1) It's a level playing field. The market does not care about your race, gender, age, or nationality. It does not care about your background, degree, resume, whom you know, or what you think. It does not care where you are. It does not care, period.
2) The market is an endless opportunity. It's always been there and will always be there - as long as there is fear and greed. Nobody can take it away from you.
3) Your life does not depend on anybody. You don't have to ask anybody for permission to trade. Nobody can hire or fire you. You set your own hours and take vacations as you please.
4) There are few barriers to entry - well, two, actually: trading capital and skill level. Other than that, all you need is a fast computer with a fast Internet connection. No formal education required - the best traders are self taught.
But you must treat trading as a business.
Trading system
Amateurs focus on stock picks. They believe that all they need is find a few tenbaggers here and there. Successful traders focus on the system. They know that the key is the ability to produce profits consistently over time. A good trading system should have three key components:
1) stock selection;
2) portfolio management;
3) emotion control.
Stock selection
The market is too big for anybody to be equally good at everything. Find a niche that best fits your style and get good at it. It may be buying breakouts, trend following, playing short squeezes or FDA approvals...
No system works 100% of the time. In fact, the market is an equal opportunity mechanism. It favors different styles at different times. All you need to do is have yours, wait patiently for your turn and act decisively when it comes.
Portfolio management
Trading capital is the lifeblood of your business. Stocks are your inventory. You turn over the inventory for a profit. Lose your trading capital - lose your business. The overriding goal of sound portfolio management is capital preservation. You should expect and will sustain losses as part of doing business. But no one position should hurt you to the point that it puts you out of commission. Your system should incorporate position size, number of positions, loss limitations, and risk/reward ratio for all your trades.
Emotion control
It's not the stock that makes you money, it's what you do with it. Your worst enemies are inside you: fear, greed, doubt, and hope. Gains will make you overconfident and careless while losses can paralyze or drive you to desperation. Find a way to control these emotions. Your goal is to maintain poise and detachment under any circumstances.
Trading account
Get approved for day trading even if you are not planning to day trade so that you can get in and out of positions without restriction as needed. You may trade a stock several times during the day before finally deciding to keep it. For example, you buy a strong breakout early in the day but the stock begins to sell off into the close. It may be the market, or a big seller. You don't know, and the stock does not feel right. You decide to sell and watch it for a while. You can always buy back later if selling subsides and the stock resumes the advance but you want to protect yourself in case selling kills the breakout. If you don't have a day trading approval you may not be able to sell the same day.
Which broker is the best?
Some people want trading choices - stocks, options, futures; others - advanced charting capabilities; yet others - lowest commissions. To me the most important feature is how robust the trading platform is. You don't want it to go down when you need it the most - when the market is selling off on huge volume. It does not make much difference whether you are paying $4.95 or $9.95 per trade if an execution delay is causing you to lose thousands.
Data sources
You can get just about everything else (charts, news, etc.) elsewhere, often for free. Have a list of redundant bookmarks for each category so you can always get the data you need elsewhere if your favorite provider is down as well. This way you only depend on your broker for one thing - execution.
Some traders go as far as having 2 ISP providers, 2 brokerage accounts, and a UPS (uninterruptable power supply) for complete redundancy. While I am not recommending that, I can see how it may be necessary when you trade large concentrated positions.
Stay connected
Trading is a lonely endeavor. It's you against the world. There is only so much you can learn from books. Join a group of likeminded individuals to learn from others, stay current on what's working right now, swap stock picks, get links to the best sources, or just talk shop to maintain sanity.
