Trader Expectation vs Reality
When you are early to trading, your expectations and goals are fueled by predominantly successful, advanced traders and online trading mentors who entice us with dreams of making millions from a laptop in no time at all. But is that the reality? Day Traders Becky & Kendra would argue that it is often not an accurate representation of reality and today we confront the truth between realistic expectations for a trading career, and unrealistic expectations. From timeline to indicators, and emotions to daily income, we Market Mamas cover it all in this episode.
Let’s just get this one out of the way right away. Don’t rely on any magic indicators for your trading signals. These are beautiful and can be a very valuable tool, but remember everything works some of the time, nothing works all of the time. Hindsight is always 20/20, but when your data is printing in real time, it’s much harder to read, trust, and act. Some are excellent at key inflection points, and others are better at certain times of day and in certain types of volatility. But there is no gold standard indicator that can be your answer to consistency with your trade entries. Totally cool to explore them and see what speaks to you and how, but we’d advise to weigh them as just one small piece of all your data you will use to make your trade plans, as we market mamas do.
Don’t get lost trying to figure out multiple strategies, stick to building an edge and continuing to work on it. There’s probably never been a time in history where there were more trading edge styles and strategies available to study and learn. We think it’s awesome and such a cool thing about trading and how different we can all participate in the markets. It can be easy to get discouraged as a young trader when you are not immediately successful and think the answer is a new style or strategy of trading. But you have got to give yourself enough time to 1) have a large enough pool of data to prove if your edge is or isn’t profitable, and 2) give yourself time to mature in your trading process and psychology to even effectively run your trading system. There are extremely basic trading strategies to very complex styles of trading that can both become very successful trading edge if built upon the right foundation.
Pain is your biggest factor for growth. Yes, you read that right. You need to endure painful experiences and be resilient with the outcomes and feedback that the market gives you. This is a refinement process, it hurts, the lessons sting, it takes time to accept and endure this reality of trading. It’s certainly not represented enough in most mainstream trading content. It’s hard to talk about. Even for Becky and Kendra, whose main aim was to normalize this fact and be a safe space. If the reality of the pain it takes to go through and grow through was the trailer to trading programs, many people would not even entertain the idea. As it is, many cannot withstand it once those painful hits start to accumulate from your failed trades when you are still learning. There’s a lot of darkness you have to walk through, and we say walk because you can’t run from or avoid it, if you want real growth and to build strength as a trader.
Speaking of trader psychology, only experienced traders will really understand the value of being in tune with your emotions as you are trading to identify greed and/or fear that could come into play during a session. Sure, it’s discussed and you will find advice in all the trading books, however, it’s so tricky and different for everyone. Many times it’s not about the charts, it’s about you, who is showing up that day. Markets are always uncertain and that’s where our opportunity comes from. But we have to be empowered by the certainty of how we will intentionally participate on any given day. Having those full-body scans and emotion check-ins are critical to support and serve yourself so you can be level and ready when it’s your trading session!
“In the long run, the most unpleasant truth is a safer companion than a pleasant falsehood.”
~ Theodore Roosevelt
If you really want to be a consistently profitable trader, keep a long game mentality! Trading is not a get rich quick scheme and rushing progress is unrealistic. And that added pressure won’t help. Let success be an organic outcome of hard work.
You need the early years for experience. It’s unrealistic to think you can be consistently profitable without putting in hours and hours of trading and studying and taking this career education seriously. Learning a business as dynamic and high stakes as trading requires a reasonable period of time and financial investment to be schooled. Then the early, small profits can start building as your skill builds.
And let’s normalize this part right now: Early profits should be small. Few hundred dollars a day is great to start! You have no business trading heavy when you’re still fine tuning your skills and setups. Start compounding and leveraging up AFTER you find consistency within your setups. This is far more sustainable of an approach than a boom and bust cycle.
Shut down the comparison as soon as you sense it. There’s so many styles and ways of reading and trading the market. Comparison is dangerous and can steal your joy and confidence. Others’ outcomes are never going to be identical to yours. Your strength can be someone else’s weakness and vice versa, trading is already complicated enough without wishing you had had a great trade that you heard another trader took. Focusing on our own process is so much more peaceful. Lean into how the market speaks to you and what your strengths are. The only comparison taking place should be internal and used in identifying the targeted areas you need to improve. You can try to beat who you were yesterday if you need an adversary.
Many traders who post their trades, either in a private community or public social media platform, post their wins, but not necessarily their losses. Don’t compare yourself to figures in the media. Often that is a false representation. So why compare when you don’t have their full, objective trade execution history fully revealed to you. Tune it out! As those comparisons are inaccurate at best and unrealistic when you try to compare to your actual truths. Those catchy headings stating this trader “Grew a $500 account to a 5,000,000 account in 6 months are often dramatized and don’t reveal most of the backstory and losses that built to that report. And as a young trader, that can be toxic to even worry about. It’s fine to see some excellent traders on YT or whatever, but prioritize the respect for their journey and choose to be inspired, but know that it may take a long time to get to that level, depending on your circumstances. Reframe looking at other traders wins as a source of inspiration and possibility, but it’s THEIRS, not a reflection of your progress. Trust that your season is coming and your wins will be YOURS.
Even when you get a real edge, you should not expect to win every time. A 70% win rate is a really great setup. Don’t aim for a 100% or even 90% win rate because that is very unrealistic and could paralyze you. There is variance in the market and factors that you will not always be able to see coming. So practicing until you find a 100% holy grail setup to really start trading is a recipe for never even leaving the starting gate. Not wanting to factor in red days is a very hard obstacle to overcome, but it’s part of a winning strategy. Not accepting this fact leads to forcing yourself on the market during less than ideal trading conditions which can result in lower confidence in your edge when your edge was NEVER the problem. It is the most realistic to aim for and be content with a 60-70% win rate as success!
It is also unrealistic to assume that your first mentor and educator will be all you ever need. Let’s be honest. There are many styles, teaching methods, and techniques that trading programs will offer. Once you have learned all you can from your early mentors, feel free to shop around until you really find a method and personality that is right for how you learn and how you see and execute in the market. Then you can settle in and really aim to lock in your best system. Your first might not be your best. But we are always students of the game and our trading can evolve as we develop stronger skills and mindset to sustain us in this pursuit.
This was such an important discussion for young traders. There’s more expansion on these topics in the full podcast episode, so check that out too for all the gems! Thank you to everyone who is subscribing to our podcast, reading our blogs, and providing us feedback! We are here to talk openly about everything that may help us all level up within our lives, be it day trading or otherwise. We wish you all the very best for your lives!