Becoming a Professional Trader – When Dreams Meet Reality

People often enter the trading arena because they lost their jobs, are looking to supplement their incomes, or think this is an easy way to make money. In reality, trading is the most challenging easy money you will ever make. With a statistic of approximately a 90% failure rate in the first 12 months, you must work hard to survive trading for a living. Trading is much like any other career; you get back what you put into it. Those who come into trading treating it as a hobby rather than a business will struggle tremendously.

With that said, trading has a better track record than it sounds compared to other worthwhile endeavors. Think about this: How many people try out for a professional sport and make it to the pros? I bet that it's a low percentage. 

I bet we all know somebody who went to many years of school to become a doctor, lawyer, engineer, accountant, etc., and quit because it was more demanding than they thought. As you can see, these careers parallel trading pretty closely.

Like other professional jobs, trading requires the trader to be dedicated and diligent to achieve high success. Many traders fail in this field due to inexperience and then realize they have just thrown their hard-earned money into the wind thinking this was going to be some get-rich-quick idea. 

The trading community comprises all types of traders from different backgrounds, and we each bring our unique skills to the marketplace.

How do I know I'll be a good trader? 

Trading can be a challenging career. It would be difficult to tell whether a trader will make it. Each trader will learn at a different pace. The other part of the equation is that people measure success in varying degrees. My experience from being around traders, both losing and winning, has shown me a few things that help with the decision to become a trader:

• Participants starting from the ground up with trading seem to have the edge over those who jump into the markets with both feet without taking time to educate themselves or understand the markets they will be trading-case in point, the number of day traders that came to the market during the pandemic. The market was in a strong uptrend. Once the trend turned down, most of these want-to-be traders returned to working elsewhere. 
• Trading is a probabilities business, and traders must learn to think in probabilities so that when they experience losses, they will know that this is part of the trading business and will not shake their self-confidence.
• They have studied the markets and found or put together a tailor-made strategy for themselves. They do not take somebody else's trading plan and try to make it work for them. Each of us has our own risk and reward objectives. If we try and incorporate somebody else's plan, we will not be comfortable and will not use the strategy consistently, leading to losses.
• Good traders tend to be more flexible. You will have difficulty if you come from a background where everything is black and white and try to apply those same characteristics to your trading. The markets are very fluid, and traders must be ready to adapt when needed. 
• People who think for themselves without input from somebody else before making a decision also tend to do better. 
• Get your trading education, study the markets, learn or design a strategy, learn your strengths and weaknesses and then simulate trading or start with micro-size contracts until you are comfortable. There is no hurry to get started in live trading. It helps to have patience before you start trading. 

When does one say enough is enough and stop trading? 

The learning curve for becoming a trader has been made much easier with the internet search engines for research, available education on the markets, online trading, publications, and networking with fellow traders. New traders only know whether trading is for them once they try it. At some point, they will need to pause and ask themselves some tough questions about their progress. Generally, after 18-24 months of trading, remember, everybody will learn at a different pace, which would be a good time for this self-analysis. 

Here are some questions you may want to ask yourself about your trading career so far:

• Have I gone through the process of learning about the markets I trade, and did I create a written trading plan to trade these markets? 
• Do I follow my trading plan regardless of what the market is doing? 
• Am I allowing the trade to go to my exit points (stops or targets) without getting out too early? 
• Have I truly accepted that trading is a probability business and that two or three trading losses should not affect my self-confidence?
• Looking back over the last two years, has my trading negatively affected my personal life?
• Did I have to resort to alcohol, drugs, or other stimulates to help me cope with trading? 
• Is my risk management plan strictly followed? 
• When I have a losing trade, do I have the patience to wait for my following setup, or do I force a trade to get the money back that I lost? 
• Do I still have the same intense passion for trading I had when I started? 
• When I started my trading business, I also created a business plan to help guide me through my career. Am I on course with what I had written in my business plan?

You should ask yourself these questions and be honest with your answers. Trading, like any other business, is not for everybody. Just like everybody who works for a large corporation will not become the CEO, every trader will not be successful. And you know what? That is perfectly fine. The critical point is that it is no big deal if you tried it and it did not work out. Perhaps trading is not your calling. Please do not take it as a personal failure. 

Also, don't give up on working in the financial industry. There are other positions available that you may be qualified for now that you have some trading experience. Trading may not be your calling, but becoming a market analyst and giving recommendations is. You will be amazed at the number of people who struggled as traders but can give the best trading advice in the world. Even the sales side in the financial industry is lucrative, and now with your extra trading experience, you can better relate to the end user's needs. 

In sports, some of the best coaches were the worst players. 

Before your self-analysis, be aware of the following:

One of them is attitudes that can be detrimental to your financial health is ego. There is no place in the markets for ego. Ego has ruined more lives, families, trading accounts, and worse. Ego will make you exit your winners early to get that good feeling it was right and make you stay in losers way beyond your original exit point because it does not like to lose. If you have ego issues, you will have a more challenging time knowing when to quit trading if you are ever faced with that decision.

On the other side of not being able to quit, you have the people who are afraid to trade because they do not want to lose. These traders become spectators, not players because they cannot pull the trigger. Under-trading is almost as bad as over-trading. If you are not comfortable trading, keep your money in the bank where it is safe. Again, there is nothing wrong with this. You don't need to be trading for a living. 

At the end of your initial two years of trading, you should ask yourself the above questions and decide whether this is for you.

Good trading traits to cultivate 

• A good trader needs to stay focused while they are trading. If you cannot finish reading this sentence without looking out the window and saying, "Oh look, a squirrel," you may be distracted a little too easy to be a good trader. 
• You must be good at following rules, especially if you wrote the rules. You may have little difficulty trading if you have report cards from grade school saying you had issues following rules. 
• Being able to survive the isolation of trading is very important, unlike an office environment where you have a cubicle buddy to share conversations with during the day. The feeling of isolation will need to be addressed, or you could fall victim to placing trades because you are bored. Also, you will become more easily distracted in your office alone. You may start to surf the internet or have conversations on social media with friends. Ask any trader who has done this for a while, and they will tell you of the traps you can fall into by being alone all day. 
• Good traders know that the markets are forever changing, and the only way they can capitalize on this is to keep up with the markets. Trading is certainly a career where continuing education is a must. Do not come into trading thinking there is some pinnacle of education you need to reach, and then you can rest. Trading is more about the journey than the destination. 
• Another significant asset for a good trader is having a passion for trading. You will need passion to survive the ups and downs of this business. Without it, you will give up very quickly. Do not trade just for the money; you genuinely have to have a passion for trading to make this work.

In summary

Trading can be a tough business, and just because you have acquired some funds for your account does not qualify you as a trader. Spend some money on education before you trade. The tuition you will pay for self-taught is a significant amount. Before paying for trading education, do your due diligence on the educator. There are many scams today in the trading education arena. 

Be prepared to endure some challenges to succeed in this business. If you commit to learning how to trade and allow yourself the time to absorb all the needed education, you will put the odds of success more on your side. Remember, this is not a get-rich-quick scheme, but it may be a way of making a living at something you love doing if you follow the rules.

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