By Rob Colville on August 24, 2017 in
Not everyone is meant to be a trader. Not everyone can handle the lows as well as the highs, and not everyone can deal with the fact that loss is going to happen. If you are trading because you think it’s a get rich quick scheme that will see you rolling in cash before the day is out… you won’t get too far. This is one of the first things that needs to be learned when it comes to trading. Trading profitably includes losses – as strange as that may sound.
Throwing money at renting a posh office or buying a massive screened, top of the range computer is not going to help you when it comes to trading profitably. Just like a builder blaming their tools, blaming the fact that you haven’t got the right place to trade from or the fastest processor is simply denying the truth – the fact is, where you trade from and what you use to do it are far less important than understanding what trading is all about. Trading profitably is obviously the best outcome in trading altogether – but it won’t come easy (and that’s why it’s not for everyone).
You can throw all the money you want at flashy premises and equipment, but unless you know how to trade to start with, it will all be for nothing. Trading profitably means you can buy that stuff if you want to – not the other way around.
In order to make sure you are trading profitably, you will need to take some risks. But they must be calculated risks. Simply going out on a limb and placing a trade that is completely different to what your chart suggests because you ‘have a feeling’ about it, or want to live dangerously will generally mean just one thing: you will lose money. And very possibly too much money; when people take a risk, it’s usually a big one.
The thing is, this need to take a risk is a very human trait. It’s ingrained within us and goes back millennia. But it’s not required in this day and age. Knowing your charts, knowing what trading profitably really means to you, that’s the information you need. When you have that, nothing else really matters. Fight the urge to be risky and you’ll find that your trading is much better for it (and so is your bank account!).
One of the biggest mistakes that new traders make is trusting their luck rather than putting in the groundwork and learning how trades really work, not just in general, but specifically how they work for them. The key to trading profitably is having the information beforehand – not working it out as you go along.
If you do want to use this method – the ‘learning on the job’ method – then be prepared to lose money. If you are happy with that, and this is the way you like to learn, then go for it. But we recommend hitting the books, and speaking to the experts, first. Get a good grounding before making your first trade. And when it comes to trusting your luck and not learning in any fashion at all… well, that’s how would-be traders end up failing. Trading is not like playing the lottery – it is possible to win with the right information to hand.