So You Want to be a Trader?
The idea of sitting at home, pressing a few buttons, and watching money multiply sounds irresistible. But before you romanticize what trading is like, let’s talk about the reality: trading is brutally difficult, and most people fail. Trading has a failure rate high enough to humble just about everyone who tries.
Why Most Traders Lose Money
Studies vary, but somewhere between 80% to 95% of traders lose money over time. Not because they’re dumb. “Being smart” isn’t enough; you need a repeatable edge and emotional discipline.
Realities:
The market doesn’t pay for effort: It pays for edge and discipline. Trading is one of the few careers where you can work harder and still lose money. You can read 50 books and still lose money.
Your competition is elite:
Funds with PhDs, data scientists and intelligent indicators are on the other side of your trades.Randomness is violent:
You can do everything “right” and still lose for weeks despite having an edge. Even great strategies lose money sometimes. If you can’t handle drawdowns without changing your system, you’ll never last long enough to let your edge play out.No real advantage:
“It looked strong” is not a strategy. Most traders never define what actually gives them an advantage. If your strategy isn’t backed by hard data and repeatable logic, you’re gambling, not trading.Market Psychology:
Markets expose every emotional weakness you have: fear, greed, overconfidence, revenge, boredom. The market doesn’t care how emotionally strong you think you are—it will find your breaking point and push you past it.
What Real Trading Looks Like
At its core, trading is repeated bets with uncertain outcomes. The expectancy of a strategy is:
E = (Win% × Avg Win) − (Loss% × Avg Loss)
Express wins and losses in R (your risk per trade). Examples:
Positive expectancy: Win% = 40%, Avg Win = 2R, Loss% = 60%, Avg Loss = 1R
E = (0.40 × 2) − (0.60 × 1) = 0.80 − 0.60 = +0.20R/trade.Negative expectancy disguised by “good” win rate: Win% = 55%, Avg Win = 1R, Loss% = 45%, Avg Loss = 1.3R
E = (0.55 × 1) − (0.45 × 1.3) = 0.55 − 0.585 = −0.035R/trade.
If you’re still in…
Treat trading like a serious business:
Write a one‑page trading plan.
Define your kill‑switches in advance.
Obsess over downside first; upside takes care of itself when you survive.
Most will give up. Some will learn to stop. A small minority will build something that survives.