Ladies and gentlemen, I’ve got some really bad news for you today:
90% of you are going to fail a trading.Here’s why:
Let’s talk about the three top reasons why, and then go into some solutions on how you can fix it. The very first problem that most traders run into is they have no system whatsoever. What does that mean? They don’t understand where to get in and where to get out. They’re not really learning or understanding the right way to identify a candidate, enter the trade, manage the position, and then ultimately exit out of the trade. That sounds very simple, but it’s probably one of the most complex things to do. You need to have a proven, fully functional trading system if you’re going to trade successfully.
The second one is trading with emotion. See, that’s the problem, too many individuals are trading purely out of emotion. They hit ‘enter’ on the keyboard, they get into a trade and say, “What price am I going to get out at?” Then, they buy a stock or an option and, let’s say, they buy the stock at $10, and it goes up to $10.10, they’re excited. It goes up to $10.20, to $10.30, they’re really excited, and then it backs off to $10.20, and then $10.10, and then $9.90. “Oh my goodness, it’s going against me. Let me go get out now,” and they have no reason for getting out other than financially they’re down $10. I’m trying to show you that there are ways that you can do this without having those emotions get in the way. Now, don’t get me wrong there still will be emotion in there, but the emotion is controlled because of how we handle it right up front.
The third component is no education. See, for myself, I started looking at the market as a brand-new individual, as an investor, a trader, but I had no idea what to do. Here’s a great example of it. You get a job at your company, they show you a 401(k), “Pick some mutual funds to get into.” “Which ones do I pick?” “Oh, just pick a couple of different ones and it’ll all be okay.” No education whatsoever, no understanding, but you’re being told to take control of your financial future. For me, the best thing that I did was to learn how to do this by following someone else that knew what they were doing. Number three is not having education any education. Guys, number one, the solution to it of what I did was this: I got educated. I found a company that could teach me, a mentor that I could work with, and he trained me how to do it.Number two, you learn how to identify and to manage the trade, and then ultimately exit the position removing the emotion from the trade because we know up front what we’re going to do before we get there. Get yourself educated, have a system, start to remove the emotions from the trade and you’ll do great.