Trading is a Personal Journey

The world of trading fascinates many people, but getting started on the right foot means understanding a fundamental truth: trading is highly subjective. There is no universal recipe for success, no standard path that applies to everyone. Every aspiring trader will come to terms with personal factors – such as one’s risk tolerance, available time and ability to learn – and external variables, including market dynamics and the innumerable unknowns that can influence the outcome. This subjectivity is what makes trading so complex, but also incredibly personal. One should therefore not seek shortcuts or blindly imitate someone else’s path.

The Importance of Introspective Analysis

First of all, it is essential to take a step back and reflect on yourself. Trading is not for everyone, and the first question to ask yourself is: why do I want to trade? It is crucial to be honest and understand whether one’s desires and goals are realistic and compatible with the challenges involved in this activity. Many people are attracted by the idea of freedom that trading can offer, a prospect far removed from the routine of a salaried job. However, one must consider that this freedom comes at a price: the ability to tolerate risk.

Risk aversion is a profound aspect of personality, and cannot be eliminated simply by deciding to ignore it. It is an often deep-rooted psychological reaction that can emerge strongly in times of difficulty, influencing decisions significantly. If one is not prepared to deal with the emotions that arise from unavoidable losses or periods of poor performance, the risk is to make impulsive decisions or abandon the course before developing the necessary skills.

For this reason, before starting out, it is crucial to honestly assess your risk tolerance and accept that trading, rather than a promise of freedom, is a challenging journey that requires discipline, patience and self-control.

Study, Simulation and Risk Management

Another crucial element is the availability of capital. In the absence of adequate resources to absorb the inevitable initial losses, the first step should be to study the different financial instruments: shares, options, forex, cryptocurrencies, and so on. This study should not be superficial, but aimed at understanding which instrument is more in line with one’s inclinations and abilities. Once one has identified one’s instrument, it is advisable to move on to a simulation phase on a demo account.

However, to make the process realistic, it is advisable to simulate with an amount representative of what one could actually invest. This helps to develop a mental discipline similar to that needed in real markets. Simulation, if taken seriously, can become valuable training to improve confidence and risk management.

Finally, continuous monitoring of one’s transactions, preferably over a long time horizon, is the best way to gain experience. This process may take years, but it is indispensable for building the foundations of a solid trading career. Experience, combined with an established method, is what distinguishes the professionals from the amateurs, allowing in the long run to extract value from the markets and turn trading into a real profession.

Best regards,

TradingQuant