Starting Your Trading Career? Three Important Requirements For Your Success. If you're considering becoming a trader, this simple guide reveals the profit behind the profession.
By Andrew Aziz
Opinions expressed by Entrepreneur contributors are their own.
Being a professional stock trader used to be out of reach for most people. Not anymore. With smartphones, anyone can now potentially turn this hobby into a viable professional career. I should know. I began trading back in 2013 and it's now my full-time profession, along with running my trading communities, Bear Bull Traders and Peak Capital Trading.
Just like starting any new business, jumping in without preparation is asking for disappointment. I've realized there are three things every trader MUST have in place if they want to turn a side hustle into a successful entrepreneurial venture.
The most entrepreneurial generation is honing in on trading
In 2019 Millennials surpassed Boomers as the largest generation in America. Today there are more people aged 23 to 38 than any other living age group. Famous for their "do it yourself" attitude, it makes sense that Millennials are also the most entrepreneurial generation. They have seen what being employed at the mercy of someone else has done to their parents during both the recession and now with the pandemic. This generation is demanding a different future. For many, that means self-employment via trading.
Technological advances have made it easier and there's even a name for this new breed of market enthusiasts: Robinhood Traders. Millennials who want to learn to trade can, right online. But just because being a professional trader is more within reach than ever before, doesn't mean everyone can grab it.
If you're considering becoming a professional trader, there are three things you need in order to see success...
Technology
Like any other business or startup, new trading entrepreneurs need the right tools to do the job and the training on how to use it. Once upon a time, the best advanced systems were only available to Wall Street elites. But recent breakthroughs in information sharing have made trading technology available to anyone with a smartphone.
Your shopping list should include scanners, a direct-access trading platform and a good discounted broker. You'll also have to learn how to make use of such things as indicators, moving averages, charts and price candlesticks. Whatever tools you choose in this endeavor, make sure you are completely confident in your ability to use them along with acquiring the most reliable internet access. Having your WiFi go down in the middle of a critical trade is a new level of hell.
Related: Interested in Day Trading? Get a Primer With This $30 Bundle
Strategy
Having the best tech is usually not enough for any endeavor. Imagine a driver who just bought a Ferrari but can't drive it because it's a stick shift.
Make sure from the very beginning of your trading career that each trade you make follows a solid strategy. Trading is a complex network of interconnected data lines, and without a strategy, it's all too easy to get "swept up in the moment" and lose big. I see many rookies jumping in and out of trades without having a well-thought-out plan. They may see good results now and then, but without a strategy, they'll never enjoy the consistent gains they need to create a stable and reliable business from their trading venture.
Related: Do You Have Any of the 5 Traits Shared by Successful Traders and ...
Psychology
The difference between gambling and trading is mindset. In the latter, your decisions should always be based on planning and controlled emotions. The more you can leave feelings out of it, the better. If you find yourself buying or selling because you're only wrapped up in the excitement of making money---you're not trading, you're gambling. Unless you've got the mentality that trading is a business, and making trades equates to making "smart business decisions," you're not ready to turn your trading hobby into a business.
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Mentorship
I know I promised you a trilogy, but here's a bonus: mentorship. Learning to trade is difficult. You can have the best technology, a solid strategy, and the right mindset, but it's still going to be tough to get the hang of trading like a pro. Having a mentor connects the trilogy with reality, helping you decide what to do in real time to trade like an entrepreneur.
In Bull Bear Traders and Peak Capital Trading, I see people accelerate in their own trading careers exponentially faster than DIYers. Why? Because they have mentors to whom they can ask questions about their real-life trading experiences. Also, our traders become part of a worldwide community that they can lean on for support. Making trades in front of a computer can be a lonely business. Being part of a community helps you build your own business and lets you weather the ups and downs of the market.
The resources you need are out there
Technology, strategy, and psychology are the three pillars of success for trading startups - remove one, and everything will collapse. Strategies are now readily available on the internet and much of it is at no charge. Building the right mindset can be more tricky though. Be honest with yourself about how your mind works and find quality resources that help fight your worst urges. A great mentor that's willing to "run beside your bicycle" is out there too. You just have to look.
