this opportunity. Many find out to their financial detriment that trading did not suit them.
So, how can you know in advance? This quick guide will walk you through whether trading is a good fit for you.
- You can handle an inconsistent income: A large part of the reason most people find employment is because it provides them with a steady income stream. They need to know when and how much they’re getting paid.
How to know if Trading is the Right Career Path for You?
When you trade shares or other assets, you will not only be sacrificing this steady predictability but may have to endure lengthy periods of losing money before a big win makes it all back and then some. Even if your losses are small enough that you don’t run out of money, this experience is one that many people find incredibly mentally difficult.
- You understand that you’re not going to get rich quickly: No matter what those influencers online say, piling all your money into any single trade is not good trading. Borrowing money to do that is even worse. Just because it might work out, this does not make it sensible.
The best traders focus on staying in the game rather than getting rich quickly. They divide their money up into small amounts and invest it in lots of different ideas so that they can never lose too much at once if they are wrong. This also means that no single trade will make them a fortune, but in the long run the average profits earned by traders who do this will be greater than those who invest large amounts in fewer ideas.
- You are comfortable being uncomfortable: Even the most cursory reading about the psychology of trading will reveal that the instincts of the vast majority of people are to act in the complete opposite way to a successful trader.
For example, most people intuitively prefer to make small amounts of money by being right often, but many successful traders do the opposite. They use strategies which lose money more times than they make it. They end up in profit because they lose a little when they’re wrong and make a lot when they’re right.
Most people also have a tendency to become arrogant when they have a successful run. They increase the size of their trades and often end up losing their profits. Somebody ready to be a trader needs to have the discipline to avoid these traits.
Trading might sound like an easy way to get rich while sitting at home, and many people try to push this perception online. However, the reality of trading as a career can be different. Thinking carefully about these three tips will help you decide if it is the right path for you.
