2020 was a horrible year for most people for obvious reasons. Now that the world is starting to open up again, there’s a lot to take from the collective experience, retroactively speaking.
Aside from the pandemic, a lot of other major changes occurred in the world and due to the human evolutionary cycle of 20 years, a major change was predictable, *sights The gates’ foundation simulation.
As an analyst, I’ve learned to draw unconventional correlations between major world events and their ripple effects on the financial markets. This outlook has been a major factor in my correct prediction of trends for the last 10 years.
This is not an attempt to toot horns but rather an attempt to get you to understand why trading is an important skill to adopt for any working-class individual. Here’s a couple of reasons, or 4, why you should;
Income.
Be it supplemental or full-time, this is a skill that can create a stable income, that’s why people do it! Forget being rich, remember to create income first. It’s called the free markets for a reason, which means the barrier of entry is relatively low.
However, that barrier of entry can be very painfully expensive without the skill of trading or market analysis because it becomes gambling. This is why there’s a negative connotation attached to the industry of retail trading. The popular myths that accompany this negative connotation are;
- it’s impossible to get rich from the financial markets.
- If it was that easy everyone would do it.
- It takes a lot of capital to start.
These myths incept the masses to thinking that the initial goal should be getting rich from trading the financial markets as opposed to creating a source of income.
Because of this, individuals go into the markets with the sole purpose of getting rich, this becomes the recipe for failure because it leads to bad decision making. This then leads to the second myth; “if it was so easy, everyone would be doing it”.
The solution to debunking these myths for oneself comes in a simple package;
- understand the financial markets in their totality and what asset classes are favorable to your personality. Learn how to analyze them correctly and how to manage your risk with a trading plan. Have a strategic approach that increases your edge.
Yes, it is that simple but not everyone is willing to put in the time. Most think money is the problem but the major de facto here is time. The job market has conditioned society to trade time for money, therefore spending time to master a new skill is a source of discouragement. But a few months of hard focus can lead to proficiency. Enough to create good supplemental income. While it is possible to get rich from the markets, it takes time and effort, just like anything else in life.
Gone are the days of investing.
It is possible to buy and hold as an investor, but this also takes a lot of time and involves a lot of speculation. A lot of this can lead to indisciplined investing. While it might be profitable for some lucky individuals, the gains are made purely on gut instinct or external influence like the news. The downside to this is apparent and needs no explanation.
The topography of the financial markets has changed drastically since the crash of 2008. Investing can create income in the long term and by long term I mean 5–8 years. If this a route you wish to take you can easily invest in an index fund and leave it alone for that amount of time. Index funds are an aggregation of high-performing assets and therefore increases your chances of success.
BUT
In that same duration of time, you can amass a fortune from day trading through strategic compounding of returns and proper risk management.
A Future opportunity for Self Employment.
If there’s one thing I’ve learned as an analyst, it’s that even the richest of people have individual agenda to stay rich. A billionaire’s opinion can sway public sentiment and lead to a tip in the scale of supply and demand. *Coughs Musk and cryptocurrency*
If memory serves us all right, the rich got richer during the pandemic. I for one saw a massive increase in volume and volatility in the markets which I was able to capitalize on. The effects of this pandemic were unfortunate for working-class individuals who relied on a job that involved a physical location and people.
There was a degree of survivor's guilt I felt when I realized that a lot of lives took a turn for the worst. This is due to the fact that a lot of people relied on a steady job that mitigated their risk for them. This turn was a sign to society that highlighted an ugly truth; in the blink of an eye, almost anyone could be out of a job.
Even before the pandemic, your boss was probably not be inclined to pay you what you’re were actually worth in attempts to keep costs of operations at a marginal level. The goal of having a job is to have a “means” to make ends meet. The goal of your employer is to incentivize those “means” to make you a productive employee.
With that said, nothing is stopping you from diverting some of those means to investing in your personal and professional growth. Acquisition of a skill where you’re in control of your risk and income, and you don’t have to rely on a physical location or people is a good alternative to contingent employment if you ask me.
Capital is no longer a challenge
One of the biggest challenges for retail traders in the past was the availability of capital. In addition to that, the minimum capital required to trade with certain brokers was high. Nowadays the emergence of “done-for-you” services has provided a solution for capital to meet talent halfway. The trading version of this has been the emergence of proprietary firms. Otherwise known as profit-sharing firms, prop firms have filled the gap for skilled traders to get ahead by employing their skills consistently. In exchange, they get to keep 30-50% percent of your profits. The benefits of this include;
- The alleviation of the psychological burden of growing one’s capital.
- A healthy emotional disconnection from money for better decision-making.
- A noteworthy value to your minimal percentage gains. i.e. 2% of a $100,000 is a lot bigger than 2% of $5,000.
- Bigger gains with little exposure. You don’t have to take as many trades to make a significant amount of money.
The beauty in all of this is, when you have the skill to provide you with some stable income, you can expand and build a business centered around this, and growth potential becomes exponential.
If you start a job today, your prequalification is what gets you in the door but you still have to go through an orientation in order to understand the ins and outs of your job description. When it comes to trading, it takes is motivated focus to become proficient. This can be considered as an orientation. In this case, you just have money working for you instead of you working for it. We often learn how to make a living working from the neck down. Trading teaches you how to work from the neck up.
Edward Emono
Founder of Golden Ratio club
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