Do you remember in school being given a project that required having a partner or being in a group? To me, it seemed like I was paired up with the wrong people. I either had to do most of the work to ensure I got a good grade or, I was the not so smart one in the group or therefore depended on the smart ones to do the work and hope for a good grade. As an adult, my perspective on partnering up has changed. In school, it was all about the grades. In adulthood, it’s all about networking and being with like minded people. The same is true for trading, you need to be among other traders for it can be a lonely world if your trading conversations are only with me, myself and I. You are also more likely to make bad decisions if you don’t at least share it with one or two people.
As a trader, you are either a buyer or a seller. For example, if you enter a buy order for XYZ stock you want to be able to sell XYZ at a higher price in the future and if you are a seller of XYZ you want to be able to buy back XYZ for less than what you sold it for. In every single trade, there is always a buyer and a seller and the goal for each trade one enters into is to be on the winning side be it buying or selling. So if the idea is to buy from the dummy who is selling as the stock is about to go up and on the flip side sell to the other dummy that thinks the stock will go up is all it takes, then the notion of trade alone and keep your thoughts to yourself makes perfect sense right? Well, not really. No one can predict what the market will do on any given day and when you start to tell yourself that you know what you don’t know, therein lies the danger of having a major draw down and increasing the chances of completely blowing up your trading account. Every trader has been there, we enter a trade believing we know the direction in which it will go. We grab our coffee, sit and stare at the chart waiting for it to move as if it’s the Kentucky Derby. Off to the races we go! It always begins with a move in the direction and rather than protect profits based on the rules set in place we let it run. Then the markets gods see our arrogance and decide it’s time to go in for the kill. Rather than raise the white flag and live to trade another day, again we ignore very rule in place that tells us it’s time to get out because now we are at war. By day’s end, we haven’t touched our cup of coffee and our account looks like it’s been at war literally because it is bleeding red from your losses and we haven’t even gotten out of our pajamas. We’ve all had this kind of day. Maybe a little less dramatic or perhaps even more dramatic.
To avoid this costly mistake is why it’s so highly recommended that you join in with others. It is in the knowledge, the systems in place, countless hours of back testing, technical and fundamental analysis, training videos, podcasts, blogs, and strategies shared among traders that make us all better aware of our strengths and weaknesses. It is where we build each other up and great ideas are created. This blog would not exist had it not been for my mentors and trading partner seeing a strength in me that I didn’t necessarily see in myself. There is no excuse, technology has made it so easy and convenient to have a group forum regardless of whether you a trader or part of to a moms group. From Whatsapp, Facebook groups, Google hangout and others, you can practically create a group in minutes. I’m fortunate to belong to such a community. We chat almost every day and on occasion, we video chat to share a strategy or share a successful trade. We hold each other accountable and share our frustrations about the market when it is not behaving as it should be among other things. You can be anywhere in the world and belong to a community of traders so get in one.