Trading Platform

The reality of trading

It is not a secret that for a few years now, trading has reached levels of popularity never seen in Latin America. This is due to several factors: among them the ease of investing today, which is just one click away; and also the inherent appeal and “status” of the stock market. This is why many actors develop around this great business, one of them is: trading academies / influencers. Which are divided into two types. There are those who use teaching and marketing methods responsibly and professionally. On the other hand, there are those who do it in an unorthodox way.
And they are these, the second class, which find a market in a society that is socially, economically and culturally beaten. This is because there are a large number of people who seek in trading, “the big blow”, the tool that will make them become millionaires from one day to the next, the vehicle that will solve all their economic problems and they want this with the least possible effort. But the reality is completely different from those easy ideals. The truth is that between 90% and 80% of traders lose money and approximately 85% of “new traders” by the third month have already abandoned trading.

Next I will develop two of the most destructive thoughts and “eliminate traders” that exist. and you will understand the approach that you should have if you want to become a professional, consistent and profitable trader over time.

The first thought is: wanting to dedicate yourself only to trading. This is one of the most destructive thinking for traders today and from this thinking several truths are broken down that new traders must understand and adapt. Unfortunately, this thought is created because it is conceived that trading needs a few hours a day to generate profits. That is completely wrong. Trading like any other profession takes time, studying and practicing to become a professional in it. It is said that someone in their area is considered an expert when they have invested more than 10,000 hours in it, and with only a few hours a day that path will take a long time. In favor of trading unlike other disciplines, here we can practice from day one and this can be done without risking a single penny of our capital.

Now, trading alone is stressful and the best way to stay in it is by lowering the emotional burden. Trading has a high intrinsic emotional charge with which traders have to learn to live with it and know how to handle it, but it can never disappear. The duty and responsibility of a trader is to add as little external emotional charge as possible to that internal emotional charge, and wanting to dedicate himself only to trading, it is the opposite. Because first in my opinion, it is an absolute financial irresponsibility to have a single income in these times; Second, the gains in trading are never constant, unlike a fixed salary, the trader must understand that each month they will have different returns and may even have negative months and if their economic situation is solved only by the benefits / losses that they generate in the trading, how are you going to pay your monthly fixed expenses if I do not generate income, on the contrary, you lost money, this situation is very likely to affect you emotionally and lose objectivity in your analysis, which could lead you to commit actions that are very harmful to your capital such as: not following your trading plan, not cutting losses quickly, increasing stop loss, entering a trade without stop loss, increasing lots / contracts, wanting to enter without following your entry patterns, among others. These actions could lead you to lose all or much of his capital.
This is why it is much healthier to learn and practice trading considering it as another source of income. That is why the trader must develop healthy financial intelligence while learning to trade.

Another common mistake is wanting to invest NOW !!. You have to understand that being a trader is a time process, which must be carried out with discipline and methodology. Trading has the great fortune of being able to understand, practice and validate without risking or investing a single weight of your capital. It is as if Apple were to release a new product and in research and development, production, marketing and distribution of the product, you do not have to invest a single penny on the dollar. Before investing, you must understand the market, understand how the business works, create a plan, measure that plan, review that plan periodically and make the necessary adjustments to improve more and more. In other words, validate your product.The trader must first focus on developing as a trader before worrying about the investment and what you can do is that while you are in that development process save, what your economic capacity allows, and once you are the validated product will be able to invest in it. It should be noted that this process does not guarantee 100% of your success in trading, but it will increase your permanence in it by a large percentage.

If you really want to practice this profession in a responsible way, you must acquire the approach of the great, profitable and consistent traders. Which is: trading is a management business, not a production business. The great traders do not focus on how much money I made the trade, but on how much money I am risking to reach that goal. Trading is a numerical business and being such a business makes it easier. If you are one of the traders who focuses on the amount of money your trade is going to make, ignoring the level of risk of the entry, let me tell you that your trading days are numbered.

Understanding trading in terms of numbers and probabilities will give you a longer life in that world. Because in the same way that you manage 500 dollars, so you will manage 10 thousand, 25 thousand, 100 thousand up to where you give it. That is why professional traders keep a detailed record of each of their investments, which allows them to measure their performance and know where the failures and the successes are to improve day by day.
It is also not a secret that people in Latin America lack economic power, which means that most new traders do not open accounts with large capitals and this frustrates them because they do not see attractive benefits. But believe me that if you change your mind, follow the advice shown in this blog; Start by taking trading as another source of income, understanding the market, understanding trading as a business, developing as a trader, thinking in terms of management and probabilities, recording and validating performance. Because a Swiset ratio 2.0 is the same with a 100,000 account as a 100 dollar account.

All this will make you not just another statistic in this world.

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Santiago Valencia

Head of Partners at Swiset