Trading the market is a full-time commitment. A novice trader begins his trading journey with great aspirations and a certain level of excitement. He has a lot to learn and miles to traverse on this rather uncertain path. He has very little idea of what lies in store for him.
- The very first challenge that he comes across is the ordeal of convincing his family and friends that the path chosen by him is the right one. Most visualize the market as a dangerous place where huge sums of money are lost and are only meant for gamblers. It causes panic and fear in the hearts of most people. The novice trader, though convinced he, is unable to justify his claims as he has not yet attained success. He can only do so with documented proof and a flourishing account. This creates pressure on his mind-perform or perish.
- He goes about learning the nuances involved. He treads the path slowly at first trying to apply his newfound education into the practical world with very little success and some financial loss. This adds to the earlier performance pressure and causes anxiety.
- A nervous and uncertain state of mind causes him to make mistakes which he is unable to recognize and eventually gets entangled in the web of his follies. The more he struggles the tighter becomes the noose around his neck. This temporary failure coupled with the fact that the family and peers are secretly mocking him leads most gives up and accepts defeat.
- Those who survive this move to the next level where they try to re-discover themselves. By this time, they have familiarised themselves with the uncertainties of the market. They tread the path a little more steadily and are now aware of the pitfalls. They manage to keep afloat with their losses pulling them down and their gains pulling them up once again. With their heads bobbing out in this financial whirlpool they keep searching for that one system which will help them stay afloat. By this time experiments are done with and the final results are awaited.
Soon the trader starts becoming comfortable with a system or two and starts seeing the results. He learns to stay afloat and keeps on experimenting with new ideas and concepts. His earlier losses are yet to be covered and consistent profits are yet to be generated.
In the quest for covering their losses, many traders lose balance at this stage and not only overtrade but also create a position size greater than their risk appetite. This leads to further losses and despite having a successful trading system they are unable to cope with the pressure.
It is important to note that the key to success is to learn from past mistakes and implement the changes in all future trades. This requires a lot of discipline and self-control. It also requires a trader to be honest with himself and be extremely self-critical in his approach. This is a great challenge in itself because the self within is ready with countless excuses and prevents one from thinking rationally.
The journey of a trader is full of pitfalls and extremely challenging physically, mentally, emotionally and financially. But with perseverance, honesty, and discipline all the hurdles can be overcome and the fruit of this ordeal is extremely sweet!!!