The Black Hole of Trading part 1 of 6

Let’s assume you have never traded. You have never directly bought a stock, an option, a CFD, a futures contract, traded a commodity or speculated in the 24 hour a day forex markets, but you have decided you want to become a trader or an investor.

Now what? You decide to ask a few friends, maybe search the internet, flick through some magazines, ask your advisor, your accountant, or maybe your parents. You subscribe to a newsletter or two, a magazine or you start to look through the financial section of your newspaper. You contact a few brokers and have them send out some information and so on.

What you most likely end up seeing is a lot of the same thing; trading has become easier for the small trader, more efficient, it’s online, cheaper and there is more help, more ideas, more methods and ways to make money and so on. You think to yourself, ‘well, I’ve never even traded before so all this means very little to me, but hey, if it’s so easy then I’ll have no problem becoming a successful trader and leaving my job.’

But here’s the catch….all of this is very true, things have become a lot easier for the small trader ‘to trade’; but trading and using the markets to achieve a goal, are two completely different things.

To trade simply means, opening an online account, sign a disclaimer and agree that you have read the warnings on risk, deposit some money, download the trading platform, open a chart, guess which way the little bar is going and click on buy or sell. It’s that easy!

But to use the markets to achieve a goal, well… lets’ just say that once you begin trading and things don’t seem to be working the way you had envisioned there will be many reasons why, but the majority of times it will be the following:


1. You have no idea what it is you are trading

2. You don’t know how your particular choice of market behaves

3. You really don’t know what it is you want from trading

4. Your expectations are beyond your knowledge, skills or emotional levels

5. You have never bothered to list your resources

6. You don’t even know yourself or you refuse to accept who you

7. You haven’t prepared yourself for trading success

8. You’re not trading a system

9. You’re trading someone else’s system

10. You haven’t done any back-testing

11. If you have back tested, you haven’t analyzed its performance relative to your goals

12. You never bothered to log any of your trades

13. You simply don’t have a business and a system

Over the nest 5 installments I will cover these in more detail and what you need to do in order to succeed in trading.