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Friday, April 09 2021
Do I Treat Trading Like a Hobby or a Profession?
First, let me start out by saying that learning to trade has been one of the best and most difficult careers moves of my life! What’s weird about that statement, is that I haven’t even really made huge profits as a trader, yet. There’s been some crossroads that I’ve had to come to, and when I got there, the decisions that must be made are so incredibly stress full that sometimes it’s just easier to say, “forget it I wanna quit” or “I can’t do this I’m an idiot”, or whatever. And at some point, you look in the mirror and you ask yourself am I a trader or am I a puss and giving up?
For me, the journey has been incredibly powerful. I’ve learned so much about what it takes to be a trader that often I fell short when deciding to be a professional trader. The thought of it just being a hobby made sense to me at the time. The reason it made sense is because it was an easy way out to say, “I don’t have to be a great trader” “I don’t have to do well because this is a hobby.” There’s going to be quite a few obstacles that you must trip over and fall on your face to get to the next level of even determining if this is going to be a hobby or a career path for an individual.
And that path can be so treacherous and incredibly emotional, not to mention very costly, at least it was for me, to determine whether you can even make it as a pro trader. For me it took a lot of sitting on my hands watching the market and during that time I learned how to be patient and see trades, avoid FOMO, make good decisions in taking trades that were more inviting or higher probability trades, also to take less higher risk, essentially trading less while finding my zone. Well in the midst of learning to trade less and be more productive, I almost traded so little that it felt like a hobby. I felt like I was damned if I do and damned if I don’t!
The psychology aspect of that can be damning when indeed, you set out to be that pro trader, and halfway through the journey your head starts playing tricks on you. Making you think that all you can be is somebody that claims Trading as a hobby. I think that when you’re determining whether Trading is going to be a hobby or profession for you, the first thing that you need to do is look in the mirror and ask yourself with tears in your eyes, after your third or fourth stop out in a row and losing a few hundred bucks (or more) are you willing to endure these losses and continue down the path that you originally set out to be a pro trader? Or are you going to find that comfort zone in your closet, sitting in the dark in a laundry basket full of blankets and dwell over the losses, or mistakes you made (YES this was me!)
What I learned was that making the mistakes was part of the process. Stop outs and losing money is also part of that process. What I continue to learn is that taking the grandkids to a baseball game and dropping a couple hundred dollars at the concession stand alone, was nothing compared to losing 150 bucks on one single trade. What’s the difference? Well, the difference is one is for entertainment the other is your potential livelihood, and that is a huge difference. What I realized was that when it doesn’t bother me to lose $150 Trading then that’s the day that I realize I’m making a hobby out of this instead of a business. I don’t know any business folks that don’t get upset when they lose money in their business, but nobody gets upset when they take their grandkids to a baseball game and spend a couple hundred dollars.
That’s when I realized that if I was going to treat trading as a hobby, I would not be successful. As a successful businesswoman, I know that struggling and limping along, continuing to grow to the proverbial finish line. So, I started setting goals which is huge in this realm. It’s important to have a business plan, five-year plan, ten-year plan. Those plans have changed for me dramatically over the last two years of learning to trade. And that’s OK. If you’re not changing along with the increase knowledge that you gain, that’s complacency and that’s what can make this a hobby for some! I don’t want to be complacent. I don’t want to be fine with losses. I want those losses to be a reminder that losing trades is part of doing business. If this is my business and that I AM a pro trader. Having that mindset reminds me to put my game face on when I sit down at my charts and know that every trade I take is going to be a trade that I take for my future, and if I continue to make good decisions and keep my mind open to learning and growing in this industry, then success can be on the horizon for me.
The five-year plan that’s in place for me and my family will be totally achievable with hard work and determination. So, the question remains for some, is this a Hobby or a Profession? It’s up to each individual and where they’re at in their journey. I’m just grateful I’m on this journey with great mentors and people that keep me grounded and remind me that I can be the best version of myself that I can be.
In summation, I do believe you can have trading as a hobby, but what do Hobbies typically do? They cost you money. So, take your trading seriously, spend the time effort and energy to continually improve your decision making. Surround yourself with other traders like we have at FNL! Don’t expect immediate results. Patience and Discipline comes in many forms 😊
Lydean S. CA