Do you know what stats say about the people who set on the journey to becoming stock market or Forex traders? Only 10% of those taste success in the stock market trading and make money. The other 80% lose their money and the remaining 10% achieve break even. That is the topsy turvy world of stock trading. Is it the stock market that presents too many challenges for a common trader or investor? Or, common traders fail to put in the required efforts and time that 10% of successful traders put in? We are going to discuss in this post why you should not be a trader? Why you should never become a trader or don’t trade when you lack in certain aspects? What are those 9 hard reasons trading might not be for you?
- Only 10% of traders taste success in the stock market trading and make money.
- The other 80% lose their money and the remaining 10% achieve break even.
- Trading is a valley full of challenges, trials, and tribulations that everyone can’t face.
What might make trading not for you?
You might like the idea of becoming a successful trader but it isn’t the path that is good for everyone. It is a valley full of challenges, trials, and tribulations that everyone can’t face. Even though it rewards handsomely but only to those who have knowledge, experience, and put in the required effort to be successful.
It is a bitter truth but it is a truth that dreams often lie and unrealistic expectations make you fall. The following 9 reasons show why trading might not be for you.
1. Lack of knowledge
Knowledge is absolute power and lack of knowledge is the worst of weaknesses. Lack of knowledge is the first and the foremost reason that most traders fail to make money when trading. Proper knowledge of the stock market brings success. Some traders try to educate themselves but they look in the wrong places and don’t get proper trading knowledge. The maxim is “don’t trade when you don’t have the required level of knowledge and education of the world of financial markets and trading.”
In simple words, how can you be successful when you don’t even know the basics of the markets, factors affecting the market, and trading rules. Moreover, you also need to have a trading plan and trading strategies that synchronize well with your trading style, money management, and risk management rules. If you don’t have a strong grip over those aspects, then don’t trade, at least not at this level.
2. Lack of capital
You should never become a trader or even think about it when you don’t have sufficient financial power. In simple terms, you can’t trade with the money you can’t afford to lose. Trading is a risky business and financial markets are often volatile. That means, whenever you start trading, you are facing the risks of losing your money. Because of such a high level of risk, you need to be sure not to lose the money that you need for living.
3. Can’t take risks
You should never become a trader if you are risk-averse and can’t take risks. Trading involves risk-taking to earn money. You can’t earn if you don’t take risks. Even when you manage risks carefully, there is always a certain degree of uncertainty because of ever-changing market conditions and volatility. Therefore, if you cannot take risks, don’t trade. Remember the maxim, “High risks, high rewards.”
4. Can’t invest time
Time investment isn’t less important than the capital to start trading. All the successful traders invest a lot of time to acquire knowledge and develop skills. Then they gain the required level of experience. There is no short-cut to becoming a successful trader. Money isn’t enough. You need to invest time and if you can’t invest time, never become a trader.
5. Can’t control your emotions
Trading involves emotions. Emotions are natural and traders are human beings after all. However, all successful traders learn to keep emotions at bay. They can control their emotions. They know how to follow trading plans and strategies without being overwhelmed by emotions. You need to understand before entering a trading profession that sometimes you will make the right decisions and earn. But, sometimes you will make wrong decisions and lose. What will you do then?
Successful traders never become over-confident when on a winning streak. They don’t lose hope either when losing trades. They have their emotions under control. Can you do that? Do you think that you can control your emotions? If you don’t then trading isn’t for you. Take a hard look at yourself and decide never to become a trader.
Moreover, psychology is an important factor in determining why you should not be a trader. Learning to trade is quite easy but understanding psychology is quite hard. Psychology factors always play a part in bringing failures in trading. A trader’s psychology and attitudes not only determine their trading approach but also their approach to financial markets. Emotions like fear and greed drive all those traders who can’t control their emotions. Without proper education, these emotions amplify and can lead you to make costly mistakes.
6. Can’t follow strict rules and regulations
Successful trading depends on your overall plan and strategies. You set strict rules for yourself to follow. You determine how to manage money and risks. You also determine your approach to trading. Those are the rules that don’t let you astray and make silly mistakes. However, if you can’t follow strict rules and regulations, trading isn’t for you.
7. Have unrealistic expectations
Trading is a difficult profession because of the level of risks involved. You cannot think of yourself as an expert after reading a few books, watching tutorials, or having courses. Knowledge is important but applying the correct knowledge is also important. It is the experience that teaches you how to apply the correct knowledge. But, some traders set unrealistic expectations from trading. They dream about becoming millionaires in a few months. If you have unrealistic expectations from trading, then don’t trade. You will lose your hard-earned money because of your unrealistic expectations.
8. Want passive income
If you want a passive income from trading in financial markets, don’t trade at all. It demands you to be active to make money. You can’t earn money while being passive unless you have a large capital. Therefore, if you want to earn passive money, take a turn to invest rather than trading.
9. Lack of passion
Traders who want to adopt the trading profession just to make money often fail. They lack the passion to be successful traders. It takes years to become a successful trader and start making profitable trades consistently. It is the passion, desire, and urge that drive you for that long. If you lack passion, never become a trader.