A reader named Jon sent me the following question:
What do you think is the biggest obstacle to overcome in making the transition from an avid student of the markets(who reads everything & is very knowledgeable about price movement) to a professional trader who is able to make money consistently?
The first big obstacle is making the jump from trading in theory to trading in reality. It’s really easy to think objectively and have confidence in yourself and your abilities when all you’re doing is basically experimenting – learning systems, practicing in a demo account, etc. As most traders have found out, it’s a whole other story to actually have real money at risk in the markets. Many people who do great on paper struggle to even pull the trigger onces it’s live.
The next big obstacle – at least it was for me – was doing your own trading and not trading what other people tell you to trade. You’re never going to be a good trader if you’re basing your trading on what someone else is telling you to do. If that’s what you want, then cut out the middle man and just give some portfolio or account manager your money. It will save time and stress. To be a consistent trader you have to trade your way, whatever way that is.
The third thing I would throw out there as a requirement for getting from student and profitable trader is experience. You need to trade to become a good trader. There are certain things you will never learn as just a student. You have to get in the markets and practice. As a volleyball coach, one of the things I did a great deal was to put players in gamelike situations. That forces them to develop their decision-making skills under fire – something which just can’t be done talking about it or showing them. It’s the same in trading.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.
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