When it comes to investing and trading stocks, most people, as we discussed in the last episode, want to know what is the best stock to buy. The question that never seems to get asked is: “Who do I have to become to be a successful stock trader and investor?”
So let’s explore this question, that I feel really never gets addressed in this industry.
Who you have to become to be a successful trader and investor
A lover of learning
This one is a stickler for most people. Maybe you graduated high school and you thought you were done. Perhaps you went to college and said glad this learning stuff is over. This is probably the toughest one for most people because in order to be profitable in this industry, you have to be willing to learn the industry and the tools needed to succeed. If you are stuck on traditional education – meaning you only learn if it’s in a classroom and a teacher standing up lecturing to you from some so called accredited university – then you may struggle in this industry.
In the stock market, you get your lessons from real life – not a book. You learn from other doers. You learn from non-traditional ways like watching my Youtube channel. You learn by seeing and doing and being part of a community. Also, it’s so much more than book knowledge – it is knowledge of one’s self, which we will get into.
Become disciplined with your time
You have to become a person that understands how to prioritize and get things done. Why you ask? Because the market is only open from 9:30am – 4pm eastern standard time. Guess what that means? For most of you the market is open while you’re at work, so you have to be disciplined with your time to do your research in the morning or after work, while still fulfilling all of life’s obligations of being a husband, wife, father, mother, son, daughter, gym workout partner, and all the other things you have going on.
You have to be disciplined enough to cut the TV off and go watch a youtube video on how to trade options for beginners for example. You have to discipline yourself to get the knowledge and do the research that will enable you to learn how to use the probability and statistics, as we discussed earlier, that comes from reading charts, and your boss isn’t paying you to do it on the clock.
Have vision (long term & short term)
Ahhh vision – and we’re not talking about eyeglasses. This is another silent killer most people have: no long or short term vision. Nothing is more sad to hear or read when someone emails me or calls and says, “I tried it for 30 days and I don’t think I can learn this”, or “I have been at it for a few weeks now and lost some money I don’t think I’m meant to be a trader” – especially when they just told me they were in this for financial freedom or to quit their job someday or retire their spouse.
Really? Did you really think you were going to achieve financial freedom in a few weeks or a couple of months? You have to have the long term vision. If you are going to accomplish things like retiring your spouse or leaving your job, becoming a trader full-time, if that’s what you decide, you have to realize on your way to this promise land there is going to be some bumps and bruises. There is going to be a learning curve, some loses, some investments, some growing as a person. You have to have long term vision for what’s possible, as well as short term vision for what it’s like to enter into a new industry. Think about your first day at work, you knew short term it would be a learning curve and long term it was the best move for your career and family. The stock market is no different, and if you don’t give it the time and respect it deserves, then you do not deserve to enjoy the riches and lifestyle it can provide.
Need to know your “why” & commit
Having vision is knowing why you are doing something. Why are you doing this? Why do you want to learn how to become a stock trader or investor? Here’s some of the top reasons I hear from new traders.
- I want to retire my husband or wife
- I want to pay for my kids college
- I want to quit my job
- I want to become financially independent
- I want to travel the world
- I know there is more to life
I once heard my mentor motivational speaker, Eric Thomas, say: “Is this what you really want, or is this just what you saying with your mouth”?
Everybody wants all of those things, or so they say, but are you willing to commit to doing what it takes to having it? Are you a person who just runs when the going gets tough? Do you just jump from opportunity to opportunity never really committing, never putting any real action behind your words? Chances are you won’t be successful in this industry if this is what your life looks like, and I’m talking about from your marriage, to your work life, to relationships with friends. If you have a problem with commitment and are unclear on your “why” – then you will not survive in this industry.
Learn to control your emotions
The stock market can be an emotional place because it is an industry where you can lose money, and that is scary to some people. However, it is also a unique place where you can have your money work for you and produce and endless supply of cash, which is exciting. This brings on the two emotions that trip most people up “fear and greed”. Some people fear losing money so much that they never get started and some get started and make a profit but because they are too greedy to sell and lock it in, they end breaking even or, even worse, losing it all.
You have to control your emotions. Don’t get too high on the highs and don’t get too low on the lows. Know that winning and losing is part of the game and as long as you lose small and less often and you win big and more often, then you will be ok.
A giver of money
Give money away – by doing so the act alone helps with controlling your emotions when it comes to money. Live your life generously and as if you have an endless supply of money. If your thoughts about money are ones of lack, or that there will never be enough, you will trade that way. You will trade scared and you know the saying, “scared money never wins”. A good place to start living abundantly is to start with your local church and give 10% of your earnings away. If the Girl Scouts come around with cookies and you’re on a diet, buy twice as much as you would have if you weren’t on a diet and then give the cookies away. It’s not about the cookies – it’s about having an abundant mentality and letting money go so that you can control your emotions over it and not let it control you.
In closing, you need to be a lover of learning and in turn a lifetime student of this game. There is no graduation, someday you will become the teacher sharing this knowledge with your kids and your grandkids. Become disciplined with your time, because most of you have only a short time to make this happen before and after work and it’s going to take some sacrifice from the TV and other extracurricular activities to get this thing mastered. Have long and short term vision, where do you see yourself in 6 months, where do you see yourself in 6 years, remember this is a marathon not a sprint. This one’s especially important know your why, who are you doing this for and what are you doing this for. This one also helps with your vision if you know your why. Last, but not least, control your emotions if you start making a lot of money, don’t get too big on yourself, and if you lose money don’t get too down on yourself. Remember: it’s all part of the process.
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