As with most new traders, they have lofty goals, and high expectations, usually in short periods of time. So, your goal of completely quitting or leaving your job in 6 months is definitely possible, but it will be VERY challenging. This is not an easy business. I want to put that on the table right away…This is a difficult journey, but I assure you, if you stick with it, stay disciplined and listen to advice, the rewards will FAR exceed the challenges, and the upside potential to this business is enormous!
Many people begin trading without a proper business or trading plan. They think they can just take a seminar or open an account and start trading and make money in no time. The 2 biggest mistakes that people make: They are UNDER funded, UNDER educated. (and OVER ambitious, and unrealistic.) If you started a subway franchise, would you only give yourself enough “back up or safety” money to last 1-3 months? Probably not, because it costs over $200,000 to open one. Therefore, you’d probably take that investment very seriously, because there is a lot to lose. Well, with trading, people don’t seem to take it as seriously as other businesses. I’m not sure why…Perhaps because it’s “just” money. Whereas with other businesses they have “product” or brick and mortar buildings etc…
The second mistake that most people make is: unrealistic expectations and NO plan on how they will meet those expectations. It’s easy for someone to say, “Within 2 years-time I would like to be making $10K per month.” The problem is, they have no PLAN/MODEL/METHOD on how they are going to achieve that. To get a loan from a bank to start a business, you need a “business plan.” So, why should trading be any different?? It’s not. But most people only answer to themselves, so they over-look these crucial areas. When you work for someone, they tell you when to come and go. They tell you your salary, and they also decide if you stay or get fired. No one in this business will do any of those things to you. You have to monitor yourself. Many people can’t handle this. They simply lack the motivation and/or discipline to be successful without someone telling them what to do, and when to do it. This business is tough, and it takes massive amounts of patience and self-discipline to succeed. With regard to expectation, it’s always better to keep your expectations within reason. If you exceed them, great, if you don’t, then you’re where you thought you’d be anyway. (But if you want to make $X amount of money in X amount of time, and you don’t hit those goals, then you’re not gonna feel so good.) I always tell people, if you really want to be successful in this business, give it an HONEST 2-4 years or more. Who do you know that is a master at anything after 1-2 years?? Not too many people. So why are you or I any different? We need to stay grounded, and focused on the challenges ahead. If you do those things, you will make more money than you can imagine. If you don’t, you won’t be around in 6 months. I’m not being harsh here, these are the facts! Discipline and Patience. Without them, success will elude you. One last point…no matter what happens in this journey (success or failure), it’s 100% YOUR FAULT! We don’t blame other people or the markets for our failures or successes! Take personal responsibility and you will do well.
If you are not yet profitable, then why would you be risking $250 per trade?? It’s just gonna cause you to lose more money. New traders should be paper trading for AT LEAST 1 month. Then you can start out at $5-$10 risk level. No more than that. A good trader at a $100 risk level can easily make $5K per month, sometimes upward of $10K. So, there is no reason to risk more then you have to. The goal is to make as much as possible with as little risk as possible. Then when you get better, you EARN the right to raise you risk in $25-$50 increments. This is not a fast process. It’s slow going. Anyway, you should be paper trading for now, until you can prove to yourself or me, that you are profitable!!! As with most people, they don’t want to paper trade…but the smart ones will. You don’t have to heed my advice, but it’s your money that will be lost. Preservation of capital is extremely important. Don’t bust up your account before you learn how to trade. In terms of batting average, 75-80% is a very good goal to shoot for, but right now, just try to get to 50-60%, but make sure you are letting your winners run. A lot of money can be made with a 50-60% BA. It’s true that many of the moderators have a 70% + BA, but they also have A LOT of experience. So, it’s a great goal to shoot for, but do it in baby steps. Take it slow, the market will still be here tomorrow, next week, next month and even next year!! Don’t let your expectations exceed your experience. Be smart, use common sense and always control risk as your #1 job!
