Unlike knowledge, skillset is a phenomenon. For example swimming skillset is a phenomenon. Swimming knowledge is different from swimming skillset. A person with only swimming knowledge, without swimming skillset, is not supposed to jump into water with the expectation of floating. Similarly a person with only trading knowledge, without trading skillset, is not supposed to jump into trading with the expectation of making profits. The level of skillset that a person can develop is proportionate to his level of passion and perspiration. We can achieve any skillset provided we have genuine passion & dedication to learn it. Interest in earning money through trading is different from passion for trading. One has to analyse his own real intention in trading, whether he is involved in trading just for making shortcut money or for the love of trading. Because genuine interest/passion in trading alone can give us success in trading. There are two kinds of genuine traders. 1. Those who have natural trading skillset 2. Those who developed trading skillset out of sheer passion for trading Now, how to develop genuine trading skillset? First, we have to keep asking ourselves if we have genuine interest/passion for trading. Next we have to put our heart and soul in developing trading skillset. How can we know that we have genuine interest/passion for trading? When we realise that our failures in trading does not have the power to kill our enthusiasm to learn trading, then its a symptom of genuine passion. When do we know that we acquired trading skillset? The one and only proof is when we consistently started earning considerable amount of money in trading. (minimum ROI/month of 10% for a positional trader and 20% for intraday trader) Do you know, You treat stock trading as... 1. BUSINESS ...if you have a precise return on investment (ROI) calculation. 2. GAMBLING ... if you do not have proper Risk Reward ratio. 3. LOTTERY ...if you believe that there is a secret/luck to win Jack Pot in trading. Any trading is an entry level business with proper ROI ingredients: 1. Sufficient trading OPPORTUNITIES (Not one BIG SHOT opportunity) 2. Success rate (PROBABILITY of success) 3. Risk reward ratio (GOAL setting) ROI = Success Rate x Rewarded opportunities - Failure rate x Risked opportunities
Trading Psychology (Ontology) http://www.elitetrader.com/et/index.php?threads/trading-psychology-is-ontology.298893/
More we acquire knowledge, more we get into "analysis paralysis". More we develop skills, more we know what to do with the knowledge !
Have you ever traded? I think you have wrong concepts period. You want to tell the millions who have attempted to day trade through the years and they them they just needed passion and dedication to surpassing the mountain of mental anguish to becoming profitable? I know guys who are so incredible good at knowledge and gave decades of passion and dedication to becoming a trader and failed, they would knock your block off if you told them they didn't have passion and dedication. What is shortcut money? And if you do it for the love of trading you are just pure idiot who has no life, no friends, you are in some cave and bats are your only friends. Interest and passion is not nearly enough to become good at trading, many would give their right arm to figure out why they are not doing well, and they have spent 10,000 hours. Failures in trading might not kill enthusiasm but it sure as anything kill your account. Let's se how weathered your enthusiasm you have then. Where do you get these percentages? 10% a month for day trading, you are losing money at 10% a month, commissions cost 10% if you are retail. And long term does not work on a monthly basis at all, 2 of 3 years you are threading water and 3rd are monsterous years, if you last that long. ROI = Success total/Risked opportunities - Failure Total/Risked opportunities I think you are perhaps a Professor at a college and reading out of a textbook.
First of all thanks for your honest words. "I know guys who are so incredible good at knowledge and gave decades of passion and dedication to becoming a trader and failed, they would knock your block off if you told them they didn't have passion and dedication." People who trade have different kinds of passions: 1. Passion for developing trading skill 2. Passion for expanding knowledge 3. Passion for making money someway or other 4. Passion to show off as a professional to friends and society 5. So on... And its not easy to tell what kind of passion a trader has unless a genuine attempt is made by the trader himself to find it. I need not mention that passion to develop trading skill alone can give success. "And if you do it for the love of trading you are just pure idiot who has no life, no friends, you are in some cave and bats are your only friends." Loving my dad does not mean that i dont love my mom. Loving my siblings does not mean that i dont love my friends. Loving my job(trading) does not mean that i dont love people. "Interest and passion is not nearly enough to become good at trading, many would give their right arm to figure out why they are not doing well, and they have spent 10,000 hours." True. 1% inspiration and 99% perspiration. The real question "What kind of interest?". Whether the interest in developing trading skill or others? If the direction is incorrect so will the destination be. Though passion is just 1% in the journey of trading...it is very very crucial and directional. "Failures in trading might not kill enthusiasm but it sure as anything kill your account. Let's se how weathered your enthusiasm you have then." One of the myth about trading or any business is "Business needs your money". Business certainly needs money...but not necessarily your money. While developing genuine trading skill if it happened that a trader burnt his money...not a big issue. He still has the trading skill intact. He can borrow money and cherish I burnt my money...borrowed...and now free from my debts and earning to my satisfaction "Where do you get these percentages? 10% a month for day trading, you are losing money at 10% a month, commissions cost 10% if you are retail. And long term does not work on a monthly basis at all, 2 of 3 years you are threading water and 3rd are monsterous years, if you last that long." I mean % of net profit (after deducting all costs incurred) "ROI = Success total/Risked opportunities - Failure Total/Risked opportunities I think you are perhaps a Professor at a college and reading out of a textbook." One need not be a professor to tell that !
The phenomenon of skill Though the phenomenon of skill cannot be explained in words just like we cannot explain someone how to swim in real sense...I try to put in simple words here... The phenomenon of skill can be seen as center of knowledge. For example the swimming skill can be seen as "center of swimming knowledge" which is "balance". Then what would be the "center of trading knowledge"? Since trading is business..trading knowledge comprises of: 1. Generic Business knowledge 2. Trading knowledge So we have two centers. One for generic and one for trading. Center of generic business knowledge is ROI. 1. Sufficient trading OPPORTUNITIES (Not one BIG SHOT opportunity) 2. Success rate (PROBABILITY of success) 3. Risk reward ratio (GOAL setting) ROI = Success Rate x Rewarded opportunities - Failure rate x Risked opportunities Center of trading knowledge is the chemistry between "speculators vs market". All successful traders, consciously or subconsciously, explicitly or implicitly, are aware of this chemistry and trade in their own unique styles based on this awareness.