WWIII: Traders vs Investors

It’s official, you can add another bullet to your resume now.

“Survived 2020.”

Currently as you are reading this I’m likely on the mountain wiping out and eating snow. Thanks to technology though I was able to type this out early and schedule it to send out.

On Twitter my DM’s are always a mix of those looking to invest and those looking to trade. While to someone who has been in the market for awhile the difference is clear, to beginners the difference can be distorted.

Speaking from the experience of both this email includes my three main reasons that 95% of trader fails.

“If most traders learned to sit on their hands 50% of the time, they would make a lot more money.”

- Bill Lipschutz

This is major conversation that gets brought up a lot in the investing world.

Being one who use to day trade options, not my brightest decision, I can say that while it is fun and addicting it’s not a good way to build long term wealth in the markets.

And let’s be honest, the average Joe with two kids, who works from 9-5 everyday, and needs to mow the yard when he get’s home does not have enough time to dedicate to trading.

Now, swing trading is different. For those who don’t know this is when you take a position and hold it for anywhere from a week to a few months. You guys relax, I enjoy a good swing trade myself every now and then.

From my experience here is the three biggest reason people fail at trading and should begin with investing instead.

1. The psychology.It’s truly a mental game. Every time you buy someone thinks it’s time to sell and vise versa. For anyone looking for a good book over this I recommend “The Disciplined Trader.”

2. High Expectations.Most people go into trading expecting to make massive returns quickly. This isn’t their fault as people pump trading as a get rich quick scheme all the time. The disappointment from realizing this isn’t the case will be a reason many quit.

3. Knowledge.You can’t predict where the market is going short term and anyone who says they can is not telling you the truth. Especially on the daily time frame. I had days where I would be up and then a tweet from Trump would come out and tank my return 10%,15%,20% in a matter of seconds. You’ll never know it all.

We are our own sponsor so shout us out on Twitter so I can hit ya with that retweet.

Time for the fun part…

We might not be here next week…

But we’ll worry about that later.

Thanks for reading, if you have any questions, comments, suggestions, etc. about the email send me a DM on twitter. See you next week!