Trading Education: 2 Types of Traders - Which Is Better?

Hi, Brian McAvoy with Inside Out Trading. And today we're going to talk about the two different types of traders. It's a little different perspective than you're used to. We'll see which one usually does better, both short term and long term. Before we get started, make sure that you subscribe to this channel, and if you're on YouTube, make sure that you go ahead and click the notification bell. Okay, so let's just go ahead and jump right in. See, everybody gets into trading because, you know you want to make some money and you know you want to make those consistent profits. But generally there are two different types of traders and the two different types, in this context, talking about the different approaches in very general terms that a person takes to getting to that point. Now we're going to take a look at the pros and cons of each, and this is really important for you to look at your goals and objectives and what you really want to get out of trading and the approach that you're using and see if the two are congruent or if maybe you need to look at how you're doing it. Is that actually really going to get you to your goals, or would the other way be better? Now, anybody getting into anything doesn't want to take any longer than normal. Some people are in a real hurry. Some people have no patience at all, though. The first group of traders, usually, this is kind of where they're at. They have very little patience. They just want to get making money. They are basically looking at a signal service or a robot or. Or a trading room or the daily tips or trades being emailed to them so that they can go from now to trading real money within hours or days at the most, certainly not weeks or months. It's like, I want to start making money. I want to start making money now. Just tell me what to do. That's the first kind of trader, and there's not necessarily anything wrong with that. But like I said, there are certain pros and cons to this approach. Some of the pros of just looking at somebody else, like I said, with their system or their signal service, where they're telling you buy now, sell now. That kind of stuff. The advantage with going that route is, yes, it's very quick because these things are pretty much ready to use immediately, so to speak. And another advantage to doing this is rather than going on your own expertise as far as placing traits, identifying good traits and executing them, managing them and all that kind of stuff, is you're looking to somebody who's got more experience and presumably more expertise and some demonstrated success. So that's what you're looking for when you go to somebody else is you're saying, all right, you've already done it, tell me what to do and I'll do it and I'll start making money just like you do. So that's one of the other advantages. Also sometimes again, instead of going at it all alone, you might have good support there. If you're in a trading room, you know, you'll have the whoever's leading the room plus maybe other, you know, traders in the room. The group that you can talk to. This is like a Facebook group or you know, other forums anyway where, you know, you can interact with other traders and get support from the community. So those are like the three big advantages to, you know, looking to somebody else's expertise. Again, you know, it's pretty much ready to go. You don't have to learn a lot, you don't have to do anything on your own. It's like here, yeah, just, you know, tell me what to do. You have the support of the group and again, you know, you're taking advantage of the experience and expertise of somebody else. They've already had to go through all the painful lessons. Now, are you going to pay for this? Of course, you know, if you're getting it for free, that would be a little question. Well, usually, you know, these are going to be paid services, like I said, you know, trading room or somebody else's system or a signal service or you know, a newsletter, trades that are emailed or texted to you, that kind of stuff. So that's the first one. Now the downside, so those are all the pros with that approach. The cons with this approach are you're dependent on their expertise and their integrity and what they do. They screw up and you're following them, okay, you're the lemming that's going to stumble and go off in a wreck along with them. They may or may not be a person of integrity. They might be a scammer. There's plenty of those out here in the trading space. If they get a car wreck and they're not available to give you whatever it is that they provide or their site gets shut down or whatever, something happens to them and they're no longer able to give you that thing that you've been relying on, okay, now you're kind of sol you're standing there with empty handed. So you become reliant on their expertise and experience that you're paying for now, this is a route that a lot of traders go. You know, they'll jump into trading rooms, they'll buy trading systems. And I know a lot of traders been coming to me, average over 4 years experience and they've got a whole collection of trading systems that all sounded great when they bought them. A lot of people that come to me, They've invested over $10,000 in trading systems over their careers and they got a whole collection of junk systems sitting on a hard drive right now. So again, when you go that route, yes, you, you're looking to leverage somebody else's expertise and experience and integrity. Finding it and knowing that it's quality, the quality that you're looking for in it is reliable. Again, you're dependent on that. And if you are totally lacking the expertise yourself, you are kind of susceptible to getting screwed over or buying junk and not knowing it. So those are the downsides you're not able to do for yourself now. So that's the first group of traders. The second group of traders says, well, I don't want to rely on other people. I'm getting into this industry and this occupation because I want independence. I don't want to depend on anybody else. I want to learn what I need to learn. I want to grow and become a successful trader. And I understand that this is a skilled profession. This is not just a place where you can come and throw money at it and you make money. It doesn't work that way. This is a skilled profession and it does require certain skills. As a self employed, self directed trader, you're in business for yourself. It's several roles that you have and these roles have skill sets to go with them. If you're going to do them well and be profitable and do it in a knowing and confident manner, you have to know how to, you know, first of all, invest in the business, you know, making sure they properly capitalize it. You're going into it with a proper strategy that meets your objectives and your goals and you're setting it all up properly and you're laying out the plan properly and you know the skills to acquire. And I mean, because a lot of traders get into it and they don't even know what they don't know. And there's no shame in that. It's a, you know, fact of life. If you're jumping into an industry in an occupation for which you have no experience, that's the, you know, that's the nature of the beast. Okay, so the thing is, when you do have the skills, when you take the time to learn the skills and here's some of the skills we're talking about. You have the skills of being the owner and manager and planner of your business. You also have to learn about trading systems. What makes for a good strategy, what makes for a good system. They're different strategies and systems are not the same. So you have to know, to select and evaluate both. You have to know how to prove out what you're doing so that you can have confidence in it. You know what it works and what to expect from it. You have to know how to manage yourself. Again, these are things that require skills. You can't just wish them into place. You have to know how to do them and do them properly and know that you're doing them properly. As far as, you know, look, even if you say you want to combine the two, you say, well, you know, yeah, I want to know how to, you know, I want to be able to take advantage of somebody else's expertise and maybe you get a system from somebody else. The thing is to go along with that. You need the skill set to know what a good system looks like, how to evaluate it from a functional standpoint, from a performance standpoint, from a reliability standpoint. Is it structured to deliver the consistency that the purveyor is promising? Everybody that's selling a strategy out there says oh yeah, consistent profits strategy does not equal consistent profits. A strategy is a strategy the same. The system is how you're going to get the profits hundreds of times over the foreseeable future. Being able to identify it, evaluate it, prove it out so you have the confidence so you know when to use it, when not to use it, how to develop systems so that you have a broad capability because it's not the same in the markets every day. These are skills that you need to have. So some of them are part of the, you know, to do with the business of trading, some of it have to do with, you know, the things of the business. And that's selecting systems, actually placing the trades, evaluating your system, evaluating your performance, evaluating your trading and responding properly. So these are the two general approaches that there are to, you know, when it comes to trading. Now why do I bring all this up? Personally, I'm a person who believes in and what I try to teach people is to become self sufficient. This is a skilled occupation. And if all you do is look to buy systems from somebody else or be the trained chimp, just buy on green and sell on red, push buttons. But I don't know what I'M doing and I don't know if it's any good or not. If you're going into it unskilled, that's where you're most susceptible to losses and getting screwed over. Well, and part of it is that's why it's so stressful for a lot of people, because you know that you're dependent on somebody else. And when things aren't matching up with your expectations, that's why it becomes so stressful and emotional. Start playing with your system. Discipline gets real difficult. So you've got these two different approaches. And like I said, I try to teach. I want to teach you how to be self sufficient. Whether you look to go get a system from somebody else that somebody else has developed, fine. But before you go and just throw it out in the markets and risk money, you have to know how to evaluate it approach, prove it out so that you can have the confidence in it, so that you can have the discipline to stick to it. Because you have the confidence and the faith in it. You have that proof for yourself. You know how to adapt when the markets change. You know how to get your whole business organized. I've had a whole lot of people come to me. One of the biggest struggles that they're having is they think they need to be a day trader because that's where the money is. But they don't really enjoy sitting in front of the charts all day long. They'd really rather be doing something else. So even just knowing how to organize your trading business and the whole operation, the whole endeavor, approaching it in a way that really is congruent with who you are and what you want, that by itself is a big deal. If what you really want and what you truly enjoy aren't in line with the way you're doing it. It's like having a job you hate. It just isn't going to work and ultimately it will fail. So anyway, like I said, the reason I bring all this up. So it's important for you to understand just the general, the two general approaches. Do I want to be skilled? Do I want to be self sufficient? How self sufficient do I want to be? How skilled do I want to be? Or do I just want to take the easy, give me an easy button route? And here, just give me a system. I don't really want to learn all that stuff. Just give me a system, tell me what to push, that's fine, but understand the risks to go with that in the long run. That's not really the quick way to profit unless you get lucky. That's been my experience in helping traders for over 14 years. Going the easy button route, that's really one where you set yourself up for a lot of grief. When you learn the skills, things are a whole lot less stressful. I mean, one of the biggest things that people used to come to me for is help with their psychology. You know, it's Brian, I can't stop hesitating. I'm stressed out all the time. Time. I can't stay disciplined because my emotions are messing with me all the time. I've got all these fears and this, that, and the other thing what I found is you don't need to fix you personally, you have what you need to make it. As a trader, you've already demonstrated that. That's why you're in a position to trade. You don't have personal issues, you have lack of training issues. And if we take care of the training issues because it's stressful and you're having a rough time and it's emotional because you're trying to do a job you're not fully prepared for. If you get fully prepared for it, where you really do know what you're doing and you know that you're good and you know you're solid and you know why you're solid. Not just because you've got a cool system, but you understand, you know, like I said, you know what you're doing. You don't have the psychological issues. And this is true of any endeavor that you want to pursue. If you're going into it untrained, unprepared, it's going to be stressful, it's going to be rough. If you go into a process properly prepared or properly trained, where you know what you're doing, you just go do your thing. So anyway, I wanted to bring this up again so that you understand there's two different general approaches. There's pros and cons to both. In the short term, maybe you'll get lucky. You'll run across a system that's just magic and you start throwing money into it. And yeah, next week you're kicking ass, taking names. You're making ten grand a week. Doesn't happen that often. Most of the time, that approach, the easy button approach, you wind up with a lot of systems and you're still looking for a good system. If you go the skilled route, you get there a lot quicker. Yeah, it might take you a few weeks to learn some of the skills that you need, maybe even a couple months, but, man, you get there so much quicker and the stress level is so much lower. So anyway, it's your choice. Just wanted to let you know if this has been helpful. Give me a thumbs up down below. Share it with your friends. Hope this helps. Talk to you soon. Bye Bye.