We’re always in a rush these days. There’s too much to do and not enough time to do it. That’s the credo most people live by during these uncertain and stressful times. Many novice traders feel pressure to succeed in a relatively short time. It’s common to hear of a trader who after only a few months turned a small trading account into a fortune. Although it’s possible, such an accomplishment rarely happens.
Most novice traders take years to become consistently profitable. In the end, we all come into trading with our own life experiences, our own skills, and our own resources. You can only do so much with the resources you have available. If you try to do the impossible, you will feel disappointed, and you’ll probably give up too early. It is vital to closely examine your resources, develop realistic objectives, and take the necessary steps to achieve your goals.
Trading is a business, and as with any business, success depends on the amount of startup capital you have available to invest. Consider a simple example, in the last two weeks, General Mills went up from $40 to $42 a share. If you had purchased only 50 shares, you would have not been able to profit from the price increase. It wouldn’t cover commissions and expenses. But if you had purchased 1,000 shares, a simple buy-and-hold strategy would have yielded about $2,000. Adequate startup capital is essential. The more you have, the better. Yet people differ in how much they have available.
Some people may have inherited a sizable sum to invest; others may have sold a business for a hefty profit; while other traders may have to save up small amounts of capital from each paycheck. How one accumulates trading capital doesn’t dictate who can and cannot become a profitable trader. But you can see that some people are going to be able to trade profitably more quickly than others based on their account size and the amount of risk they can take on with a larger trading account (assuming that risk is managed carefully).
In addition to capital, each person has different life experiences and personalities. Some people have experienced a great deal of success in life and they bring these experiences to trading. Similarly, some people can take risks in a carefree way, without worry and self-doubt. Having these personality characteristics will allow some people to master the markets more quickly than others.
Trading is challenging. Several prerequisites must be met to trade profitably and consistently. People differ, however, in terms of how long it may take them to meet these prerequisites. Some people can meet them easily, while others may need to spend several years trying to amass the necessary psychological and financial resources.
That said, it doesn’t make much sense to feel a need to master the markets quickly when you aren’t ready. Novice traders who try to trade without meeting the prerequisites usually fail. Don’t feel the need to succeed as a trader more quickly than your resources allow. Becoming a consistently profitable trader takes time. And the amount of time depends on your resources, so take it easy on yourself. Don’t put unnecessary pressure on yourself. Master the markets on your own terms and at your own speed. Eventually, you’ll achieve lasting success.