Are You Willing to Pay the Price?
HA! Made you click!
If you really thought there actually was a way for a lazy forex trader to get rich, SHAME ON YOU!
No such thing exists. The word "lazy" and "trader" is an oxymoron. You have to be willing to pay the price to become a trader.
Which brings us to our next lesson....
So, you’ve gone through the School of Pipsology…five times, learned basic analysis and money management techniques, and maybe even opened up a demo account and started trading a plan you’ve created. (You do have a trading plan right?) Now you can sit back and relax because it’s easy money from here on out, right?
Wrong!
You’ve just taken the first step.
You’ve only familiarized yourself with the very basic fundamentals of what it takes to become a professional trader. Now it’s time to get on to the real work.
I’m sure you’re now thinking, “There’s more to learn?!”
Well, my friend, the learning never ends.
As with any profession, whether you’re a doctor, lawyer, athlete, assassin, spy, ninja, ultimate fighter, musician or any other occupation that requires a high level of skill, you can never stop learning and practicing. Otherwise, your skills will deteriorate and you’ll slowly forget what you’ve learned.
This lesson will give you a peek into what it takes – education, time, money and psychological stamina – to enter the most financially rewarding career on the planet: a professional trader.Education
Imagine yourself in a legal situation and you decide to hire the cheapest lawyer you can find. On the day you have to stand in front of a jury, your lawyer says to you, “Don’t worry, while this is my first time, I’ve read ‘How to be an Awesome Lawyer in 28 Days for Idiots’ a couple of times, so I know what I’m doing. You’ll be fine.”
Do you think your investment in that lawyer will pay off?
Probably not.
You’ll probably end up in prison with a tattoo covered cellmate named “Killer” for the rest of your life.
Now I’m not a professional lawyer, but I’m pretty sure that it takes more than one book to become one. More likely, lawyers have read and studied a wide range of books, journals and case studies in order to fine-tune their practice. So why should it be any different to become a professional trader?
Trading involves becoming proficient in a multitude of disciplines, including fundamental analysis, technical analysis, sentiment analysis and self-awareness (also known as trading psychology or what I call “mental analysis”).
Within those disciplines are different topics that should be studied individually.
For instance, while the School of Pipsology does a fantastic job of introducing the Elliot Wave theory and making it easy to understand, there’s abundant amount of entire books written on that single subject. The same thing goes with many other technical tools (i.e. candlestick charting, Fibonacci numbers, pivot points, etc.), fundamentals and trading psychology.
If you limit your education to a basic high-level overview of a few subjects, how do you think that will help you acquire the skills needed to become a successful trader?
I’m not saying go out there and read everything there is to read on trading. While that would be ideal, realistically it’s not possible.
What I am saying is this…
Before you enter a single trade, read and study enough to know why a tool works, how it works and how well it has worked in many different situations. After you start trading your live account, continue reading and studying some more. The forex market is dynamic and continuously changing. (What market isn’t?) Being well versed in all the disciplines of trading gives you the ability to adapt and make quick decisions in this fast-paced market.
Time
Have you ever told yourself there’s never enough time in the day? I think we’ve all thought that to ourselves at one point, but if you’re not willing to shift your priorities to make time for trading, then forget about becoming a trader.
Sorry to put it so bluntly, but contrary to popular belief, trading is not a hobby.
Trading is not a hobby.
Trading is not a hobby unless you want to lose money.
Golf is my hobby. I pay to play golf. Golf is Tiger Wood’s business. Tiger Woods is paid to play golf.
See the difference?
Trading is a business
You have to devote yourself to trading just like you would with any other business in order to be successful.
So, it’s time (pun intended) to ask yourself this: “Can I balance my time and change my lifestyle to make room for trading?”
I’d better hear a resounding “YES!”
But before you can even truly answer that question, you need to first figure out what your daily priorities are and determine whether or not you can make trading THE number one priority.
A good way to find this out for yourself is to list your daily activities, and then prioritize them. If your daily priorities take up all of your time, then forget about trading.
So, take a moment to figure out what is going on in your life because it’s very important to balance your time and priorities, not just to become a successful trader, but also to live a content, meaningful life. We all want to be wildly profitable, and initially we may drop everything else to get there, but in the end an unbalanced life will lead to personal and/or professional failure.
Capital aka Cash Money
It takes money to make money. Everyone knows that, but how much does one need to get started in trading? The answer largely depends on how you are going to approach your new start-up business.
First, consider how you are going to be educated. There are many different approaches in learning how to trade: classes, mentors, on your own, or any combination of the three.
While there are many classes and mentors out there willing to teach forex trading, most will charge a fee. The benefit of this route is that a well-taught class or great mentor can significantly shorten your learning curve and get you on your way to profitability in a much shorter amount of time compared to doing everything yourself.
The downside is the upfront cost for these programs, which can range from a few hundred to a few thousand dollars, depending on which program you go with. For many of those new to trading, the resources (cash money) required to purchase these programs are not available.
For those of you unable or unwilling to pony up the cash for education, the good news is that most of the information you need to get started can be found for FREE on the internet through forums, brokers, articles and websites like BabyPips.com. We should all thank Al Gore for inventing the Internet. Without him, there would be no BabyPips.com
This is no one “correct” path.
As long as you are disciplined and laser focused on learning the markets, your chances of success increase exponentially. You have to be a gung ho student. If not, you’ll end up in the poor house.
Second, is your approach to the markets going to require special tools such as news feeds or charting software? As a technical trader, most of the charting packages that come with your broker’s trading platform are sufficient (and some are actually quite good). For those who need special indicators or better functionality, higher end charting software can start at around $100 per month. Maybe you’re a fundamental trader and you need the news the millisecond it is released, or even before it happens (wouldn’t that be nice!). Well, instantaneous and accurate news feeds run from a few hundred to a few thousand dollars per month. Again, you can get a complimentary news feed from your broker, but for some, that extra second or two can be the difference between a profitable or unprofitable trade.
Finally, you need money/capital/funds to trade. How much exactly? Well, let’s be honest here. If you’re consistent and practice proper money management techniques, and without even knowing your monthly expenses, then you can probably start off with $50k to $100k in trading capital. It’s common knowledge that most businesses fail due to undercapitalization, which is especially true in the forex trading business. So, if you are unable to start with a large amount that you can afford to lose, be patient, save up and learn to trade the right way until you are financially ready.
Psychology
Once you’ve made the time to get properly educated, demo trade, and save up sufficient capital, the time will come where you will have to tackle the markets. By this time you should’ve have learned the mechanics of trading and methods to analyze the market that you are most confident using.
But are you ready to risk your hard-earned money?
Can you put your money where your mouth is?
Can you handle the (emotional, psychological and financial/economic) pressure of the occasional losing streak and account drawdown?
Will you be able to control your excitement on a profitable trade?
Can you let go of your last trade and completely focus on your next opportunity?
What separates the profitable traders from the unprofitable ones is that profitable traders can handle the pressure of risk and control their emotions. They realize that losing is just a part of business. Those who have enough confidence in their methods and systems know that a drawdown is a short-term setback and they will soon recover.
This final crucial lesson can’t really be taught. It will take time and experience. You have to put in the hours. You will have to go through a gazillion different trades and different market environments before you grasp and live these concepts. If you can’t do this or aren’t willing to, then ultimately, trading may not be for you.Summary
For those willing to take the challenge and follow through, professional trading can be a worthwhile goal. But before you dive too deep into forex trading, dip your toe or get your feet wet in the shallow end first, and become familiar with the water. As you get more comfortable, make your way slowly to the deeper end. Take your time.
Be honest with yourself.
Be ready to sacrifice your time and money.
Never stop learning and, most importantly, never quit.
Winners never quit and quitters never win.
The price of becoming top trader is extremely high, but certainly worth it.
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