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Can Anyone Become a Trader?

May 29, 2019

The quest for trading success is growing. More and more traders are entering the markets with dreams of riches beyond the point of avarice.

But do many actually succeed? Whether yes or no, what are the odds? Why do some people make it and some do not?

I present my two pence on the subject. Please feel free to agree to disagree. The moot question here is - are good readers born or can people be trained to become good traders?

Opinions are divided here. Some (myself included) believe are good traders born. The talent, the aggression of a hunter-killer, the patience of a stalker or an assassin cannot be imbibed by magic pills. You either have them or you don't. Ask and answer this question yourself - how many really, really timid people have you seen suddenly turning into brave hearts?

On the other hand, you have people who believe anybody can be trained to become a champion trader in a classroom.

Stories of USA's Richard Dennis founding The Turtle Trading School, where traders were mass-produced in classes are attracting newbies in droves.

I am sure that suits the trainers, trading motivators or the seminar conductors just fine. These newbies put food on the table for the non market participating experts and trainers. The ad spends and the course fees are not even funny.

It is like asking gutka manufacturers if chewing gutka has side effects. As a vested interest party the manufacturers obviously say no! Now ask yourself - can a trainer train an average guy on the street to become a brain surgeon or an astronaut? How about a nuclear submarine commander or a rock singer? I'm sure you get the drift, dear reader.

Classroom training is like a chisel that chips away at the sharp edges of the rock. The statue is actually the rock itself. The classroom trainer is the sculptor who chips away all the extra pieces of rock to make the final piece of art.

Similarly unless the aspiring trader has the inbuilt talent and capability to trade successfully, no amount of training for mentoring will help really. Without the skills and the fire in the belly, you might as well forget about it. Unless the foundation is strong, no construction above it can sustain.

This little inconvenient fact is something the training industry won't tell the participants. On the contrary, these guys seem hell bent on impressing upon people that with the right training a Lata Mangeshkar can become a Mary Kom!

Please understand that between 5% - 8% of all traders will see their 5th year of trading and that too not necessarily profitable trading. That is if they last this long.

So we have seen how the killer instinct, the aggression, and the staying power are things that you are born with. This means you either have it, or you don't. Ditto for your skill sets.

Some folks are right brained (emotional) whereas some are left brained (logical). Traders need to be specifically left brained - cold, tough, resilient, and emotionally shockproof. Three decades ago, it was believed that these attributes were genetically bestowed upon us. Just like the hard wiring of your computers BIOS system in its onboard chips.

But new behavioral finance and neuro linguistic programming (NLP) can help change behavioural attributes of a person to a limited extent. This means you cannot be both Jekyll and Hyde, in one lifetime.

There is this one last aspect of trading - emotional discipline.

It comes from formation of habits. That is an issue of self regulation or self control. The discipline to trade only when justified, to stick to your stop losses, and to exit when required. These qualities in a trader are non-negotiable.

So realistically speaking, if you are a trader, but a mediocre one, training and self improvement sessions will definitely get you better results. Maybe even far better results, but will probably not make you a championship level trader.

Can you reach a level of proficiency where you can run your house on trading? Over a period of time, yes! It is possible. That milestone can be reached.

But like training for any competitive sport, you will need a few years trading experience, practice and perseverance to reach there.

Just remember one thing - realistically speaking; only 5% to 8% traders survive beyond the first 5 years. So if you make it there, enjoy the rarified atmosphere of exclusivity and privacy. There will be few, if any, known competitors there with you. I call it the 'Nirvana Zone'.

I hope to see you there!

Have a profitable day.

Warm regards,

Vijay L Bhambwani
Editor and Research Analyst, Weekly Cash Alerts

Vijay Bhambwani

Vijay L Bhambwani, is the editor of Weekly Cash Alerts and Fast Income Alerts. He is a professional trader, author, trading mentor, and lifelong student of the markets. He has been an active trader since 1986. Financial markets are his life and passion. Everything else in his life revolves around his main objective - trading. Vijay believes that no matter how much a trader has lost in the market, it is possible with hard work and smart work to get it all back over time. Understanding the method behind the madness of the markets interests him more than the profits. He specialises in predictive style of technical analysis, in the commodity, currency, and equity markets. That is the foundation stone of his style of trading - Neuro Behavioural Technical Analysis. Vijay trains other professional traders. He is empaneled with the BSE & NSE as a visiting faculty for various finance market courses. He created the early course content for the Diploma in Commodity Markets (DICM), certified by the Forward Markets Commission. He was a training mentor at the MCX between 2005-2009. He is the first author to have his book - A Traders Guide to Indian Commodity Markets published by CNBC Publishing 18, in 2009 - approved and sponsored by the NCDEX. Vijay has done over 8,000 TV shows in the last 17 years and has written over 4,000 columns/articles in the print and electronic media. He is one of the first columnists to write a weekly column in the English language print media after the commissioning of the MCX, via his columns in the DNA Money, Business Standard and others. Vijay lives with his family in the posh Breach Candy area in Mumbai.

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Dec 1, 2020 02:48 PM