Perspectives Weekend Edition - Feb 19
Commentary
The volatility and liquidity that we have seen in the stock markets over
the past number of years has brought a lot of interest to stock trading.
More and more people are attracted to the idea of making a living buying
and selling stocks. And why not? It is a pretty attractive way to make a
living; sitting in your underwear, eating breakfast, making thousands of
dollars a day trading stocks.
Let me tell you about another great way to make a living.
Playing hockey in the NHL. Earning millions of dollars pushing a black
piece of hard rubber around, enjoying the attention that comes to sports
celebrities, travelling the world blah blah blah.
The reality is that making thousands of dollars trading is, for the average
person who doesn't know the difference between a bid and a ask, about as
realistic as me jumping on the ice while I am at the hockey game tonight
and scoring on one of the best hockey goaltenders in the world.
Not very likely.
I don't mean to discourage anyone who wants to try trading for a living. It
presents a wonderful opportunity, particularly in these crazy markets where
stocks routinely move 10 - 15% in a day. The technology available today
puts you and I on the same playing field as the pros on Wall Street. So now
we, the average Homer Simpsons of the world, can trade for a living.
That does not mean we should. The ability to successfully trade stocks is a
skill no different than playing hockey or designing a house. It takes time
to learn, and time to become good at it.
If I jump onto the ice tonight at the hockey game, I will probably get hurt
(actually, I will probably get arrested). Many people jump into trading and
also get hurt.
Therefore, before you try to make your millions trading stocks, take time
to learn first. Read books, do mock trading without cash, and then start
very slow, minimizing risk. Doing so will take longer, but it will also
save you a lot of tuition to the College of Trading.
Enough Said. |
