At Landshark Education we get a lot of calls and emails from individuals who pretty much ask the same questions when starting out on a path of trading for a living. I wanted to share the answers that have helped us continue to earn income from the markets and maybe it will help you avoid the pitfalls we first went through many years ago starting out.
First Question: Why does trading take so long to learn?
This question is asked quite often in our live classes or webinars and the answer can really be addressed in two ways. First, when you’re new to learning about investing let alone trading everyone tends to think they need to know an abnormal amount of information on how the financial markets work. So they spend countless hours trying to understand what signals are best, what stocks to screen, what fundamental report is coming out, which investing forum will help me and the list goes on...And guess what just happened?
You just became the smartest person at the cocktail party (or in your garage) dropping “knowledge” but you still have no idea how to trade and make consistent money.
The second reason trading takes so long to learn is because most new interested parties won’t put in the dedicated hours to learn core foundations of trading. We tell students all the time if you can’t sit through a webinar or class for 90-minutes and ask questions or be engaged, how do you expect to sit for an hour or two daily on the monitors and trade?
If you want to actually trade for a living then like any business you have to block out all the things that doesn’t directly influence your growth.
(Don’t worry; we will break these bad habits below…)
Second Question: What signals or indicators do you use?
This is asked by new students coming to us but it's everywhere on YouTube where some guy will show a trading strategy and corresponding profit. Then just like clockwork “the habitual youtube trading watcher” who goes from video to video and never applies anything will ask what indicator or signal they are using. If you’re that guy or gal just stop!
When you start out trading the worst thing you can do is take a small part of someone else's trading edge and apply it to your own approach. Why? For two simple reasons:
- You have no idea if this indicator or signal is just a sliver of his/her edge where they may use other metrics as well for evaluating how to find trading setups. Don’t be that person that tries some “indicator” for a few weeks, loses money, then moves on to another indicator because a new YT video showed someone making quick money off of it.
- What is the size of that person's account? If this signal/indicator makes large profits but also has large losses can your account sustain that same drawdown? Most of the time no. Your trading goals are not going to be the same as someone else’s. You might be overjoyed making $500 a week from trading where others may see that as a drop in the bucket.
There is no right way to trade, but if you’re not applying yourself and instead thinking you will get rich quick from a signal or indicator and not learning the basics, you will forever be the “habitual Youtube video watcher”.
WHERE SHOULD I START THEN:
Stop watching trader lifestyle videos of fake traders (professional marketers) showing you nothing about the weeds of what goes into trading for a living.
Open up a simulation account with any major brokerage company (TD, Fidelity, Schwab etc) and get your feet wet trading learning basic concepts on how to place an order or understanding the different chart setups.
Keep a journal and document what trade you did and why you did it. Then review and study where you could of improved on the entry or exit.
For those who are interested in learning to trade part-time before eventually transitioning full-time, be sure to join us this Friday where one of our students will discuss how he trades while maintaining a career.
Webinar registration: How I Made 20K Trading Part-Time While Maintaining A Career
Trading For A Living Part 2 & 3
Find a community of traders like yourself that are actually dedicated and puts in the hours to bounce concepts and ideas off of. We personally have a room called Shark Chat where our students and full time traders are always engaging in trade ideas and sharing what they have learned. If you want to join free for 30-days just click below.
(Request access to Shark Chat)