Editors Note: James Altucher has long traded with the best of the best in the stock market. As for us Bitcoin traders, we may think we know everything, but these tips provided by James really hit home for those trying to daytrade in the bitcoin market as well.
I was a day trader for many years, and it almost killed me.
I made money by making profits on my own money and also taking a percentage of the profits for the people I traded for. I traded up to $40 million or $50 million a day at my peak. I did this from 2001 to 2004.
I learned about day trading but I also learned a lot about myself and what I was good at, what I was horrible at, and what I was psychotic at. Things that had nothing to do with day trading.
Day trading is the best job in the world on the days you make money. You make a trade, then maybe 20 minutes later you are out of the trade with a profit, and for the rest of the day you think about how much money you made.
It’s the worst job in the world on a bad day. I would make a trade, it would go against me, and then I wanted my heart to stop so my blood would stop thumping so loudly.
I did it for years, though, because I was unemployable in every other way.
Here’s what I learned. All of these lessons I will certainly use today, many years after I stopped day trading.
A) You can’t predict the future. Everyone thinks they can. But they can’t.
This applies not just to trading but everything. You could be married for 10 years and the next thing you know you are divorced and you would not have predicted that.
You could be healthy all your life and drink your vegetables and exercise and reduce stress, and a year later you could be dead from cancer.
You’d have much less stress if you let go of trying to predict the future.
You can always seek to increase the odds in your favor. If I don’t jump off bridges, for instance, it’s more likely I’ll be alive a year from now. But certainly a path to unhappiness is thinking the future can be predicted and controlled.
B) Hope is not a strategy.
If you get to the point where you “hope” you don’t get ruined, then you did something wrong beforehand.
For instance, if you plan a wedding outside and you don’t have a backup plan in case it rains, then you probably mis-planned your wedding, unless you are getting married in a desert.
“Hoping” is not a bad thing. I hope that every day my life goes perfectly.
But if hoping is the only thing I’m relying on, then it means I didn’t really look at all the possible outcomes of something that was important to me.
C) Uncertainty is your best friend.
A hundred percent of opportunities in life are created because people are uncertain about almost everything in their lives.
We are constantly trying to close the enormous gap between the things we are certain about and the things we are uncertain about, and almost every invention, product, Internet service, book, whatever has been created to help us close that gap.
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