Peter Brandt made one of the most memorable quotes in the trading world in 1970. He said that if someone wanted to know themselves, issues of pride, character flaws, and areas of greed, and much more, they only needed to become a trader.
This saying still holds true to this day. There is something about having your ego and your money tested that gets to the core of you as a person. The next time you want to make a decision based on a bruised ego, you hold yourself back and think about the issue. You remember what happened the last time and you change course.
It teaches You Conviction Is Always Right
As a good trader, you come to learn that in time when your conviction is highest is when you should most carefully examine your actions. In life, most people make decisions based on their convictions, even when they turn out to be wrong. You learn about risk management and how to be cautious. Trading teaches you that convictions are important but risk management is necessary.
It is a Chance for Introspection
Everyone has insecurities and character flaws. Besides that, everyone has areas of pride and greed. However, most people never get to resolve the issues. Nothing can be more in this life than have a chance at introspection. It gives you a chance to identify and deal with personal issues that you might have and to address them. As such, you are able to grow past them and become a better person. Most people can avoid dealing with these issues but not a trader.
Some Lesson You Learn As a Trader
There are specific lessons you will learn as a trader but there are also general ones. Here are some of the most important ones you will learn:
• Cutting Your Losses
This is an important lesson when you become a trader. It is also an important lesson in life. Whether you are dating someone or reading a book, it is always important to know you have had enough and you have to move on.
• Have Targets for when to Gather Profits
As a trader, you must know when you have reached your target and you can now take profits. This applies in real life too. Whether you are in a relationship or any activity, there must be an end goal in sight. You know how things have to turn out. If they do not, it is important to know when to take profits and go your way. However, you must note that it does not apply to kids, those are there for life.
• Avoid Averaging a Loser
In the trading world, it is advisable to take a break after a losing streak. You must never try to double down and change your fortunes. For instance, if you are taking a law degree and it gets to a point where you realize you have no love for it, always back out. Doubling down will not make you love it anymore.
These are just some of the lessons you learn as a trader. There are many more. In short, trading is a personal journey that will transform you for the better.