Why Create Trading Articles? (Op-Ed)
Picture Credit: CoinTelegraph
An interesting (yet constantly repeated) tweet came to my attention today.
It went to the effect of,
“If you’re such a good trader, why spend time drawing up charts and writing information instead of making millions on the market?”
1.) I don’t have a paid group. But you all know that. So that argument of hustling a paid group* to make money because of a lack of trading aptitude can be thrown away from the start.
2.) This question is almost like asking a woman, ‘Why do you have sex with your husband for free at night, then wake up in the morning to go work a job? Surely it would be wiser to quit your job and become an escort.’ Assuming you receive a real answer to that question and don’t get slapped in the face, you’d probably hear something along the lines of people not automatically deferring to whatever option would technically be the most lucrative for them. There’s an element of human happiness that you have to consider here. It’s the reason why some people would rather be law professors instead of working for 5x their salary at some prestigious law firm. There are things in life worth more than $$ like your time, freedom, family, dignity, etc.
3.) The idea that, ‘If you were really that good of a trader, you would be making millions’ is based on the fundamental misconception that you being a good trader somehow creates more opportunities in the market for you. You can only choose from what’s available. Sometimes its more prudent to simply not enter any positions. I’ve made plenty of good trades that only resulted in 5%-7% gains and those gains were only on 15–20% of my portfolio at times. The only differences between a ‘good’ trader and a ‘bad one’ is one that has a better understanding/system for entering and exiting positions on trades in profit. But you don’t become Nostradamus one day and magically point at every correct choice available and you don’t magically gain the ability to control the markets. It’s not like “Oh, I’m a good trader, so I’m going to make 500% on Bitcoin today because I’m such a good trader.” No. I’m trading on the same order books as everyone else. So, I could short/long on Bitcoin from the tippy top or the absolute bottom and I’m limited to however far the price moves.
5.) Being a good trader will more than likely moderate your gains. See, ironically, the ‘better’ of a trader you are, the more conservative your gains will probably become. You’ll start employing more complex R/R strategies, stop losses, becoming more comfortable with taking losses in certain situations for the sake of maintaining a positive delta on your portfolio, etc. Being a great trader isn’t about making all the “right calls”, it’s about making money overall in a safe and SUSTAINABLE manner. I don’t initiate trades to make it look pretty, I trade to make money. Sometimes I have an ugly day where I was dead wrong on like 2–3 coins or S/L’d out of the position, but I get bailed out by an unexpected dark horse pick and that puts me in profit. I’ll take it.
6.) Realistically, “to make millions” trading, you need to already have millions. I don’t care if you have an actual crystal ball — if you only have $10k available to trade (no leverage), then you’re not making ‘millions’ anytime soon. On top of that, if you’re a good trader, you would never just go in 100% on some coin. That’s not good trading. Even if you did the TA on the coin and you see a crazy chart pattern that makes you feel like there’s a 98% chance its going to the moon, you still shouldn’t go all in. If you’re “that good of a trader”, then you’re disciplined. And if you’re disciplined, you’re making smart, non-emotional decisions that are designed to protect you from losses and guarantee profits. Period. Greed will make you broke in trading. Plain and simple. Therefore, the idea that you could be “making millions” if you were “that good at trading” is preposterous in its premise.
7.) I don’t know about you guys, but I’m not comfortable moving my entire net worth on any crypto exchange. There’s a finite amount of money that I’m ever willing to leave in someone else’s possession (since all the ‘decent’ exchanges w good volume don’t let you hold your private keys) and that finite amount decreases exponentially the less information I know about the exchange. Suppose Binance becomes insolvent tomorrow? What would you do? Who do you call? You don’t even know where CZ is. They have no legitimate support line or anything to call and I’m willing to bet most of you don’t live in Malta where you could even attempt to approach him. You’d be screwed. And even if you did find him, he’s insolvent with no insurance — what can he do for you? You’re just another Gox victim. Kicking his ass won’t magically fill his wallet up with your money and neither will him going to jail. You might have to just take the L.
8.) I forgot to mention, Warren Buffett is an investor that has actually made these “billions and billions” of dollars on the market because he was “that good at trading” and he still….wait for it….
Wrote up a book full of business/investment advice that you can buy right now on Amazon and the money isn’t going to a charity. It’s going in his pocket.
So Warren Buffett is actually living proof that, even if you were a super successful investor making billions of dollars on the market from investing, you may still desire to pass on whatever knowledge that you have and even attempt to profit from that knowledge.
He could easily give that book away for free on Amazon. He probably doesn’teven notice the revenue from that book drop in his account. Probably wouldn’t notice it if it fell right out of his pocket he’s so rich.
So what made him decide to take time out of his busy and super successful life as an investor to write a book that would generate considerably less than he would make investing on the markets?