Today Good Kids Trading (GKT) is identifying 5 common themes that hold you back from being as successful as you want in the stock market. Let's identify and then solve the most common problems so you can make the stock market a bigger source of income and find the time freedom that you so deeply crave!
Here's a quick video of today's blog, I've also posted an entire thread in our discord to discuss these obstacles in more depth!
1. Not taking action -
The stock market is so confusing to beginners. It can feel overwhelming even if you’ve traded for a while. It's like staring at a mountain of information without a clear path.
The complicated terms, options chains that look like a bunch of random numbers, not even sure what a stock really is, or what is the next step.
For years I just traded shares of stock because I quite frankly didn’t know the difference between calls and puts. It was confusing you can sell or buy options. The learning curve in the market can feel steep. Too many people let this learning curve keep them from taking the next step.
Instead of trying to figure out a complicated strategy, focus on the very next step. If you don’t understand stocks (or options), spend 30 minutes learning a little bit more about the basics. Just keep taking the next step, do not become a victim to analysis paralysis. GKT is a good source of information without the hype.
2. Assuming there is a better way -
You can spend a lot of money looking for the easy button, I did it for many years. Trying all of the strategies that promise awesome returns, thinking some other person or group knew secrets I didn’t know.
There are millions of people trying to sell you the “best strategy” I have found and I firmly believe the best way is for you to build a strategy and a plan you believe in. If you follow someone else without understanding, you will end up losing money. Trading is mostly managing your emotions more so than managing your trades. You have way fewer emotions when you understand and believe in your plan.
Of course, you will have emotions, but it won’t be the same as following a plan you don’t understand or believe in.
3. Thinking someone else knows -
Self-doubt, imposter syndrome, or lack of confidence will get in your way if you aren’t careful. Some of my mentors have seemed so confident in their analysis or opinion they shook me out of trades, or I took outsized risks based on their guidance.
Realize that no one really knows. This is not as negative as it might sound initially. Yes, people can have informed opinions, but they can and will be wrong. You need to block out the noise and follow your plan UNLESS they have a point of view or concern you did not consider. Just like I mentioned above, it’s easy to believe there’s a better way or someone knows more than you do, but once you realize that no one really knows anything it’s easier for you to just stick to your thesis and trade your plan.
4. Sticking with the same strategy -
Let me give you a ‘secret’ (after I just told you there are no secrets) everything works in the market just not all the time. Just because you (or someone else) has a strategy that is making you huge profits right now, it doesn’t mean it will work next week, next month, next year.
The market moves in cycles, the market makers and institutions are really smart. It is not a merry-go-round.
Do not overleverage or ramp up just because you have a strategy that is working, you want to make note of what is working in which market conditions so you can start building strategies in advance. Keep learning, don’t get caught up in thinking you have found a holy grail because as the market shifts your strategy should also shift. Keep doing what works, but keep notes so you can stay ahead of the market’s cycles.
5. Trying to go too fast -
We’ve all heard the fable about the race between a tortoise and a hare, with the tortoise winning by moving slowly and steadily because the hare took a break.
I’ve found this to be true in the market. Everyone is a genius in a bull market, you will see people overleverage and make a ton of money, you will see these same people lose big at the first shift in the market and then they disappear because they blow up their account. Don’t be them. You don’t have to learn complex strategies to make money in the market. It’s easier to add complexity than it is to simplify your strategies. The power of compounding over time is powerful, so if you keep hitting base hits you will get a couple home runs and of course you will strike out as well. If you make your trading strategy too complicated and you keep swinging for the fences every time trading will be stressful, your emotions will ruin your success, and you won’t have fun.
Every day I get direct messages, text messages, sometimes even phone calls asking for input and help. These are five principles I stress to everyone because I know trading can be simple if you have the right perspective and build enough experience. I think most traders are still struggling with many if not all of these to different degrees, and that’s why I’m here to help you. It’s time we cut through the challenges and remember we are clicking buttons and making (or losing) money, how cool is that?
If you need help reach out to me, join our community. I’ll see you here next week, hopefully I’ll catch you in our Discord much sooner than that!
Happy Trading Good Kids!
Disclaimer: this is NOT financial advice. I’m basically just some dude on the internet who’s been trading a while, and I use the stock market as my primary source of income. None of this is financial advice it’s purely educational!
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