The Truth Behind Years of Investing in the Futures Markets.
The stock market and the futures market have something in common that keep entrepreneurs coming back everyday.
This is no secret to anyone, but the allure of potential profits and financial freedom have taken more people's hard earned money than gave away riches.
So why do people trade at all?
Since starting my trading journey back in 2018 and having multiple people ask me the same question, why do people trade at all?
I have come up with a few pros and cons for the question at hand, and I'll start with the pros.
Pros
- Trading gives people a sense of freedom and entrepreneurship , there is no one monitoring your trades. If you wanted to put in an order for execution at the market and risk all your 401K, you can do that and only you have to deal with the consequences
- Trading gives people a sense of purpose. The amount of times a friend has came to me and said "Man Chris if I can learn how to trade I could leave my job and do what I want". My father has even asked me about trading and if I could manage an account for him. This is all positive and I encourage my friends and my father to pursue the journey of trading. The only problem is I believe this searching for a "purpose" in trading can be a double edged sword.
- Trading gives a people a chance to become rich. The markets are a place where massive profits are made on a daily basis, this type of money truly can't be made in any other professions.
Cons
- New traders have never dealt with their emotions when it comes to loss. Most people are not able to handle loss. Let's think about how hard it is to lose a family member, a friend, or even a household pet a.k.a your fur baby. This emotion has made countless people lose their lives and everything they ever built in their lives. The emotion of loss is one of the first things I tell people to work on. There can be months on months that you lose in the markets and make no profit, most people don't think about this at first. All they see and believe is; if they can get this skill down they can become rich, but if you go to any brokerage website and scroll to the bottom of the page. You will see a statistic that more than 90% of traders lose their money, this is not by coincidence.
- Trading is an expensive game. I get it; okay, I was in the same boat. I first started trading with about 700 dollars that I saved from my 9 to 5 job and I was so excited to take on the journey. After putting that money in a sketchy overseas brokerage account, that's another story. I quickly learned how much it truly took to trade. If you ever want to make real money in the markets, you have to have an account that can make big money. Most people don't understand margin requirements, slippage, or commissions and this is mandatory to understand if you plan on trading correctly.
- Trading is a patient game, there is no holy grail system or strategy that will make you rich quick. If you want to get try and get rich quick head to Vegas (shout out to Vegas) and bet all your money at the roulette table. You will have a better chance of getting rich there than in the stock market or the futures market.
Overall, when I get asked the question, why do people trade at all? I tell them why I trade and it's because trading is a game to me. I would trade even if I didn't make any money at all from trading. I just love the creativity and the systems that can be created from trading the financial markets. Trading definitely isn't for everyone, but with a realistic expectation of the markets and a constant learning about the markets. I believe anyone could learn how to trade efficiently for themselves. Stay Frosty!
Patience is essential for trading. When there is nothing to do, do nothing.” – Jesse Livermore.