On Day 1, a trader is just a passenger in a car that is controlled by others...
This journey is so common that when people realize others are doing the same thing, they donāt feel so alone. I have talked with thousands of traders through the years and the vast majority of them experience this journey just as I have.
Something has to change!
Most start out so pissed off with life that something has to change. Most do not have college degrees. The ones that do have college degrees think they have an edge in tradingā¦ THEY DONāT but they canāt realize that yet.
Some people are smarter than others so they think trading will come easier to them. IT WONT. For some reason, trading comes easier to basic factory workers with no education and no one knows why.
Maybe it is just pure gut instinct. Maybe it is because they are used to following the rules. Whatever the case, trading is not, nor ever will be, easy.
Most give up.
Most traders give up before the journey ends. It has been said that 80-90% will give up in their first year but there are actually zero statistical studies to back this up.
One thing we do know, by looking at trading statistics from brokers is that only a small percentage are successful. By analyzing data from 3 of the largest forex brokers, we know that only 25-35% are successful in their trades and the others are losing.
This is a totally different number than all the "95% of trader lose" we see blasted all over the place. No one knows the REAL number.
Success comes when?
Out of the small percentage that stick with it, success is born after a long and intense process. Successful traders go through a series of steps and it is kind of funny but we all go through the same steps, over and over.
Most traders I know have gone down this same path and I am going to lay it out for you here. While you are reading, this I want you to ask yourself where you are along this journey.
Ignorance Comes First
Ignorance of the markets, ignorance of money management, and ignorance of even knowing your life goals; This is where most traders begin. Maybe they have found trading because they were looking for an extra income. Maybe they found this business because they are actually interested in the market. Whatever the case, they have caught the bug. They want to be traders and at this point, they will just start making trades.
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The first problem they may encounter, as I did, is the bid/ask spread. They place a short trade and are immediately at a loss. They place a long trade and are immediately at a loss. Maybe they think, ā It doesnāt matter which way I trade, it loses.ā they are ignorant of even the smallest aspects of trading because they donāt yet know anything.
They donāt know what a bid/ask is. They donāt know what a Japanese candlestick is. They are completely clueless. I was and so are most others as newbies in this business. This is phase 1. This is when they are interested but donāt know their rear from a hole in the ground.
At this point, they may see others trading successfully so they start researchingā¦
The first WOW moment?
Holy Guacamole, Batman! I have found the golden nugget!
This is the basic way most trader have their first WOW moment. A WOW moment is when you find something that makes you take a double take, lose your breathe and say wow.
Many times, it goes down like this.
Step 1: A trader starts researching about 100% win rates and come across a site that promises this.
Step 2: The trader getās sooo excited that he almost vomits. Boy oh boy! He has found it! He then calls up his girlfriend and promptly tells her that he has found the holy grail and all he needs to do is buy this product and he is gonna strike it rich! āPack your bags, baby!ā He tells her.
Step 3: He orders this magical forex robot and spend all day pouring over every juicy detail of the fluff bull crap that comes with it. He installs it onto the forex robot broker ONLY, of course and then is asked to deposit $1,000 into the account to make it run properly.
Step 4: The robot doesnāt take any orders so the trader calls the ātech supportā and is informed that he has not deposited enough money. If he will only deposit an extra $2,000, then this robot will make him $500 per day, every day, for the rest of his lifeā¦ GUARANTEED! Well the new trader doesnāt have this kind of cash so he goes to the local title loan place and pawns his car. Boy oh boy! If he can make $500 per day, imagine if the account builds to $10,000 or $20,000 how much he can make!!!!
Excitement and pure bliss set inā¦
#Disbelief and utter despair
So the robot starts making trades. BOOM! His first trade is up $200 and his second makes $200. The new trader can see the cash just rolling in. He is already writing down a list of vacation spot.
BOOM! A $1,500 loss hits. āWhat the?!?!?!ā The trader canāt believe it. He tries to calmly say that this is only a glitch and he tries to call the hotline again. He canāt get through. BAM! Another $1,500 loss!!! He starts sending emails and phone calls and relentlessly tries to get in touch with this magical robot company. The line has been disconnected.
If you have never experienced this, please watch the video.
Warning. Strong Language!
His money is lost. His pride is lost. His car isā¦wellā¦lost, because he doesnāt have enough money to pay back the loan.
He cries and vows to never let this happen again. He takes a few weeks off from trading while he is too pissed off to think.
Please Trade Responsibly!
Realization and Discipline
Survival, Evasion, Resistance, and Escape (SERE) is one of the toughest military programs in existence. These soldiers go through things that are unimaginable in order to be ready if they ever need to escape tough situations during war time. At times, some of the soldiers may actually think they are going to die in training.
- hooded
- beaten
- starved
- stripped naked
- water boarded until they are almost drowning
- hosed down until they almost get hypothermia
These are normal days during this type of training. Some people call it the torture school. Some people actually feel like they are real prisoners of war. This training is not for the faint of heart.
Source: http://www.businessinsider.com/heres-what-its-like-at-sere-training-2014-12
The ONLY thing that keeps them going during this brutal school is the hope of graduating and becoming the best of the best. They want it and their goal is always there. They will not give up.
This is the kind of pure focus and dedication you have to have when you are learning to trade. No matter whatā¦ No matter if you lose your account; no matter is you get scammed; no matter if your friends think you are stupid. You can never give up because the second you give up, you always regret it and wish you had not.
After being scammed or even learning a crappy strategy that doesnāt work, the new trader will go through a myriad of learning phases. He will spend hours upon hours searching on message boards, looking through strategies, talking on social media. He is on a mission. He is more pumped now because he is starting to see people on Youtube that have made it.
He starts to watch every documentary about trading under the sun. He starts to take every quiz he can get for free. He starts listening to every podcast and reading every book on the subject. NOTHING will stop him now. His mind thinks, ā By gosh, I will make it or die trying!ā
He is disciplined every day and spends every waking moment learning and moving forward. After a while (maybe a monthā¦ maybe 3 years) he is getting wore down. Every day wears on him psychologically and even physically. He is missing sleep. He is missing meals. He is trying and try and trying every day and it seems as if he is doing all the right things.
He gets burnt out. He knows that it is possible to become a profitable trader but he just has no more energy left. Just like the trainees in SERE Training, the struggling trader is laying on the prison floor and has no more energy to move forward at this point.
Taking a break from trading
At this point, the trader has to take a break from trading. He isnāt giving up, by any means, but the pure overload of work and study has just wore him down so much that the takes some time to recollect and gather his thoughts.
It is this time of recollection that a magical thing happens. Unbeknownst to him, all of the grueling hours of study and relentless drive will soon pay off. As the trader steps away for a while, which usually lasts about 3-6 months, he is still always thinking. In the back of his mind, he still runs over scenarios that played out while he was retaining information.
Maybe he is back at a job somewhere, on the assembly line and as each part comes down the line, he begins to imagine little differences in the part sizes and acquaints them to a chart somehow. He starts to see peaks and valleys. He starts to see patterns in everything in lifeā¦ the clouds, the skyline of his city, and even rolling hills out in the country begin to speak to him.
One day, out of the blue, coming from nowhere at all, he gets an ideaā¦.
The second wow moment! š„
Back several years ago, there was an old entrepreneur who tried and tried and failed many times over. His name was Harlan Sanders and now you may know him as the proprietor of KFC. There was another man who tried everything, including having to sell his dog to pay rent. His name is Sylvester Stallone. Another person named Oprah.. well you know her story along with others like Walt Disney, Henry Ford, Richard Branson, J.K. Rowling, and Daymond John.
What did all these people have in common? They had an idea and stuck to it like frikking glue. They would not let go of that idea because deep down, they KNEW it would pay off.
From the trader who is struggling, He gets an idea one day that he canāt shake. This one idea penetrates his soul and he thinks about it constantly when he is working, sleeping, eating, making love to his wife, and sitting in church. Finally, he commits to going back to the drawing board with trading. He tells himself that the time has come to give it another go.
As he sits at his desk of dusty old papers, something magical happensā¦ All of that stuff he learned months, or even years ago, starts coming back. He begins to put 2 and 2 together and everything seems to make sense now. His idea (The one he thought about on his break from trading) seems better than ever! Clarity enters into his mind and he is now determined to make this workā¦more than ever.
A new spark of excitement and hope sets inā¦
Pure determination
At this point, you become unstoppable.
Most traders have already given up by this point and they go back to their ho hum job at McDonalds to live out their lives paycheck to paycheck but not YOU! You are determined. You are not going to be stopped by some setback. You are marching forward like a military who is facing imminent death.
Your one idea is the thing you begin to work on. As you work, calculate, figure, you can start seeing patterns come from the paper. You start remembering all of the rules you learned before. Everything is seen in a while new light. You actually understand what you are looking at now.
You start to spend more and more time on your ideas, like a scientist in the lab that is trying to find a cure for a disease. The desease here is your finances and you are trying to find that one thing that will cure it. You are almost there. As you begin to realize that this will not be accomplished in a day or a week, you start to finalize a game plan for your entire life. You calculate a compound interest sheet and begin to demo test it.
As you continue to demo test it, itās starts to work (in theory)ā¦
Others think you are crazy!
Everyone, at this point, thinks you have lost your damn mind!
They may say things, āYou are dreaming. Itās never gonna happen, bro.ā or ā You need to take care of your family, instead of worrying about something that will never happen.ā
Here is what I say to these types of well meaning people that, most likely, love you very much and only want the best for youā¦
Screw off and go back to your JOB!
No one can walk in your shoes except for you. No one knows the struggles you are going through. No one can possibly perceive the timeless, gut wrenching, hours you have spent working on your ideas. The normal society will tell you that you are crazy or delusional. They will talk about you behind your back as if you are some type of weirdo. Never let this deter you because it WILL happen. Even your own family members will see you as some type of moronā¦ for nowā¦
- Before you listen to these morons, just remember that before they made it bigā¦
- Jim Carrey lived in a van (Just Like me!) before he made it.
- Halley Barry stayed in a homeless shelter.
- Suze Orman lived in a vanā¦ just as I did!
- Actor Daniel Craig slept on park benches.
- Chris Gardner slept in subway bathrooms.
- The singer, Jewel, was homeless.
- Jennifer Lopez slept in a corner sofa at a dance studio.
- Harry Houdini was a panhandler.
- Steve Harvey lived in his car.
- Hillary Swank lived in her car.
- Drew Carey sold his plasma for money.
- ...and Ryan Herron (Myself) lived in a van for 4 years.
My Salute!
So here is my salute to people who call you worthless, crazy, or any derogatory name, while you are learning to trade, or learning to do whatever you want in life. This is the way I treat all of the Nay Sayers, All of the Anal people that will never amount to anything, and all of the stupid pieces of garbage that only want to keep you down on their levelā¦
...or to be a little nicer...
Finally you can say, ā Heck Yeah, I made it!ā
- You get back in your closet or garage and continue to evaluate and test and figure and erase and draw.
- You continue, harder than ever before, to adapt and see what others canāt.
- You give your everything.
- You stay up late.
- You avoid your friends phone calls & even kick your friends out so you can work alone.
- You work harder than you have ever worked in your entire life and then one dayā¦ Get ready because it WILL come if you do not give upā¦
As you continue to refine your strategies and start to turn those loses into winning accounts, your attitude starts to improve. Day after day, you start to get better and better. At this point, there is no turning around because you have done the work and put in all the time that others would refuse to put in. Even if you are not making a lot of progress, you have crossed that magic threshold ofā¦
51%.
Fifty one percent is the magic number. Whether it is 51% of your ATM trades are profitable or you are making a profit of 51% on all of your total profits and losses combined.
When you reach this point, you are unstoppable and will never be stopped again. You canāt just sit back and smile forever because the market is always changing but you now know how to adapt to the changing market environments. You now know what to do then the evil market makers pull the rug out from under you. You know how to cap those losses.
You may not be making a million bucks a year but you will feel like a king at this point. From this day forward, you know that no matter what, you have the knowledge and power to overcome the market. You are now successful, whether making $1 per day or $1,000 per day. It doesnāt matter.
Did you know that if you make 20% PER YEAR, you are in the top of the top, the cream of the crop, the best in the world.
Freedom!
When you reach this point, you have given more effort than the overwhelming majority of so called traders out there. You have spent sleepless nights, sweaty day, cried, made yourself sick, mentally abused your mind, and just gave every dang ounce of energy you have to this profession. You have persevered and prevailed.
You never ever have to clock in at a job againā¦ ever! You are your own boss and can work whenever the flim flam you want to. I donāt suggest sleeping in till lunchtime because a good work ethic means a ton but you can if you want to.
You can go on vacation on your own timeā¦ not when some mid-level manager tells you to. You can take a piss when you want to, not when a line manager says itās break time.
This freedom of working for yourself means the world and you are now here! Congrats!
The majority will never make it this far. The majority have given up a week or a month after they started trying to learn this business but not you. You have made it. Never again will you ever fret over which strategy works and which one does not because you can spot a piece of garbage a mile away now. You have the mental aptitude to see, in a few seconds, if something is worth looking into.
You are a trader and you will be for the rest of your life.
Credit where credit is due: My inspiration for this article was a post made several years ago here https://priceactiondaytrader.blogspot.com/