Seven Deadly Mistakes - Part Five
By now you might be thinking that this trading business requires somewhat more effort than you first thought. And you would be right! In fact, that's the subject of todays lesson.
Mistake Number Five - Not Putting In The Required Effort
It's a strange phenomenon that seems almost unique to the field of internet trading; people believe that they can read a book, open an brokerage account, and start making huge amounts of cash just like that.
I used the analogy of an airline pilot in the last article, so lets continue with that theme here. Not many people would expect to decide on Monday that they wanted to fly long-haul airliners, buy and read a book on the principals of flight on Tuesday, and start work as a Captain on Wednesday. But with trading, such a short learning curve appears to many to be perfectly expected.
Whilst I certainly agree that, proportionally in relation to other activites day trading can provide much greater returns for much less effort, it nonetheless does require some effort to get going.
Trading, like any other skill, takes time and commitment to learn and become proficient. However, unlike many other skills, that time to become sufficiently adept need not be costly, or at the expense of existing obligations. In other words, a novice trader can learn the markets and practise their trading whilst continuing in their day-job, and without significant outlay.
Indeed I would advise any would-be trader to have a steady source of income when they start out. The absolute need to generate a profit can have a hugely detrimental effect on trading decisions.
A problem a lot of student traders I work with have is that they start out with a healthy dose of motivation, but when the going gets tough they start to lose interest. Suddenly it becomes too much like hard work. The first losing trades make for a powerful reality check. Motivation goes out the window, and plans to quit the day job are quietly forgotton about. Part of this problem is down to unrealistic expectations at the outset, and part is due to a lack of accountability. In a regular job, we're normally answerable to someone. If something doesn't get done, there's usually someone higher up the food chain ready to kick our butts.
When we're trading our own account, that concept no longer exists. We're only accoubtable to ourselves. For many people that's a first. The solution is to get back to that written trading plan. If the plan has been well thought out, it will include the all important mission statement, and perhaps a set of attainable goals. Re-reading these every day will help reinforce self-accountabilty and motivation.
Trading isn't difficult (something I'll talk more about in the next article), but neither is it an instant source of riches there for the taking. Like anything worthwhile, you get back what you put in. The difference between trading and other activities is that once you have mastered the skill, relative to the amount of time you spend "working" you will get back much more more than you ever put in!
Harvey can be contacted via his website, where you can also read about his day trading course