Most people think of trading as something that is very exciting. The thrill of seeing your money increase with a kind of rapidity that is difficult to match from other legal avenues is something that few are able to resist. Also, it creates an image of the trader as being some kind of a superior being, one who is able to take all those risks- which most ‘normal’ people avoid taking. Or think they cannot. Outsiders secretly or openly admire the carefree lifestyle of a trader and wish they could emulate them as well. This is why, every time there is a bull market, people think of quitting their daily jobs and turn into full time traders.
Most people find their jobs boring. The same routine, the same environment, the same people, the same thing to be done day in and day out etc. etc. But in trading this can never be the case, right? Every day is a new day, with its own vagaries, some good some bad- how exciting! The environment is never the same, right? Some days zooming up, other days crashing down and some other days doing essentially nothing- so something new to look forward to every day as there is very little way of knowing how the day ahead is going to pan out- how exciting!
Then, what we need to do keep varying every day, right? Some days you are a buyer, some days you sell what you have bought earlier, some days you sell short, other days you play a leverage game and on yet other days you sit around doing absolutely nothing and no one says anything about it- how exciting! There are many other parallels but to cut it short, the common thread running thru is – Excitement! That is what everyone thinks is part of all trader’s lives.
This is what makes it all worthwhile – the enduring of losses and the headiness of profits. In my normal life what can I get except for the dull salary at the end of the month and perhaps some measly bonus if the Co does well? Aah, I wish I could become a trader, think most.
The truth is quite different though. When you are racking up losses, where is the excitement? When the market turns around unexpectedly and heads in the opposite direction of your position, it can seem exciting only to a bystander but certainly not to you, It would be great if you knew what to do when the market is doing a certain thing but that seems to be just problem isn’t it? Most people have no clue about what to do right in the market- and how exciting can it be to keep doing the wrong thing almost every day and paying the penalty for it? If you look at it closer you will find that the very reason why you thought market is such an exciting place is not really so, after all! But most find this out after taking a nice bath in the river of losses!
Understand that the very dullness of your current job is what gives it predictability, what gives it the lack of volatility, what gives it the surety of a payoff at the end (the salary). With predictability and lack of volatility there is an illusion of control and that seeming control allows us to function, many times rather well. It is what enables us to do our work and retain our jobs and get home the money every month on a fixed day.
It might therefor surprise many to learn that making trading boring would then be the key to making a success of it! How does one do that? Well, make it into a job or a business. Do the same things every day with no variations (i.e. create a method and stick to it all the time). Don’t bother about the shooting or skidding of the prices every day as they are not to be chased. Instead you follow the process as dictated by your approach and only a faith in the approach can make you do this. How boring is that! What you need to do is decided by your method and the way it responds to the current market state- and not on how you feel at this current moment. So all that exciting decision making is out- that can make it quite boring, right? Once you make your trading boring (in other words, do the same thing every single day) its outcome becomes predictable and so long as the process is well designed, it will remain consistently profitable.
So, it really boils down to getting the image of excitement out of the mind and adopts the same old drudgery of your humdrum job to be part of your trading career. How many can do this? Not too many, unfortunately. You see, most come here for the excitement, it is seldom about making money! If that happens, incidentally, well, that’s a double benefit scheme! So most traders get what they came here to get- seeming excitement. Never mind the fact that after a while they all turn miserable because the other part of their expectations (trading profits) has no chance of manifesting so long as they are chasing excitement. Try telling that trading as a career is a boring one and see how many want to quit their day jobs and become traders!