“I am teaching myself how to trade.” One of the most famous one liners you hear from up and coming traders. When I started trading back in 2006, I was in the same camp. Young, brash and cocky as hell, “I will DOMINATE the market because I’m smarter than everyone else,” was pretty much my train of thought. When chatting with new traders, I hear the same brash overconfidence in their voices today.
Can you teach yourself how to trade? Of course you can. You can also teach yourself how to ride a motorcycle or speak mandarin. You can try, but no one said it will be the most practical way of doing things. Or safe. Please don’t hop on a motorcycle trying to prove me wrong.
When starting off, most new traders tend to lose money. You might have an early winner or two but usually 3-6 months down the road, the luck runs out and reality sets in. If you are trading on leverage or margin, I would say about a month tops until most new traders have that blood-pumping, tunnel-vision feeling when they see their portfolio crashing down. Most newbies learn these lessons the hard way, and there’s no tougher lesson than one learned when losing money. Trust me on that one. Most new traders (95%) tend to lose their initial deposit within the first year, which we chalk up to “paying the market’s tuition.” When I say pay, I mean blow up their account. Let’s face it, the amount of money risked in the beginning isn’t going to be life changing either way. Maybe in that moment it seems like all the money in the world, but in the long run, it’s a small toll most traders pay. Think of when you were a kid and someone older gave you $20, you thought it was all the money in the world --- Now it's lunch at Chipotle. The new trader either licks their wounds and saves up for the next attempt, or just throws in the towel and calls it quits. The biggest issue with trying to teach yourself isn't the loss of capital but the waste of time potentially applying the wrong strategies.
If this sounds like a friend of yours, tag them, it might help them.
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