Hi guys! Is trading for everybody? No!
No, because there are some obstacles.
I’m not claiming trading is the most difficult job in the world.
Who works in the industry might have noticed that in office groups of employees claim that that company is the most challenging in the world. The way you work there nowhere else, people can’t realize the level of stress you suffer in that specific company.
The point is that this is normal…the same thing in different companies so either they are all the most challenging or this is sort of a mindset of most of the people and I’m not here claiming that trading is the most challenging thing out there, but it is challenging.
So there must… there are some professions which are much more valuable much more difficult and with many more obstacles than trading but still trading has some obstacles.
The first obstacle is psychological because if you know that you can’t stand losses or even big gains because once you see a big gain you lose your capability of making the good choices for your positions then obviously you have some problems.
If you can’t cope with losses because you really feel bad, it’s not the profession for you.
It’s like if I were not able to speak in public and I would become a theatre actor.
Okay, I mean, obviously there are some obstacles some problems, maybe the profession of becoming an actor in theatre helps in overcoming my limitation in speaking in public, but still at the very start of my choice there are some problems. The same is in trading! Trading has some additional problems at the moment when people look for an act of revenge for losses.
People trade to make the money back, they fight against the markets because they want to make the money back they lost.
They feel guilty for mistakes they think they made or they really made, so they start fighting against markets. This is a very wrong attitude because obviously, you can end up losing more money than you’ve already lost because when you fight you are no more lucid enough, your mind is working in a wrong and bad way to make the right decisions. So obviously these are all psychological issues that cost money and that’s the measure of your success in trading, money!
So actually, if you have some psychological…I might say weakness but is not necessarily a weakness.
Psychological mindset, towards losses and gains, then probably trading is not the right thing for you.
The second practical obstacle is money. You need money to trade!
I often said that those claims of incredible performances are scams most of the times so you cannot think to start trading with a thousand euros or thousand dollars, ok?. You can do it as a hobby but it will never be your job because, if you make some maths, you understand that you will never make enough money to live and you cannot make a living out of it.
So I said sometimes on… especially on automated trading, fifteen, twenty thousand dollars are a minimum starting point to think about it as something more than a pure hobby.
With less than that you can do it, no problem, but you have to consider that if I said thirty percent a year, that was optimistic, let’s go down, let’s say 10% a year okay? Let’s imagine you can achieve 10% a year.
It’s up to you now to make your math and to understand how much you need on your account so that, that 10% is enough for you to live. And consider also that, especially in automated trading, you have some additional costs sometimes, like the platform not always it’s free, has a cost.
Data feed has to be paid, if it is a quality data feed may be a cloud server to place everything on. So these are all costs that you have to pay.
You have to think if these are fixed costs, variable costs or one-shot costs or repeated costs. All these things have to be put into your balance sheet and you can then easily calculate how much money you need on the account to trade.
The point is, that the industry does not open your eyes on this because I understand that there are not so many people out there capable of putting twenty thousand dollars on the trading account with no thoughts.
I mean I have this extra twenty thousand I can put them there. Extra! Because if you have twenty thousand dollars, and that’s all you have, don’t put them in trading, please!
So obviously knowing that there are so many people you keep out from your offer is something people don’t like to do so I prefer to let you think that trading is an incredible source of income rather than telling you: “Be careful because it’s not that easy!” Because I would lose a lot of prospects.
But I want to tell you the truth, so trading is not for pockets of everybody.
So you have a psychological obstacle this is something you can overcome with proper training. I’m not selling this kind of training, so I’m not promoting anything here.
There is also a practical obstacle which is the money you need to start doing it in a way which is more than a hobby.
It’s fine if you consider it a hobby, absolutely fine, but when you think of it as a profession, as a job, then obviously you have some starting point you have to think about and these are not something that you can simply ignore hoping to make enough money so that they disappear.
That’s it, I know this might be disappointing for many of you, but it’s important so that you start with right concepts in your mind if you want to go on and think about trading.
Ciao from Andrea Unger!