Would it be surprising to you if I said: In my first year of trading I lost money every single quarter, same thing happened the second year, and the third year (yet I’m still here!)?
Most people facing those results probably would’ve given up – that’s probably the reasonable thing to do. Afterall, the reason I started trading was because I wanted to make money, not lose money.
When you look at social media it’s easy to imagine yourself nailing it within a year, I personally know six people who managed to become consistent within a year and go full-time while quitting their jobs. But I have easily interacted with a thousand people over my five-year journey… That’s not even 1%.
Yet we expect to be able to go full-time within a year.
In my first year of trading I lost money every single quarter, and the second year, and the third year…
Focus on taking your time, there’s not a single way of trading, you can trade news, fundamentals, the price action, etc. But there’s not a single way to go, for example, if you trade technical analysis, you are able to trade support and resistance, Elliot wave, supply and demand, patterns, etc. I’m too lazy to write about all the different styles. You will have to try a lot of different styles before finding what works with you.
If you were building an e-commerce store you will have to try so many different landing pages, build an email list, find a way to utilize your email list to convert them into customers, figure out a way to transform them into repeat customers, test out loads of different ads and I could keep going.
Why would trading be so different? It will take loads of time and a lot of trial and error to move forward.
Focus on taking your time
Keep in mind that only 29% of Americans have a six-month cash buffer – and that’s the amount of cash I’d recommend you to have on hand before taking the step to go full-time on top of your trading account.
That means you’ll easily need to have around 2 years of living expenditures to go full-time (six months as a cash buffer and then the rest goes towards your trading account).
It will take time to build that amount of cash savings, so if you’re working or still studying understand that you will probably need to find a way to save more money but also that you will need to work for quite a long time before having the capital saved up.
If you enter the trading game telling yourself that it will take you three years to become consistent and five years before you are able to go full-time you will already have the right mindset. Take your time.
Focus on taking small steps every single day for instance: improving 1% every single day over the next five years you’ll become 80 million times better – and that’s why compound interest is amazing (even if I doubt you can become 80 million times better)
More realistically, if you find a way to improve by 1% per week, you’ll be 18 times better, and that’s a target you can achieve.
You will need to build up a large amount of savings anyway, and that will take time.
So don’t rush your trading
A lot of people blame their surroundings – for being negative and not supporting the dream. Yes, that may be true, but they are trying to protect you. They just see trading as a way to lose money, so be thankful, your friends are actually protecting you (in their own way)
You don’t need to convert all your friends to trading or business, I still have loads of friends working a 9 to 5 and I’m more than happy for them, because they love it.
Social media is a blessing (and a curse), because you can find loads of people on the same journey as you that are more than willing to talk and bounce ideas off each other while holding you accountable, so utilize it.
Find yourself a handful of full-time traders and ask them questions
Find other people that are at the same point in the journey as you are, and build relationships
Don’t blame your friends or family, they’re trying to protect you, instead take the step to reach out to others on the same journey and join communities of traders
The third key reason new traders fail is because they’re not willing to learn and pay a price to acquire a skill. You can either join a trading course, which in no-way will guarantee your succeed, or spend more time figuring it out by yourself and reading free content on babypips or finvids.
If you want to become a divemaster and go scuba-diving around the world for “work”, you will have to pay in order to obtain all the diplomas you need and all the dives you need to do to pass the exams. If you want to become a lawyer, you will need to pay for your university education. Everything you do as a cost, both in time and money.
By accepting the fact that you will lose money in the market for the first year or two will enable you to reduce your emotional attachment to the results you get and increase the likelihood that you will persist and see success in the future. Purchasing a course, will cost you money too, but if it shortens your journey by a few months is it worth it? I think so.
Accept that it will cost you money to become a full-time trader, the market will take a “tuition fee” from your account, and if you want to speed up the journey joining different trading courses may be worth it
Anyway, that’s my take on the subject, let me know what you think!