Maybe you are not cut out for this…
Not everyone can be a doctor, baker or trader. Is this really for you?
Let’s find out…
My goal is to create winning traders. I have probably done more of that than anyone in recent memory. I have students in almost every country of the world. So I don’t want just any student. I really don’t want you to become a student unless the chances are good you can do this successfully.
That means it’s time for you and I have a heart-to-heart talk. We need to know if you are really cut out for this… If you are not, you need to run away from this stuff as quickly as you can because it will not end up well for you.
It will not be good for me and will not be good for you, nor will it be good for your family. Those things concern me much more than you paying a small amount of money to become a student.
Let me tell you what I think is the personality needed to be a good trader…then you can judge for yourself if this fits you or not.
I think the most important thing that I have seen in highly successful traders is their ability to accept that the markets are imperfect, and that we will never be right or correct as traders. We never have enough contracts on the winning trades. We have too large a position on losing trades…on it goes. There’s always a better point we could’ve bought, or better point we could’ve exited. This is not a business for people that "have to be right".
If perfection is important to you, then find the delete button. Now. This is not a perfect business. We use math to help us in this business and math is perfect. But you cannot make an imperfect thing, like the markets, perfect by using math. There are many irrational things that happen, news shocks are the largest.
This business has two parts to it…the first is intellectual… you must study and figure out what works in trading. The other is emotional. Just because I understand the market doesn’t mean this is a cream puff job. When I have a position move against me I get frustrated. When I get out too early or too late, I am frustrated and often angry at myself. You have to have an ability to handle or modulate your emotions to succeed.
My son, Dr. Jason Williams, is a psychiatrist trained at Johns Hopkins and George Washington University. Recently he began looking at commodity traders, successful ones, with some tests devised at Johns Hopkins. A couple of things popped out that I think are highly significant and will help you understand whether this business is for you or not.
There seem to be two critical elements. The first is your ability to stay focused and do what needs to be done. Can you see a task through to completion? Can you handle basic details without getting distracted? If you answer yes to those things, you can probably handle the day-to-day dealings in the marketplace.
Unless you are too emotional or neurotic. Do your emotions run from hot to cold? Do your emotions bounce all over the place? Do people tell you that you fly off the handle or do you have large emotional swings. If you do…or if you’re on any sort of psychological medications…I don’t think you should be trading.
A good trader doesn’t have to be the best detail person in the world, but he or she needs to be able to handle details. Additionally, a good trader needs to be able to handle their emotions, not letting them take control of you. If that happens your emotions will take control of your trades, a sure fire formula for disaster.
A final point here on emotions is that I think you must thoroughly enjoy doing what you do. It doesn’t matter what it is. If you thoroughly enjoy trading then you should be a trader.
Also, do you have an unrealistic expectation you can make $1,000,000 starting with $10,000 by just reading a book? Then you should not become a trader. This is not an easy business; the highs are wonderful but it also has lows. All the money in the world is not worth making yourself a nervous wreck.
What I love about this business is that our opportunities to the upside are unlimited. My dad went to work in a refinery every day of his life knowing his income would not exceed a certain level. How he did that, I will never know. My admiration for him skyrocketed when I realized what he went through.
As a trader you can create a profitable business, on a full or part-time basis. Best of all that can be done without any employees, without a boss and not even any customers! That’s what attracts me to this business… I hope that’s what attracts you.
In my next lesson I’m going to teach you an entry technique.