Trading is a tough business. Less than 5% of those who attempt trading realize enduring success. With those odds, it’s not surprising that novice traders feel they must devote 100% of their time to trading. Learning to trade requires focus, dedication, and persistence. You aren’t going to get very far if you view trading as a hobby that you can master in your spare time.
There comes a point where you need to treat it like a vacation, a calling where you have to hone your skills until profits come naturally and effortlessly. That said, the quest for profits must be tempered. Trading lore is replete with stories of traders who put in heroic efforts to amass great wealth only to give it all back out of quiet desperation. Make sure that you take psychological steps to ensure that once you achieve profitability, you’ll be able to maintain it.
Trading consistently requires discipline. One must control his or her emotions, and learn to think logically. Trading plans must be clearly specified and one must stick to the plan. An impulse to abandon the plan must be subdued. An impulse to trade larger positions to make greater profits more quickly must be restrained. In addition, learning to trade takes time, and that may mean limiting social activities and other forms of pleasurable entertainment. Some people are naturally monastic.
They may also tend to be detailed oriented, logical and austere. Although this is the ideal personality style for a trader to some extent, most successful traders don’t start out this way. Disciplined, over-controlled types tend to dread risk and have trouble pulling the trigger in the end. Most seasoned traders, in contrast, have a strong desire for success, and the pleasurable rewards that go with it. Eventually, the winning trader learns to rein in and control emotions and impulses. But it isn’t natural. It takes practice, self-control and determination.
All traders must eventually learn self-control and discipline if they are to achieve lasting profitability, but it’s vital for long-term survival to know the proper way to maintain discipline. Some novice traders overdo it. In a blind ambitious quest for profits, they devote all their time and effort to making money. Although this strategy can lead to initial success, eventually, it tends to also lead to failure. Many traders make the mistake of not thinking through their life decisions to pursue wealth.
They usually seek out wealth because they view it as a solution to all the problems of life. However, wealth rarely solves one’s life problems. That’s something that must be done beforehand. It’s vital to think of the big picture. What are you going to do with the profits once you get them? Similarly, how long can you live a life of austerity and self-denial before you burst out in a binge of reckless pleasure-seeking? It’s better to make plans right now. Don’t put it off. Realize that you can only show self-restraint for a limited time.
Be prepared to take breaks; take off time to spend with your family and friends. Don’t think that you must devote your entire life to trading. Cultivating balance between work and pleasure will produce rewards in terms of your overall morale. If you ignore this issue, you’ll eventually start trading impulsively and emotionally. It’s also essential to make plans for what you will do with your profits once you achieve them. Devise meaningful ways to spend your profits.
ou may want to spend your profits on your family and friends or donate some of your winnings to charities that you find personally meaningful. Whatever you do, make sure that you are fully aware of the reasons you are trading and have a clear idea of the big picture in terms of how your newly acquired wealth will benefit you, your family, your friends, or society as a whole. Cultivating balance and deciding how trading can add meaning to your life will not only help you achieve profitability; it will help you maintain it.