The worst thing that can happen to a newbie? Make tons of money when you first start trading. I fall into that camp. In my first foray day-trading the HK Gold Tael market, I made enough money to buy my wife a first-class fur coat!
“How easy is this?!”, I thought!
The experience convinced me to sell my legal practice and become a full-time trader. Easy? It took me all of seven years and bucket loads of dollars lost to become profitable finally.
And that’s the difference between trading and other professions – luck plays such an important role for success.
Think of it this way: let’s say you have been charged with murder. Would you hire someone with no training or experience to defend you? What would you say would be his chances to get you acquitted – somewhere between 0% and -100%? In short, no knowledge, no training means no chance of success.
Not so the trading game. You can be a total ignoramus, and for a while, appear to be God’s gift to the trading world. And, the ‘unfairness’ doesn’t stop there. You can be the most knowledgeable trader, you can do everything right on any one trade, and still lose money on that trade!
It’s this randomness and uncertainty that makes trading so hard.
So, how do we overcome the hurdle? Accept that on a trade-by-trade basis trading is random and uncertain. Our profitability, our edge, comes from the consistent execution of our trading and risk management rules.