So You Want To Be A Trader

There are lots of people that can give you advice on how to become a trader.  I am not sure what’s great advice and what isn’t.  I have my own opinions.  In the old days when I traded, you not only needed some mental characteristics but you needed physical characteristics too.  With the advent of screen trading, the best thing big people can do is buy a really good chair.

The great thing about screen trading is no one cares who you are.  No personal relationships enter into if you get filled or not.

If you are a big video gamer, those things are teaching you next to nothing about trading in a real market.  Video gaming is pure entertainment, it’s not a vocation.  You are better of spending a lot of time on Brilliant instead.

But, let’s ignore all that.  What sort of ways can you prepare yourself?

1.  Learn calculus.  Learn it really well.  Learn how to see calculus in the market.  Calculus disciplines your mind and helps give you vision.  The word Calculus comes from Latin meaning “small stone”, because it is like understanding something by looking at small pieces.  Markets are like that too.
2. Probability and statistics will help you understand risk management.  It also helps you understand whether to potentially do a trade or not.  However, if I was going to pick understanding calculus or probability, I’d pick calculus.
3. You can’t be afraid of failing.  Trading teaches you to fail, a lot.  If you are a controlling personality, trading might be tough for you.  If you consistently beat yourself up or don’t have a short memory, you should not trade. You will get depressed.
4. Competitive.  You have to be competitive.  Athletics is still a great proving ground for that but suppose you are unathletic.  Do something else that is competitive. Could be competing for first chair in the band.
5. Stubborn, and not stubborn.  This follows the adage, “Strong opinions loosely held.”  Okay to have an opinion but when Mr. Market tells you that your opinion isn’t worth much you better change in a hurry.  Here is an example.  Suppose you looked at Tesla.  You thought, this company’s balance sheet looks like crap and they are purely surviving because of government subsidies.  A lot of the management actions in the past looked shady.  You decide to short it….how’d that work out for you if you were super stubborn?  Sometimes though, it pays to be stubborn.  If you are going to make a lot of money on a trade usually no one else sees the same world you are seeing.
6. Be consistent.  Do it all the time every day.  Put in your 10000 hours.  Tastytrade or TopStep Trader are great places to do that.
7. Start small, grow tall.  Take small shots, lose small money.
8. Don’t listen to the smart money.  Everyone is out there touting something.  Learn to be independent and make your own decisions.  When it works out, it helps you build confidence.
9. Go to college and get a degree in math or engineering.  Finance or Econ are okay but a math degree is the best. Hey, at least if the trading thing doesn’t pan out you have a degree you can fall back on.

The best thing about trading isn’t the potential money you can make.  It’s the autonomy.