The Real Cost of Trading

Trades and losses go together like peanut butter and jam. Like cookies and milk. Having one without the other is virtually impossible. Ok, maybe you don’t care for the food combo but in trading, you can’t go without taking a loss and it is fruitless to even try. Most lose and that is a fact.

The losses though can end up being much more than monetary.

I get the privilege of chatting with traders during the week. While I enjoy it, I do get to hear some pretty hard stories. Lost jobs. Brink of bankruptcy. Sick family member. The reasons people enter the trading arena are varied but at the end of it all, money is the key factor.

Some of the words I hear are “I must”, “No choice”, “Last hope” and a few other demanding type of phrases. It is worrisome.

The facts are in….

You are more likely to fail. Yes, YOU. Can trading be taught? Certainly. Can everybody learn? You bet. Can most succeed? Clearly not and the reasons…..the hard cold facts… the reason is you. Period. Some are just not cut out mentally for the challenges of trading.

Back to the crux…..

For some, the losses are great. Yes, we know about the monetary loss but there is a darker more troubling loss that some will have.

The loss of themselves.

I have friends in the police force who have changed. The toll the job and their experiences have on them has taken a piece of THEM away. The greatest loss an officer can have is loss of life. The majority will retire but some will still have a loss. They change.

Think of the person who enters trading to provide for their family. As a man, I know at my core how important being able to provide is. Being able to “fix” a problem is just a part of our DNA.

What if, after diving headfirst into trading and spending countless chart hours, you fail? What if you lose your account enough where you can’t even meet margin? You believed you could do it (you have seen those that can) yet your belief never met reality.

See where I am going?

When I hear the desperation in some or the 100% success conviction, I shudder. For some, not obtaining their goal will be met with a shrug. For others, it will be met with negative.

Nothing can zap a person more than having their self-esteem blown out like their trading account. Failing, after your conviction you would succeed, can blow your feelings of self worth to the “What good am I” type of chatter.

Imagine looking at your family and knowing you could not do what you promised you would do.

Harsh? No. I can see the stage being set by some I speak with. You can always make back the $5000 you put into your trading account. Sure, it will require some work and hours but, you can do it.

The psychological scars are not as readily healed. The scary part is that you may have been able to prevent it. Regret? One of the most brutal feelings we can have.

I strongly urge that if you are in the midst of a trading career or just starting out, you play by the book. Risk. Method. Psychology. Get a handle on those!

Thinking of a revenge trade?
Taking too much risk?
Increasing your stop?
Breaking the rules of your positive expectancy trade plan?

While you may think you are taking a capital risk the truth is that your risk is greater.

The risk is losing you. Before you take an undisciplined and haphazard approach to trading, think twice. The odds of success are already against you and there is no need to make it worse.

One of the best things you can do is join a trading community. I am not talking about the many trading forums but a trading resource and education company that staffs real traders. Think of it like a help line. They are there to get you started and are support intervention away when the issues crop up.

Don’t take this lightly. The costs are real. Both financially and personally. Approach trading like a professional.

For more updates from Mark and the team at NetPicks, be sure to visit their trading tips blog at