Can anyone become an investor these days? This requirement is considered by traders as a truism. This does not mean that you can ignore it, because without discipline in general there is no method. It is interesting that eg. military men are much more successful in trading than any other professional group. Why such an anomaly? This profession requires, above all, discipline. The military men are hard and prove their hardness. Their strength in the context of speculation, means the ability to control emotions, fear and greed. The stress associated with trading is enormous and affects all traders. Sometimes a stock trader calls me asking for salutary advice. They tell me about their large investments, which are losing a lot of money and ask for my opinion about the market in general and their stocks in particular. They know well that their investments are far too large in relation to the total value of their money. I do not like answering such calls or emails for several reasons.
First, the request for advice puts me in a situation where I can’t win. Secondly, good money management is more important than my opinion of the market. Thirdly, such requests take place after the fact, once the caller’s hard loss. They want to hear something that will sustain their spirits, for example: “I think that you do not have to worry, because the prices will soon rise back and save you out of trouble.” Even if the prices actually turned in their favor, my interlocutors would quickly sell their stocks without earning a cent. In other words, they were unnecessarily risking a lot of money just to sell without a loss.
Novices can’t face the truth and have difficulty understanding the harsh realities of the market and the level of human emotions involved in trading. They dream about the discovery of the marvelous exchange rate, which will make them millionaires. Even if they did, they would still need to have the iron discipline to execute their program, and it is difficult.
Pulling the trigger separates the men from the boys, and boys are losing money. It is a myth that you have to belong to the group of “insiders” to be successful in the stock market. “Insiders” are in jail today. Your greatest enemy and competitor is you alone. Most of the market traders, after several years of speculation, knows what they must do to be successful in the stock market. A trader who ignores the acquired knowledge quickly gets in a big trouble. If you’ve lost money in the stock market or your current results leave much to be desired, first of all you should ask yourself a few questions:
• Do you have an objectively defined method of trading?
• Do you happen to take the excessive risks, risking more money than usual?
• Do you plan your moves outside the hours of trading in the stock market?
• Do you know before the start of the transaction, at what price you want to “go in” and if you make a mistake, “exit” from the market?
Awareness of the difficulties encountered in the implementation of our plans, is already half the victory. – G. Washington
So can anybody be an Investor? I could go on asking questions. The key question is not whether you make money or not, but if you make decisions according to your method, experience and knowledge? If so – do you always? Analyzing many years of experience, I can state emphatically that I do not know the requirement, which rewarded me more generously than discipline. If you do not have the discipline, do not count on a success in trading on the stock market and being successful as an investor.