its human participants, and let’s face it, humans can be pretty stupid and unpredictable a lot of the time. They can be selfish, greedy and fearful, even if they don’t know it - and normally they don’t.
Your job as a trader is to be not too stupid, not too greedy and too paralyzed with fear - more often than not. Sounds easy, but its not, unless you know yourself inside out. It won't matter how intelligent you are,well educated or experienced you are in business, trading will chew you up and spit you out if you can’t be honest with yourself, recognize your emotions, and act accordingly.
We tend to trade according to our beliefs of life and ourselves, instead of trading just the market as it is. Recognising who you really are and and being truthful to yourself unlocks the confusion of why you keep losing or can't get ahead.
It won't matter how a good a system you have, or how strong a stock is. If you can't fundamentally or technically implement the methods of YOUR selected system, because of your unknown fears and desires, you will lose, nearly always by self sabotage.
"You will stay locked in a prison of confusion until you find the key, that key is the truth of how you think and who you are, and when you find the key, you might not like what you find."
Trading is about controlling risk so that when you do lose you only lose small, preserving capital to employ in the winners. If you position yourself correctly in the market the winners tend to look after themselves, but you must control risk.
Here is an interesting one: Statistically, home-based women traders do better then men. Sorry ladies, it’s not because you are more intuitive, but because you're more risk averse and security conscious, which is good for beginning traders.
Men have the opposite problem, they take too many risks, and too quickly, they often lose. Women and men need to learn from each other (surprise, surprise!). Men should be a little more careful and diligent and women a little more assertive and confident with their trading.
"We make trading hard because we are human, and you can't escape that fact. You can get around it the best you can, and that’s where I can help. You need an experienced person telling you the reality, not a salesperson selling you a get rich quick scheme."
Most trading courses sell the dream: “Learn from us, make heaps of money, live a life of ease, just trade daily and make quick money. It's simple, do our course and get the knowledge”. That's bullshit. Trading schools and market musketeers know what people want to hear, so they give you what you want. An easy fix. Most people spend their life getting what they want, even if it’s no good for them.
You must keep your trading simple and not too often, and avoid creating dramas. Doing risky trades is asking for dramas. Nations can create drama by taking risks in aggressive foreign policy. If you come home drunk to your partner and act unreasonably, you are taking the risk of creating a drama. Buy shares worth half of your entire portfolio in a volatile small company, looking for a quick buck via a daytrade, and you are also creating a drama.
"Some people love drama - don’t be a trader if you are one of them."
The purpose of this website is not just to focus on trading technique. Naturally it will contain some of the elements of trading you need. But it's purpose is also to focus on you as a person, developing your mind to be aware. And perhaps more importantly, to teach you not to stray from your system when the markets are challenging you, perhaps after a string of losses, or a drawdown in capital, or a lost opportunity. These are experiences that you WILL have, and how to emotionally trade your system or method once you develop or choose it is what you need to learn. Trading isn't just a numbers game, its also arguably the best self development course you will ever do.
"It will be easier with a proven system that suits your objective and personality"