Ten Wrong Thoughts New Traders Have

Ten Wrong Thoughts New Traders Have


 Ten Wrong Thoughts New Traders Have

  1. “Trading is easy money, how hard can it be to just buy low and sell high?”  The learning curve is steep and the work involved is intense mentally, emotionally, and intellectually.

  2. “I have a few thousand dollars, I will turn it into a million dollars quickly.” The bigger the attempted return the higher the probability of going to zero by taking on huge risks trying to hit the big win. Compounding capital over the long term is what it takes to be successful taking big risks eventually takes your account down to where it breaks you financially, emotionally, or mentally.

  3. “I will just trade with all my savings and pay checks and take it out when needed to pay bills.” Trading capital has to be separate from living expenses and only taken from at times that will not effect your need to pay bills or play catch up with returns.

  4. “I am so smart I can figure trading out all by myself.” New traders must find educational resources that shorten their learning time frame and saves them thousands of hours by not having to learn everything the hard way themselves.

  5. “I believe I am so much smarter than most other traders and do not need to learn the basics, I will rely on my trading skills to overcome the need for risk management and my emotions.” No you aren’t and no you won’t.

  6. “I am a one many show I do not need anyone else for my trading.” Trading is a very isolating endeavor and it is very healthy to have trading buddies and mentors to help you feel connected and supported to others on your journey. They can provide support and guidance when they are the right people.

  7. “I expect to be profitable from the very beginning.” Like any other professional endeavor you have to pay our tuition for eduction and pay your dues. The odds that you will be profitable right from the start is minimal to zero, not blowing up your account as a new trader is an accomplishment to be proud of.

  8. “I expect to make huge profits my first year trading.” Grow up, there is no easy money laying around on the street for us to just go pick up.

  9. “I can trade huge position sizes and never blow out my account or suffer a huge draw down.” The math disagrees agrees with you, big trades eventually lead to big losses and big enough trades eventually lead to ruin.

  10. “I want to trade for a living, it will be great.” Trading for a living is very stressful if not planned very carefully with huge savings and safety nets. For most people it would take multiple six figure trading accounts or even up to a million dollars to even consider such a thing with their current lifestyle expenses. Very few traders live off trading alone almost all have other sources of income and trade for capital appreciation not their monthly bills.