It’s Never Too Late to Learn to Trade

One of the themes I came across meeting people all around the world is that they think that it can be too late for them to learn to trade. Coming from that point of view, they ask for shortcuts to get trading success quickly. Thus their enormous interest in trading courses promising instant success and guarantee income from secret trading systems showing consistent performance, say certain amount of money every month. Is it really true that it can be too late to learn to trade properly?

It is Never Too Late to Learn to Trade

I have met people from all walks of life from all age groups who managed to get trading success. I know several traders who started to trade by the age of 60 years old and they managed to do pretty well in trading after several years of committed learning. In fact, it is usually a bad idea for young adults to go straight for a career in trading after graduating from school because they lack the normal work experience needed to develop good working habits like discipline and perseverance.

Given the modern age life span, it is not a surprise that we will live to 80 or 90 years old. Hence learning to trade properly and gaining success in trading by committing several years to acquire the knowledge and develop the necessary skills is a great investment. Yes, by 70 years old, it may not worth our time to take on this challenge. But if you are younger than that, the benefit of having the proper trading skill set in place will pay off handsomely for many years.

There is really no excuse for people at their 30s, 40s and 50s to avoid learning to trade. Yet, people keep saying it’s too late for them and they need a quick fix. I think the issue here is a combination of cultural misconception and psychological weaknesses.

Modern Day Career Path Has a Completely Different Time Schedule

Our world view of career path is shaped by the beliefs coming from our parents and grandparents. Those people at the age of 50s and 60s were taught to believe that they have to be established by the time they are at their 30s and by 40s they should be on track to a great career path or they will be stuck in life. And then retirement is near as their age approaches 60s. This mindset is completely messed up.

First, by taking good care of yourself, given the modern understanding of the human body, there is really no reason why we cannot live healthily by 80 years old with our body staying fit like we are 40s. The whole concept of retiring by the time we are at 60s was just part of the historical past. Planning your life around that concept nowadays will seriously side track your ability to live a meaningful life as all your attention is wasted on a finishing line that was drawn arbitrarily.

Second, the society we live in now do not bound people to one single career anymore. In different stage in life, many people switch career or even industry at their 30s and 40s with great success. Trading does not have to be a replacement path of the main career you are pursuing either. It can be complimentary as managing one’s wealth is no longer a task that we can put our trust in the financial industry.

Conquer Our Fear of Failure

When we have a reasonably established career path, it is difficult to take on trading knowing that it is a very difficult to master with very low chance of success. After all, just casual research on the internet will tell you that 90% of retail traders will fail. This psychological problem of not willing to deal with failures affects majority of people who are looking to improve their lives in all areas from health to financial success, not just with trading.

The fact is, many people were taught to think of failing to do something is the equivalent of themselves being failures. This thinking is plain wrong. Yet, we are often misled to think this way when we were young as we do not have proper guidance to separate our ego and our abilities. When we fail at doing or learning something, it is just that, nothing more.

For example, I may not be talented at drawing and that even though I tried very hard to learn to draw better, I know I will not be a great artist. The learning process to draw better is full of obstacles with failures all the way. This does not define me being a failure. It is just one area that I am not good at. Without trying, however, I will never be knowledgeable about drawing nor able to appreciate paintings at a higher level. I learn a lot about myself during the process of learning to draw. My drawings produced along the way are not good quality by any standard. But that does not define me being a bad person, or a failure, a very ambiguous term people often use when they cannot find something in their lives that they can be proud of.

Success in any field is the result of accumulating many failures. The most successful people in any field are likely the ones who encountered more failures than their peers. Only by being not fearful of failure and mentally prepared to handle failure as part of the process, will you be able to pick yourself up quickly after every fall. This better mentality in dealing with failures also help us master any craft faster with less emotional torment.

Accepting Our Ignorance

One interesting behaviour I often observed is the underestimation of the difficulties in learning something new. In trading, I have seen many people with success in their own fields often look at trading as something simple. Their perception mislead them into learning this supposedly completely new skill with the wrong approach. In short, they try to adapt the information on trading they are given, no matter how detail or complicated the materials are, into concepts they already have in mind, based on their past experiences in other fields.

This approach to learning only works if you are learning something that has a lot of similarities to something you have deep knowledge of. For example, if you already know a European language like Spanish, then learning German is not as hard. For those people whose background is in Asian language only, it will be much more difficult to learn German quickly even though both are languages for general communication.

But how do we know if we already have deep knowledge in something similar to what we are going to learn?

We don’t.

People in general assume they know because their brains tricked them into thinking that they have some ideas what they are learning. For many simple skills, you can be slightly better than average and you would already be able to utilize that proficiently to solve 90% of the problems requiring the particular skill set. Majority of the skills we acquire in life belongs to this category.

However, trading is one of those fields that in order to be successful you have to be part of the top 5%. This means taking it seriously and accepting our ignorance about trading is very important. This correct mindset will steer us in the right direction, making us willing to learn more carefully like we once were when learning to write while we are young. Being able to take extra care in learning everything in details helps us to build the proper foundation. In turn, it ensures us a better chance of success in trading.

Financial Freedom is a Reasonable Goal

As I explained in my more technical writing about trading, it is not striking it big quickly that matters in trading. It is all about consistencies and having a proper game plan. Once you become more consistent, your performance is just a function of the compound growth rate as you get to increase your trading size over time.

One cannot rush the learning process in trading. The mental development of a person in trading is as important as acquiring more knowledge about trading. There is no shortcut. Just better ways to focus your learning while not wasting time on misleading information.

From my experience working with many traders, once they “clicked”, it takes only 2 to 3 years to get them to produce decent profits putting them at par to top 10% income in their countries, provided that they are trading fulltime. For those who choose to keep trading as their side business of managing their savings, it takes about 3 to 5 years for them to produce enough profits to exceed their main income. Of course, everyone will follow their own pace so my observation can only act as a reference. So we are looking at doubling one’s income being a reasonable short term goal and gaining financial freedom as an achievable long term goal.

In summary, acquiring or mastering trading skill is not as remote as many people think. It often takes too long because people tend to approach it wrong as I pointed out the psychological challenges earlier in this article. If you look at trading serious enough and are willing to commit yourself to the learning process, I am sure it will be one of the best things you have ever invested your time and energy on.