Nothing worthwhile ever comes easy and that’s as true about trading as it is in any sports or life skill.

Agree?

But though it’s not easy, that doesn’t mean it’s not worth it and that you shouldn’t do it.

“You have to always continue to strive no matter how hard things get, no matter how troubled you feel. No matter how tough things get, no matter how many times you lose, you keep trying to win” – LL Cool J

A quote from LL Cool J (musician and rapper). What does one of the world’s most successful rappers have to do with trading?

Well, there’s a surprising amount of similarity actually, and we’re talking attitude of course. As you’d already know, attitude is everything.

Just to be clear, we’re not talking about self-confidence, don’t confuse the two. Instead, we’re referring to that part of your character that determines how you approach your job, how you make wins and, perhaps more importantly, how you deal with setbacks.

There’s a lot to this “job”, or however you want to call it, and if you’re already a seasoned trader, you’ll know that no two days are exactly the same.

But there’s more to it than that and here are three truths about trading you might wish you’d known before you pressed the go button.

Let’s explore what I mean.

1. There’s Unlimited Wealth That You Can Earn, Assuming You Manage The Risks

“Really? Is there an unlimited wealth?”

This is what one might ask when still struggling.

In a classic two-edged sword fashion, this is both a hindrance and a help. With the mindset that you’re unstoppable and can achieve anything, all these comes with some element of risks.

More importantly, did anyone tell you what risk feels like? For some, it feels like you’re out of control, right? But all of these only happens only if you fail to manage risk properly or fail to manage your approach to it.

I’m sure you’re aware of that.

Risk is healthy, it helps you take stock of the situation and forces you to weigh up the rewards and take note of the pitfalls. Without risk, there really is no reward. But here’s where your attitude comes into play.

If you’re trading without a tried and tested strategy, or if you’re bulldozing your way to trading, you’re exposing your vulnerabilities. Your wealth is definitely going to disappear, and it can happen very quickly.

In other words, you’re going to crash.

There’s a lot to be said about fundamental analysis, technical analysis and strategy. Of course but what it really comes down to is creating a set of tried and tested rules. Rules that work, produce results and set your trajectory.

Hence, if done correctly. There isn’t a limit on what you can earn but you can limit to what you can lose.

2. Psychology And Trading Go Hand-in-hand

The fact that you’re reading this article, and you’re at this TYE site, you’ve probably read a bit about the psychology of trading in previous blogs.

Having said that, are you really aware of how much influence your psyche plays in your success? Are you clear on what it can (or cannot) do to you?

If not, do spend some time going through this site.

I truly hope you’ll find out more. And the good news is that once you’re aware, especially your strengths and, more importantly, your weaknesses, you can make the right changes and adjustments to compensate.

Always remember, ABC – short for “awareness before change”.

To underestimate this connection is perilous, even for those playing for fairly low stakes. The feeling or emotion-centred trader can very easily underestimate how those feelings are affected by outside stressors, previous experiences and personality characteristics.

All these things can detract from a sound appraisal of the situation and the tendency to deviate from strategies and rules that are, ultimately, there to protect and benefit you.

Brett Steenbarger is Associate Professor of Psychology and Behavioural Sciences in New York, he also works as a performance coach for hedge fund managers and traders. In an interview with Psychology Today he said: “Traders can get in trouble by gauging their competence and self-esteem based on their profit-loss statement. Once we base our value on trades we can’t control, we become vulnerable psychologically.”

Did you get that?

If your self-worth is based on the stuff outside of your control, you’re in trouble. You’re vulnerable and that’s when you make mistakes.

How can you manage your emotions, your psychology? That’s a discussion for another time but you’ll find more articles from here.

3. Being A Trader Requires Constant Learning

We know you’re not a machine, but if you’re willing to put the time in to learning you will reap the rewards. We’re not talking about ploughing through hundreds of strategy books or YouTube videos but instead, learning from your own mistakes and your successes. That’s not to say reading and watching the experts is ever a wasted exercise.

This concept is further brought to us by Malcolm Gladwell in the book titled “Outliers” where Gladwell states that “ten thousand hours is the magic number of greatness”

In the busy-ness of your day of course it’s hard to find time for some self-reflection and analysis. But, if you can leverage an hour to sit down and really focus on what you’ve learnt from the day’s ups and downs, you’re evolving and you’re growing and that’s some serious investment into your future success.

How do we know this? It’s what the best do.

Steenbarger says: “We go over it in a constructive way to learn from the losses and use that learning to improve our decision making.”

So, traders will: “either profit from their trade or profit from learning from their trade. One way or another we have to take away something positive.”

That positivity Steenbarger’s talking about doesn’t come from winning it comes from learning. Get that idea fixed in your mind and you’ll be well on the way to channelling LL Cool J’s winner’s mentality.

Summary

Of course, there are plenty of ‘truths’ about trading. But that’s not the point.

The article today is a reminder to many that (1) everything is possible, (2) is does take a change in mindset, risk and (3) practise, practise and practise.

Whether a seasoned professional or new to the industry, you’re on a learning journey that lasts a lifetime. Are you guaranteed success? Sadly, no. But if done properly, all is possible.

Learn from the best (and the worst), consider that ceiling on your earnings and how you can reach it. Forget the quick buck and concentrate on developing rules that work for you. Back test them and stick to them.

Open your mind to learning more about your own psychology, not just for work but for improving all those other aspects of your life too. Managing your emotions, channelling them positively and avoiding angry or panic-driven trades – it’s all in your favour. Be the best scholar of yourself and you’re in for one hell of a ride.