The Top 3 Reasons you should treat Trading as a Marathon, Not a Sprint

by Trading 101  //  Oct 29, 2018

If you’ve been on the internet for the last few years you’ll have heard plenty of stories where someone’s made a lot of money in a very short amount of time due to making some sort of half risky, half genius investment in the stock market. However, don’t let such a thing fool you – every reputable Trading 101 guide you’ll find on the internet is going to teach you that trading is a marathon and not a sprint. Often, trading for short-term cash-outs is going to be high risk at potentially high rewards. At those odds you might as well go the casino because there you’ll be playing against other players and not a market with millions of variables.

What do we mean when we say trading is a marathon? It’s exactly what it sounds like. Trading 101 is to prepare for a long marathon, and like a professional runner, you need to have a strategy to reflect that race.

Only your end results matter.

You need to stay disciplined and pace yourself and use your energy in a way that’ll net you long-term profits rather than risking a loss in the short run. At the end of the year when you review your financials, the only thing that’ll really matter are your overall results. You should never be making an individual trade that has the potential to determine the entirety of your portfolio’s success. What your need to be looking at are the results of your portfolio over the total number of trades you made in a year – one big win isn’t great in the context of dozens of bad ones.

Experience is tantamount to success.

No one turns into a star-studded finance guru overnight. Becoming a great trader requires experience, and to gain experience you need time, research, drive and most importantly – trades to gain experience on. Take note that experience will teach more than any book can, because all the technical asides of trading are useless if you cannot put them into practice. If you have no experience and want to give yourself a proper trading 101 before going into the real world of finance, the easiest thing you can do is demo-trade. There are many websites that offer demo accounts where you’re trading on real stocks with real-time data, but with imaginary money. This is a great way to test strategies, indexes and funds or to just have some fun. This is an easy way to get experience and put you into the field.

Successful traders plan and trade for the long term.

Research has shown that long-term strategies lead to higher rates of success than most short-term ones. The key is plan goals for the whole. Once a goal is set, do some traditional backwards planning to see how your annual goal splits into a monthly goal to strive for. Some of the greatest investors of our time, or of all time including George Soros and Warren Buffet became so successful due to their meticulous planning and long-term strategies. They abided by their principles in every trade, putting their strategy ahead of potential short-term profit – and despite them telling everyone how they became so successful, new traders still believe they know better than them and go for the immediate win with reckless abandon. If you want to roll with the big players, you need to play like them – smart, patient and disciplined. You might be trading with your own money, but professional traders invest other people’s money, so they have far higher stakes in the game to succeed – meaning everyone should be learning a thing or two from them.





Get unlimited access to our Learning Center,
Broker Insights and Exclusive Promotions for Free!

Open an account