Is Trading the Right Fit?

Focus: STRATEGIES

John Forman Image John Forman Senior Forex Analyst, Thomson Reuters IFR Markets

For the benefit of all newbies questioning whether or not they are really cut out for trading, John Forman of The Essentials of Trading extrapolates on a colleague's post about a trio of warning signals to watch out for, each of which could be very telling.

I don't know if this is really a recent post or not as every post on her sight seems to have the same date on them at the moment, but at some point Jessica at Rouge Traderette shared some thoughts on how to figure out if trading maybe isn't for you. She presents a trio of signals that maybe it isn't. I'll address each in turn.

1) You Can't Sleep

I actually think this might have more to do with either excitement or excessive risk taking. We've all been in situations where we're just too excited to sleep at night. I know in my own trading there have been times I've awoken in the middle of the night and checked my positions to see how they were doing from a positive perspective. Do you maybe want to reign that in a bit? Probably.

From a negative perspective, if you can't sleep because you're worried about the market going against you then you're probably trading too big. You'll sometimes hear the advice that you should set your position size to the point where you can sleep at night.