One of our members recently asked me a question regarding the difference between longevity in trading and long term trading. Longevity is the time duration for which a trader wishes to keep trading, that is becoming a professional trader. While some people perceive trading as a side hustle or a trial and error sort of business, others have made life long fulfilling careers out of trading and continue trading even in their “retirement” age. Here’s the first part to answering this question, I start by addressing longevity.
In my opinion, once you set up your mind to become a trader, longevity should be one of your main goals. If you are to gain any remarkable experience in the markets, the lessons to be learned are many. You will fall in love with some. Others will be painful but memorable. Both are essential to helping you achieve longevity. Imagine training to represent your country in swimming at the Olympics. First of all if you want any desirable results, like any other competitor, you must know how to swim, pretty obvious. Thereafter, you will put in the hours in training you need to compete by continuously practicing until you can beat a certain time record you have ever hit at the style of your choice say backstroke.
It is no different in the markets. Trading is a skill based profession and the only competition you have is against yourself. Depending on your personality and the foundation of your basic training, you have a wide variety of trading styles to choose from. Your style of trading is cultivated over a number of hours of time spent trading learning what works and what doesn’t work for you. Some people could be good at day trading, others would make great swing traders, others would be position traders and others would be excellent scalpers. The bottom line is, you have to understand the basic rules of trading prior to engaging in the business. Working towards longevity involves continuous self-improvement in your trading skill.
Some tips I have gathered along the way to help me focus on trading with longevity in mind include but are not limited to; being well capitalized from inception, abiding to my risk tolerance levels, treating the business with the respect it deserves as opposed to taking it as a hobby, sticking to my trading strategy, continuously learning from my mistakes, having a trading community and support group, recognizing that ego, fear and greed has no place in the markets, seeking growth and productivity by having professional traders as my mentors and the fulfillment realized from trading gets me anticipating for more each and every day the markets are open.
Trading is not for everyone. It is okay to begin the journey and self-evaluate whether you’re really passionate about the markets after a certain duration of time. Starting by asking yourself why you got curious or interested in trading might be a good place to begin interrogating yourself if you are doubting whether you can last in the trading business for long. However, allowing the challenges experienced from trading in the markets to weigh you down isn’t an option if you are to be successful. Persistence, dedication and discipline is mandatory to help you achieve longevity. (Look out for part 2 next week, I will discuss long term trading).