thoroughly before he relied on it for income. He had traded it with his paper trading account, but did not start small in trading real cash to gain confidence, so he did not know what to expect when the technical and psychological complications of trading live cropped up.
Worse, he allowed his emotions to get the better of him when he traded. A few losses in the beginning aroused his doubt about his system (although it had a win/loss ratio of 75 percent in paper trading). There might indeed be some flaws in the system, but he was not experienced enough to effectively detect and then fix them, because he did not have any strategy to track his trades and find out where the “leakage” was.
He thought he was lacking some secret trading techniques or a more robust trading system, so he devoted more time, money, and effort to finding them. Fred was setting himself up to fail.
Trader by Plan
By contrast, Stacey had planned appropriately before she launched her trading career. She planned her training and received coaching to prepare herself mentally and technically to become a trader. She knew the schedule for leaving her job and planned the steps leading to that.
She started small, failed a lot, and failed fast to verify her trading system before developing a robust one that she could fully rely on. But things still went wrong even with these experiments. When it happened, she did not react emotionally. She calmly tracked her trades and analyzed her failures. To her, every failure was a lesson to learn, and one step closer to success.
But she did not do this alone. She used her coach and fellow traders for feedback and improved her results through experience and learning.
Dedicated Trader… or Slacker?
When Fred worked for the engineering firm, he was a dedicated and responsible worker. He would turn up at his office on time every day, never missed a project deadline, and made sure he delivered quality work, even if it meant he had to work extra hours. As an employee, his manager and supervisor guided most of the steps on his career path.
But things were different after he left the corporate world and became a trader.
Fred enjoyed the freedom that trading gave him. He could start work at almost any time in the day, and had the freedom to decide how many hours he would work. Not having to turn up at an office meant that when he felt that he needed more rest, he could take a few hours off from work; having no project milestones to hit meant as long as he worked to his satisfaction, he felt fine. (He did set some earnings targets. But since he was his own boss, when the targets were not met, it was easy to tell himself to “just try harder next time.”)
To his friends and family, Fred seemed to be a dedicated trader. His trading activities took up at least 80 percent of his waking hours. He was glued to his desk, busy looking at charts and analyzing the market, busy deciding whether to enter or exit trades. And when he was not making trades, he was participating in online traders' forums to exchange tips with fellow traders, researching the markets, and visiting trading gurus' websites or blogs to get their advice and inspiration. He had practically no time for a life outside of trading – no time for a physical workout, no time for his hobbies, and no time for family and friends.
Deep down inside, Fred knew something was wrong. He was not making money consistently. His trading account was not growing, and he saw no significant progress in himself as a trader.
He started to wonder whether he was doing things right. As an intelligent young man, he soon realized that most of the hours he spent on trading were unproductive hours. He was spending his time aimlessly, not knowing where to head.
Fred was not really working most of the time. He was only slacking.
The Life of a Trading Mom
At another corner in the same city, Stacey was living a more fulfilling life than at her previous sales job. Juggling between trading and her duties as a wife and mother was not easy. It tested Stacey's time management and multitasking skills – but Stacey was doing well so far. And she was enjoying every moment of it.
Stacey held herself accountable for her trading career. She knew that she only had limited time, so she planned well. She would show up at her work desk at the same time every weekday (after settling her baby down for a nap), worked for a fixed number of hours, and called it a day punctually – unless anything unexpected cropped up in her trades.
She was a methodical person, and this character showed in her trading. She knew she did not have the luxury of time or extra capital to waste, so even before she quit her job and launched her trading career, she already had her trading system set up, tested, and proven. In addition to that, with the advice of her coach, Stacey had written a business plan. It was just nine pages and not exceedingly elaborate, but the process of designing her plan had allowed her some space to think through how she intended to conduct her trading. Consequently, she was clear about her short- and long-term goals, her daily work schedule, the methods to track her performance, and how to manage money – even before she started trading.
All these efforts to “systemize” her trading seemed tedious and dull at first – and indeed, at some point Stacey questioned the rationale and necessity to do so – but she pushed through it anyway. At the end of the process, Stacey appreciated that she had laid out all the components involved in a trading business and she knew that her goals were achievable.
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