Here’s what I realised watching my students trade

Insights from Watching My Students Trade

Hello everyone,

As a trader who also teaches others, I thought I had a solid grasp on how to help traders become profitable. However, watching my students manage their own trades gave me deeper insights into what’s working and what isn’t. Here’s what I discovered:

Understanding the Market: After considerable effort, study, and practice, most students easily grasp market concepts and begin trading based on my guidance. Many even start to see profits within the first few days.

The Reality of Trading: However, there’s a crucial reality to face: when they encounter a losing trade—something that happens to every trader regardless of strategy—many struggle to cope.

So, what do they tend to do?

1. They over-leverage in an attempt to recover losses.
2. They become greedy, chasing more trades because they believe in the efficacy of their strategy.
3. They take low-quality trades without sufficient analysis.
4. They develop a fear of entering potentially profitable trades, often exiting too soon.
5. This leads them back to taking poor trades.
6. And the cycle repeats itself.

What I didn’t realize is that regardless of how much I teach them about market dynamics, many students can’t move beyond the impact of losses. It’s a significant hurdle.

There are those who approach trading with a gambling mindset—jumping in without thought, which rarely yields positive results. Others wonder why the market seems to treat them poorly despite their good intentions and hard work.

Consider this: if the market were to “care” about individual traders, would it still function as a free market?

From my experience—both as a teacher and a trader—I can confidently state that accepting and managing losses is pivotal. If you can’t embrace or come to terms with losing, no amount of analytical skill will prevent potential financial loss.

This is just scratching the surface; there’s also the issue of extreme greed in risk management, alongside the fear surrounding stop-losses. Traders often adopt strategies to convince themselves that they can control outcomes, even when the market follows its own rules.

The psychological aspects of becoming a successful trader are immense and largely overlooked. This is why even highly intelligent individuals struggle and lose money in trading; it’s unfair to label it merely as a gambler’s game. Instead, it encourages seeing money purely as a resource. Achieving this mindset is rare, and trading ultimately teaches this lesson, though many choose to ignore it, repeatedly battling their own mental obstacles in pursuit of profit.