Obstacles are part of life
It’s important to have obstacles and challenges when you’re learning something new. Hockey and soccer wouldn’t be interesting games unless the players had challenges to overcome.
You’re going to fall down, maybe even scrape your knee when you’re learning a new sport. The same is true when learning something new, like trading stocks. You’ll fall down and have some failures before you’re able to be successful.
Obstacles will come your way. If you can recognize or foresee what struggles you might have in the future, you may be able to push further past those obstacles.
If you can recognize these 3 main obstacles, you may be able to get through the growing pains of learning how to be a successful stock trader.
1. Putting the time and energy into learning how to trade properly
When the going gets tough, the tough get going. Unfortunately, a lot of people just give up when things get difficult…we don’t like to hurt or feel failure. To be a successful stock trader, you have to put in the time and the energy, even when you don’t feel like it.
This business is brutal. It will hit you upside the head and leave you spinning. It’s the one business where you can fire yourself and re-hire yourself all the in the same day!
Think about going to medical school – when you first start studying pre-med, all the terminology, all the techniques and information are new to you. You have to learn how to stitch, how to measure things properly, how to diagnose and treat, and so on.
The same is true with stock trading. You have new terminology to learn, like applied volatility or breakaway gap. It will be overwhelming at times. Just like med school, it may take you years and years to complete your education… to really understand what you’re doing and be able to trade successfully.
2. Doing your own homework
This is a bit different from just putting the time and energy into learning how to trade. Most of us want to be told what to do – we want someone to affirm our choices. This is why we ask our friends, family and spouses, ‘What do you think? Should I get this dress/watch/laptop/washing machine?” We search for meaningful input from the people in our lives.
Likewise in the trading world, we want someone to tell us which stocks will be profitable and when to bid and when to exit. We turn to websites and blogs and financial shows to tell us what to do and when to do it. The problem is, you can’t be consistent if you don’t understand things for yourself.
There is no specific system that can tell you in an exact moment of time how many shares to buy at a certain price from a certain company with a certain specific exit strategy or plan. You have to do your homework. The person on TV won’t be there to tell you when to sell or when to take profits.
I’m not against signing up for newsletters or reading/watching certain financial information as a beginner trader. Most importantly, make sure you relate to the trading style. Do your homework here too – read their books and check out their seminars. Make sure you understand why they recommend a certain stock before you buy it. Otherwise you will get burned. You have to take things into your own hands.
- Do your homework.
- Take responsibility for your actions.
3. Understanding trading psychology and the inner game
Most people don’t understand that there are two parts to trading psychology – the inner game and the outer game. The outer game is the technical analysis, the volume, the terms – it’s what’s happening in the market. The outer game is about learning the stock market.
The inner game is the psychology behind trading. It is emotion management – being able to admit you failed or were wrong, dealing with fear, not getting overly impulsive. The inner game helps you manage the ups and downs that happen both emotionally and financially.
If you’re interested in learning more about the inner game Trader Transformation. It’s the inner game that tends to trip early traders up. You have to be willing to be open and honest with yourself – and be willing to make changes to avoid making the same mistakes.
Never give up
If you can foresee these 3 big obstacles, you’ll be able to get over them much easier. The key is to not give up. Keep going – believe that you can do it and you’ll be able to keep going when the going gets tough.