Trading.

Recently, we have a lot of new, interesting markets to skyrocket, including cryptocurrencies, marijuana pots, and others. This gave me an incentive to search for passive income in these markets.

There is no comfort zone in academia. Contracts are short, and you are never guaranteed that there will be another spot for you. You may not get your dream next job right after you finish your previous contract.

But, when I entered the world of trading, I didn’t know how difficult and disturbing my new life can be.

The market is overly crazy. Major corrections happen at pseudo-random moments, and your assets can grow and shrink by as much as 30% a day. All of this makes trading a serious test of personality and willpower.

Am I a Strong Person?

Are you a strong person? This is a disturbing question as anyone would prefer to think of themselves as someone strong in their minds.

However, investing in a volatile market can easily expose all your weaknesses.

For instance, it is a good habit to constrain yourself from buying into currencies or stocks. This applies especially to those that have already been on the exponential growth trend for a while.

This is, in most instances, a losing practice. If you do so, you are almost guaranteed that the trend will reverse as soon as you get in.

You most likely know about this. Yet, it is terribly hard to say ‘no’ to this urge of clicking once you see a few pretty greens growing candle bars in front of your eyes, and to resist running once you see red bars on the other hand. According to Barber and Odean (2000), individual investors who trade the most earn markedly lower returns.

According to Kahneman and Tversky’s (1979) prospect theory, people feel the pain of a loss roughly twice as intensely as the pleasure of an equivalent gain. This is exactly why cutting a losing position feels so much harder than it should. 

Why Is Good Information So Hard to Find?

Also, the internet is full of false or misleading information. It is increasingly hard to find useful information. Most of the news on forums, or even in the press online, is simply a scam.

Some people just do not know enough to formulate good advice. Others evoke mess on purpose, for instance to pump and dump some assets and make a profit on it.

According to the U.S. Securities and Exchange Commission, fraudsters routinely hype crypto assets on social media to inflate their price before selling off their own holdings. Everyone who bought in afterward is left to absorb the losses.

Therefore, it is hard to find out what to invest in, even if you spend hours reading every day. 

In such a situation, on one hand, you are pushed to fight against your natural instincts to keep yourself safe. On the other hand, you are exposed to a lot of external dangers: the information chaos online, and a crowd of not-so-much-trustworthy journalists, YouTubers, and bloggers.

Why Is Trading More Stressful Than Research?

Also, the market is live 24/7. This means there is never a true weekend, true vacation, or true moment of peace and quiet – unless you consciously decide to ignore the world around you for a period of time. 

I can honestly say that stress-wise, trading is much more demanding and challenging than doing research. According to Lo and Repin (2002), even professional traders show measurable physiological stress responses during volatile markets.

Researchers often complain that there is no comfort zone in academia, but the level of discomfort in academia is nowhere near what you experience in trading. If you make any trading decision, either go in or go out from any position, you can never be sure you will eventually make a profit, no matter how many trend indicators, and how much insider information you are using.

Why Is Trading So Uncertain?

It is always only a certain probability, and you will never have a feeling that you did the right thing after you pushed the ‘buy’ or ‘sell’ button. You have to be alert the whole time, and you never have a day of self-satisfaction and chillout. 

How Did My Trading Journey Begin?

For me, the beginnings were extremely difficult as I was blaming myself for the wrong decisions I had taken, plus I was making a lot of impulsive moves.

There is a phrase saying that the stock exchange is a platform to transfer money from the impatient to the patient, and this is definitely true. With time, I managed to tame myself somehow and develop a little bit of patience. I no longer harm myself with compulsive jumping onto the trend.

Where Do I Stand Today?

However, there is still a long way before I can ever call myself a trader. This year will be very interesting, but also very hard as trading can be nerve-wracking.

I treat this experience as self-development though; I believe that trading can make you grow as a person, and help in developing a thick skin that you need in daily life, whenever you do research or any other profession. And, this is how I approach it.