Trading has all the cards to seem very easy from an external point of view: all you need is a computer, and you can get rich by comfortably sitting on your sofa. Unfortunately, however, the reality doesn’t quite correspond to this ideal scenery. The trading activity implies a lot of daily struggles and pains, and we have summarized the 10 major ones for you.
1. Trading needs a lot of preparation before getting started
Truth is, you can’t just sit on your couch and wait for the money to get into your wallet. Before you start seeing some return, you need to make a few investments, not only in terms of money but mainly with regards to your time and of your efforts.
You need to carefully study the markets, choose your target companies, analyze the trends of the historical data and try to forecast what the future holds.
2. The amount of information to collect and digest is enormous
Your analysis can’t be limited to your company, though, and needs to expand towards the whole market.
This means that you also need to study your company’s competitors, the main ones as well as the newcomers into the sector.
3. The market needs to constantly be monitored and sometimes your strategies might require to undergo major changes
The market can change as we speak and we might be required to change our plans on the spot.
Preliminary research is extremely important but, unfortunately, it is not enough. The information you collect have to be updated and you mainly have to keep your eyes everywhere to be aware of what is going on.
4. Lots of patience is needed to wait for the right signals
You might want to follow your instinct, and you might do so at the beginning, as it seems to be the easiest way.
But what happens once you realize that, if you base your strategy in your faith about the future, your trading career won’t last long?
5. The fear of losing can greatly affect your decisions
Losses are hard to accept and harder to overcome. How to take decisions freely anymore, when the mistakes you made in your past are stuck in your mind and affect the way you’ll read the signals in the future?
6. Uncertainty towards the future is the feeling that most affect a trader’s mind
In trading, every move you make might be either the best or the worst decision you take in your life.
Every transaction could either bring you a great amount of money or a terrible loss.
Trading successfully requires you to have the calmest nerves, but at the same time puts a lot of pressure on your shoulder. You are starting to realize it’s not exactly as easy as you thought, right?
7. You might think about asking help to a third party, like a broker. But which one to choose?
You might find a lot of people offering their assistance. But how do you choose the right person? What does this choice necessarily easier than the one of the right company to invest in?
8. Scams, fake gurus, and inexpert brokers
Someone might lie to you and take all your money. Someone else might have good intentions, but not as good expertise in the matter.
9. Consecutive losses can have negative psychological effects towards your mind
You might feel stressed and nervous about all the money and time that you have lost. Once again, how to keep your nerves down, knowing that you might lose again
10. Admitting you were wrong and move on it’s probably the hardest challenge of them all
A good trader needs, with time, to learn how to master his feelings and move on. He needs to forget his mistakes but also learn from them, in order not to make them again.
This last point, in particular, represents a great challenge for our human nature, and it actually can be even harder than acquiring all the knowledge and the technical skills of a trader.
We really can’t hide our human nature and “turn off” our feelings of fear and sadness, as we are not machines.
We are not a set of algorithms, but the good news is, we can make good use of some.