To most people, financial trading is not a new concept. Most have probably seen famous films about financial traders and the stock market. Hollywood has definitely found a way to make trading look exciting and adrenaline-driven; but the reality is not quite that level of excitement. In fact, those within the financial trading business would even say so themselves. This sentiment has been confirmed by the leading expert in the Trading Psychology space, Anmol Singh. Singh is the CEO and founder of Live Traders. The trading firm was voted the #1 Trading Education Firm for three years now. They have helped over 100,000 students learn financial trading across the globe.
Anmol has coached and trained over 1000 traders and investors. Some of them are currently running their own hedge funds and handling millions in revenue. Several students now make six- and seven-figure incomes. He is considered a thought leader in the trading psychology world. That is after helping and working with thousands of traders dealing with psychological and behavioral issues. Today, Singh is still trading in the Stock Market and Forex while spending his days working with students from Live Traders. He is also involved with other entrepreneurial ventures and franchise stores in addition to maintaining a real estate portfolio. Below are some reasons Singh believes financial trading is boring and is not supposed to be exciting, but it is still a desirable field to pursue.
It is a Routine
As mentioned earlier, Hollywood movies and other media sources paint financial trading as an interesting business to be in. According to Singh, any good trading should be a boring process. Walking through the whole process, it really is not that exciting, apart from when you actually make money. The movies will only show you perfect scenes where no actual trading really happens. The experts have already proven otherwise.
The main reason why actual trading is not as exciting is that it involves repeating a working statistical model. An example is: if you know statistically that by paying a particular trade 100 times it wins 60 times and loses 40 times, while for every win you make $2000 and lose $1000 for every loser, that model is mathematically set to make you money. After realizing that as a trader, what you do is you repeat that model every time you trade. The routine is what makes trading monotonous and boring to some point. Many people today are already avoiding nine to five jobs to escape the routine life.
The good thing about trading, however, is that it comes with a lot of freedom. There will be no boss breathing down your neck each second to make sure you deliver results as per company goals. You are responsible for every action in the stock market.
It Should Not Be Emotionally Driven
Trading requires that the trader is in a position to make sound decisions. We all know that any kind of emotion interferes with decision making and in this case, would be bad for financial trading. That means that you cannot be overly excited about a trade. It should never be adrenaline-driven. You should never make a trading decision out of fear, excitement, or things like greed.
When it comes to emotions, you might think less logically and lead you to take unnecessary trades and risks. Remember that money is on the line here, so any mistake could lead to the loss of millions. Singh says that if you are trading and you are excited, there must be something that you are doing wrong. Trading and putting your money on the line is known to have the same effect as gambling or smoking a cigarette. It causes the human body to produce dopamine and serotonin which have a pleasant after-effect and can be addictive. Nobody should do trading for such reasons. The whole process requires control and clear thinking.
According to Singh, “The stock market always goes up. Up and down – but historically, it always goes up. The difference between profit and loss comes down to your understanding of how to trade and your ability to make logical and fast decisions based on constantly changing data.”
So, even though Hollywood paints a glamorous picture of financial trading and the emotion involved, based on these key elements such as establishing routines, and keeping emotions completely out of the equation, as Anmol Sign points out, it can be seen as boring indeed. Nevertheless, for those out there who are willing to make reasoned and logical decisions and have flexibility and freedom, then the financial trading business could be perfect, and it can result in great success, even amidst the boring process it is meant to be.