The long way to becoming a trader - risks and challenges

Your way to becoming a trader. With the test & numerous tips you start successfully. All details about the risks & challenges.

Only a few make quick money

Large managers from well-known hedge funds receive commissions in the double-digit million range - or even more. Many investors who are active in the financial markets for the first time also dream of this luxury. In reality, however, only a fraction of traders can really make a living from trading. Again, only a fraction of it earns salaries that enable a carefree life in luxury.

The trader is an independent sole trader. Lunch breaks, sick days and holidays are not paid for. Many traders sit between 12 and 14 hours a day in their office, staring at multiple monitors. Charts and news run in the background via the ticker. Decisions have to be made within seconds - all day long. There is not much time for leisure and family. Despite this high level of work, the trader's salary is still far from certain. Even after an exhausting 14-hour day, there can be a minus. Every trader, however informed and experienced, is always exposed to the development of the markets. Happiness also plays a role in some areas, even if it is rather subordinate.

The long way to becoming a trader - risks and challenges

Incredibly high mental challenges

Traders always have the feeling that they are missing something. If new important messages arrive, this can cause extreme price fluctuations within minutes, which must then be reacted to accordingly. Coupled with the constant uncertainty about one's own salary, this can gnaw away at the substance of the trader. It is therefore hardly surprising that even successful stock exchange professionals often suffer from anxiety, depression or bournouts. Hardly any other sector is affected by mental illnesses as badly as the financial sector.

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How people deal with mistakes

But this does not end the mental problem. The subconscious handling of success and failure also creates problems for traders. Basically, people always learn best when an experience is linked to an emotion. The stronger the emotion, the higher the learning effect. The human brain does not check whether the strength of the emotion was justified or whether the learning effect is really desired. The experience is stored strictly according to the level of emotion.

All traders make mistakes during their career. Not every position can develop as desired. Most people are much more upset about losses than they are happy about profits. The emotion of the error affects our behavior much more than that of the profit. Many traders are also upset about profits - for example, about exiting too early or too late. Even this winning trade is then subconsciously saved as an error. On the emotional level, therefore, traders rate themselves significantly worse than they really are.

The long way to becoming a trader - risks and challenges

Hard consequences for the psyche

The factors mentioned can lead to a trader becoming mentally ill is wiped out on the stock exchanges. From a psychological point of view, this has similar effects to bullying by the boss or other employees. Even minor and sometimes unavoidable mistakes are severely punished. Successes and profits are only noted and only slightly recognized. No trader can endure such a situation in the long run.

What is actually unusual about the trader's profession is that he himself is responsible for the psychological effects of "bullying". The mental state is extremely important for successful trading - a vicious circle for many traders.

Against the background of the permanent pressure to perform, the high workload and the mental effects, it should be clear that trader is not a dream job. At the same time, there are also many traders who have learned to deal with these problems and are successful in the long term.

The long way to becoming a trader - risks and challenges

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