License to Trade, Do You Have What it Takes

LearnToDrive

Trading is just another career, whether you’re trading an hour a day or 20 hours a day is irrelevant. The great (or sometimes unfortunate) thing is that anyone can be a trader. Just like driving, anyone can drive (even without a license). The question is, is it worth taking the risk?

With that, let me introduce you to the idea of Licence to Trade.

What is a License to Trade (LTT)?

LTT is having the ability to trade the financial market irrespective of the trading system and he /she will do so in a low risk and structured manner. Having the LTT does not constitute to trading a profitable system. Instead, it is having the right skills to trade a system successfully.

The concept is, to a certain extent, like Driving. When you have a driving license, you are generally confident that you will reach your destination safely. You’re also right to think so because you can (1) operate the car, (2) trust the car and (3) obey traffic regulations.

Do you Qualify?

Let’s compare Trading and Driving and have a look at what it takes to qualify.
  • Rules: There are traffic by-laws every where and all drivers need to abide by it. In trading, all systems have its own rules and requirements, traders need to tick ALL the boxes before entering the market.
  • System Know-How: You don’t need to be a car mechanic to be able to drive a car. However, you need some basic knowledge to operate it so that it will move forward, backward, turn and stop as you wish. Similarly, in a trading system, you don’t need to know how the indicators were calculated, but knowing when and how to use them is crucial.
  • Navigation: Driving should be safe under all road conditions (e.g. highway, road and lines). Hence, navigation and awareness are vital. Similarly, Trading should be executed with low risk under all market conditions. Again, the same skills are required before he/she takes a trade.
  • Precautions: Getting a driving license does not guarantee that you’ll never get in involved in road accidents. It does, however, help you take necessary precautions reduce the probability of one (finger’s cross none will happen). Like trading, there’s no guarantee that you’ll win a trade, but the likelihood of losing is reduced if the probabilities stack up.
  • Attitude and Mindset: This is probably the most important requirement.

Before drivers take their driving license, they will diligently do their homework, they take lessons, prepare and practice before taking the driving test. Many who have taken it lightly in the past usually end up failing it. Guess what? Traders who take lessons, prepare and practice generally become better too. And those who don’t usually fail.

 So, please ask yourself, do you have what it takes?

 

The Car a.k.a. The System
When you get your driving license, you can drive any car you want. In the same way, if you have the License to Trade, you can trade ANY system you want. And just to be clear, having the License to Trade doesn’t mean you’ll enjoy every system and fit into it immediately. Just like driving, there isn’t a one-size-fits-all car, some cars are too small for certain drivers and other drivers prefer diesel (engines) to petrol.

However, my point is that you should not chase after systems until you’re certain that you can handle AT LEAST ONE. I fully understand that all trading systems are different and one will be more profitable than another but, hey, if you can’t even steer the wheels, what’s the point of spending a fortune on Supercars.

Conclusion

Driving and trading should be approached with the same attitude, mindset and belief. Both Driving and Trading are dangerous but both work, so, if you appreciate the risk and reward of driving, then the same thought process should be applied in trading.

If you struggle to find a system, try writing a simple trading plan (see related article) and start with that. Your Trading skills and confidence will develop as you take lessons, prepare and practice. In short, you’re not going to master it immediately. However, if you’re patient enough, you’ll definitely enjoy the ride.

 

Anyway, that’s all for now. Thank you and happy trading!!

 

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