An excerpt from the conversation:
I think, as with any other job you have to take some serious training. Trading is a very demanding occupation I can think of quite a few jobs where your wages can vary from a low wage to a good wage in a day. But not many jobs when after working hard for 9hrs you are 2 grand worse off you will have to accept this some days.
So first you need to be financially stable it’s no good trading with next months mortgage. You need to train yourself by reading, watching the markets, talking to other traders, paper trading, etc, etc,
You need a proper strategy. Its not good enough to read the Sunday Times and trade all the tips you find.
You have to have the right Psychology the market eats gamblers for breakfast.
You need sound money management, is no good betting the farm on a tip you get off a web site.
You need to protect your capital using stops, spreading your risks, limiting your trading size Its no good making 6k one week to lose 8k the next.
Money is the traders most important tool without money you are not a trader.
But without training self-discipline or the right psychology it will be very hard.
In addition to these, I have also learned that one should take responsibility for the trade. With that being said, Warren Buffet's
Never lose moneyrule is just a lame excuse for the lazy trader who doesn't want to take responsibility of a losing trade that he/she has put up.
Think stop loss as a cost of doing business, like transportation expense or payment to the staff that you just fired after sleeping at a very busy day at the office, which of course you could easily gain back by doing better business/hiring better staff the next time around.
The only time you will actually take a loss is when you put up a trade you didn't bother to plan or worst, didn't even think when you put up the trade.
