Adrian Reid answers whether trading is right for an individual. He advises that trading suits people who are genuinely fascinated by the markets and willing to spend spare time learning; that passion must be converted into a repeatable, profitable trading process. He recommends starting in stocks (describing stocks as the easiest and most regulated), warns that options are hard (time decay, expiry, liquidity issues) and forex is hard (high correlation, leverage, competition, scams), and advises learning systematic longer-term approaches on stocks first, then branching to futures/forex/options once profitable.
Chapters
How do I know if trading stocks is right for me? How do I know if I should even be doing this?
Well, if you're asking that, it's interesting, I think the way you know is because you're fascinated by the markets and it's not so much. I don't want you to think about always trading stocks right for me, or is trading options right for me? Or is trading future futures right for me? I just want you to think is trading right for me? If you're fascinated by the markets, if you want a driven to learn more, if you spend your spare time reading about stocks and trading and the markets and systems and indicators, then trading is right for you. But what you've got to then do is take that passion and convert it to a process that will actually get you to your goals. I have a lot of people that come to me saying, oh, I'm a forex trader and does your system work on Forex? Okay, fair question. How long have you been trading? Two years. Do you make money? Nope, still losing money. Okay, so you're trading with Forex but you're losing money. There's no reason to be married to forex as a trader. You just want to be a trader. What you need to do is learn an approach on a set of instruments that is profitable so you can start to achieve your goals. So trading is probably right for you if you're on this webinar or if you're fascinated by the markets. Should I trade stocks, Forex, futures, options? That's a different question and there's not really a right answer for that. But let me tell you this. Stock trading is probably the easiest. Options is really hard because you've got the added complexity of time decay and expiry and very widespreads, much less liquidity than you do in stocks. Forex is pretty hard because there's a lot of correlation between pairs. You're going to use a lot of leverage to benefit from the relatively small moves. Huge amount of competition and lots of garbage in the market, frankly. You know, robots that just don't work and expert advisors that are garbage and all of this, and brokers that are scammy and basically rip you off. The stock market is very well regulated, very established, it's not the wild west. And so it's probably the easiest, most forgiving place to start. So if you're, if you're trading something and you're not profitable, what I want to encourage you to do is take the easy path. You know, learn about systems, learn about longer term systems. And probably start in stocks and then go back out, branch out to futures, forex options later. Once you're profitable and consistent, you've got to learn the principles of, of profitable systematic trading and then those principles can be applied to other markets.
