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Build the Proper Foundation at the Outset Before the Market Humbles You:

Typically when someone is searching for the cheapest way to trade stocks, they’re usually concerned about the commission fees they have to pay to their brokerage firm for each transaction. A few years ago, a standard commission fee would’ve been about five to ten dollars per trade. These days, however, most major brokerage firms have completely eliminated commission fees for self-directed stock trades, including platforms like E*Trade, Fidelity, Charles Schwab, and TD Ameritrade, among others. So if you’re looking at the cost of trading stocks from a surface-level perspective, it’s nonexistent if you open an account with one of these brokerage firms.

what is the cheapest way to trade stocks - avoid learning the hard way

But if you dig deeper, you’ll realize that the heftiest costs involved with trading stocks are the result of bad trading. The substantial losses that occur from impulsive, erratic, and irrational trading behavior. It’s important to realize that this type of highly inconsistent and emotionally-fueled trading isn’t rare amongst market participants – it’s rampant. And it’s the major reason why over 90% of traders ultimately fail. In fact, nearly 50% give up after just one month because they’re not equipped with the appropriate mental framework to be effective within the market environment. But with the proper focus on mindset (the foundation of successful trading) right from the start, you can completely avoid financially expensive and emotionally debilitating market lessons. Why put yourself through that level of pain by refusing to embrace the right mindset? The harsh truth is that the market will only continue to humble you until you do.

Top 3 Reasons the Vast Majority of Stock Traders Fail – Sidestep These Common Traps:

It can be discouraging to hear that the overwhelming majority of traders fail, but the good news is that failure doesn’t have to be your reality. Because with application of high-quality information regarding mindset and tactics, your odds of success are markedly higher than the average market participant. There’s immeasurable opportunity in the market for those willing to take the right approach.

1. Look Outward Instead of Inward

Society as a whole tends to focus on outward appearance instead of internal structure. Just take social media for example, which accurately illustrates this universal problem. A large number of active users on these platforms focus so much of their attention on other people’s lives that it comes at the expense of their own mental health. These people also become addicted to the short-term dopamine hits their brain receives from actions such as “likes”, “thumbs up”, comments, and shares. But is it worth the cost?

Now imagine these people operating within the market environment and it becomes crystal clear why so many traders fail. Their minds are compromised – they’re weak and undisciplined. They lack focus and self-control, and have a hard time regulating their behavior because of it. These naive, inexperienced traders spend all of their time looking outside themselves for THE answer – a “foolproof” system, “guru” alerts, and any sort of “get-rich-quick” method they can find. They place random trades, jumping from strategy-to-strategy, and losses inevitably start piling up. As a result, they turn around and blame external forces for their personal misfortune – never looking inside themselves for answers. They render themselves completely powerless by deferring responsibility, never making the critical connection between their own mindset (thoughts, emotions, perspectives, etc.) and the trading results they’re generating. Overall, the only thing they consistently do is prioritize short-term emotional gratification over being a long-lasting, successful trader.

2. Attempt to Cheat Cause-and-Effect

Knowingly or not, most traders try to cheat cause-and-effect. There’s a lack of understanding between how their inputs produce outputs. When they put garbage in, they get garbage out. Incredibly, most traders operate impulsively, carelessly, and irrationally, but then expect consistent, steady profits. Simply put, it doesn’t work this way. Surrendering to impulses by doing things like constant strategy-hopping, jumping into trades without triggers, removing stop losses, doubling-down on losing positions, and the list of unsound behaviors goes on-and-on, can only produce one overall outcome – random and inconsistent results. Not to mention that those random, inconsistent results will also most likely be negative, especially over the course of more than just a handful of trades. In other words, if they want to achieve consistent profits, then they need to implement a consistent, structured approach.

mental discipline trading in the zone quote by mark douglas

And that consistency has to start in their mind. The majority of traders bring attitudes, perspectives, and behaviors into the market that simply aren’t effective. These patterns of thought and behavior may have served them well elsewhere, but they don’t work within the unique confines of the market. This new environment has qualities and characteristics that we’re just not used to. We’ve been conditioned by society to rely on authority figures (parents, teachers, police officers, etc.) to provide us with rules, codes of conduct, and laws to follow for our own well-being. But the market environment, on the other hand, is limitless. There’s no external structure in place to stop us from taking bad risks and suffering the consequences of those actions. So we have to take matters into our own hands and create a framework for ourselves. By creating a system with a mathematical edge and cultivating the mindset to be able to execute that system with the highest possible degree of discipline, there’s nothing else really needed to be consistently profitable. Overall, operating within a new environment that has characteristics we’re not accustomed to requires change, especially within our mindset.

3. Possess False Perceptions of Entitlement

We live in a society that rewards certificates, degrees, and other qualifications that are basically just pieces of paper. We have an educational system that hands them out liberally, without necessarily preparing individuals for the job market. Even still, common practice amongst our society is to value these certificates. The stock market, however, doesn’t judge anybody based on the certificates, degrees, or qualifications that they have acquired. Your past achievements and reputation mean nothing to the market. Just because you have a degree from a prestigious institution or think you’re intelligent because you’re a lawyer, doctor, accountant, or have achieved success in any other field, doesn’t mean you’ll automatically be successful as a trader. It requires a specific mental aptitude to be able to weather the ups-and-downs of the market with stability and control.

Take Bob, for example. Bob has been a doctor for ten years, decides to deposit a large chunk of money into a brokerage account, and thinks he can make some quick money in the market. He’s smart and accomplished, so why not? He proceeds to put in a handful of hours of research until he finds what he considers to be an amazing opportunity. Since he’s so impressed by this opportunity and can’t wait another moment to take advantage of it, he immediately goes all-in. After all the research he put in, how could he be wrong? And if he can only be right, then there’s no reason to have a stop loss. Next thing you know this “amazing opportunity” turns into a “gigantic misfortune” and Bob is left devastated emotionally and financially. This type of scene plays out endlessly in the market. The moral of the story is that just because you view yourself as “intelligent”, “talented”, or “accomplished”, and that you devoted some effort and time toward researching a trade, it doesn’t guarantee a favorable result. The bottom line is that the market owes us nothing. We may consider ourselves to be good at math, researching companies, analyzing patterns, or trying to predict the market in some way, but the reality is that we will still be wrong a lot of the time. And without safeguards in place to protect our downside, we’re doomed.

Develop the Proper Mindset Unless You Want the Market to Teach You Expensive Lessons:

Predominantly, traders jump straight into the market completely unprepared, especially from a psychological perspective, and this mindless and misguided approach almost always leads to failure. But it doesn’t have to be this way and hopefully I can help many traders avoid this terrible fate in the future. Luckily, there are some individuals who are able to acquire the self-awareness and self-control necessary to turn their trading operations around for the better. Because they finally come to the realization that their mindset is the main problem, make the appropriate changes, and eventually succeed. In the end, there’s no greater feeling than to confidently implement a fluid and consistent approach, knowing that trades won’t result in emotional and financial misery because you have the internal (mindset/paradigm) and external (system/strategy) structures in place to handle absolutely anything the market throws at you.

trading paradigm update your neural pathways

You simply can’t fight the market, yet that’s what so many traders attempt to do. It’s a losing proposition. The only way to achieve consistent profitability is to be in harmony with it. Your attitudes, perspectives, and behaviors need to align with the realities of the market. You see, the proper mindset isn’t just nice to have – it’s essential for long-lasting market success. As you embark or continue on your trading journey, keep in mind that there is an extremely high cost, both emotionally and financially, associated with not executing your operations with discipline and consistency. So you might as well develop the mental capabilities to be disciplined and consistent in the beginning, otherwise the market will have no choice but to inflict pain upon you – either until you cut your losses and quit, completely run out of money, or realize that critical changes need to be made to your current mindset.

The market is ruthless in teaching mindset lessons. If you enter with a compromised mindset, don’t expect to leave with money.

Learn More in the Trading Success Framework Course

Written by Matt Thomas (@MattThomasTP)

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Matt Thomas

Founder of, Creator of the Trading Success Framework Course & Trading Paradigm Skool Community, and Intraday Futures Trader Using Auction Market Theory & Profiling (Volume & Market Profile).


  • Sergej says:

     It’s very interesting to realize how a mindest can always drag you to losses despite implementing a handful of strategies that looked promising at the start. A paradigm shift is essential in developing accurate and new ways of looking at the markets and discovering what could have gone wrong with the previous trades. Until one is able to examine themselves and be willing to create new neural networks, most probably they’ll curse trading within a few days after starting.

  • Sheen says:

    Gosh Yes Mindset is so important and I really like your analogy with social media.  How we look for outside appreciation rather than acknowledging ourselves first.  We, therefore, constantly look to what others are doing thinking they must be right and we must be wrong!

    Wonderful that you include the word “consistent”!  Most of us buy-panic-sell! I like that you mention consistent profits will come with a consistent and structured approach.

    I think stock traders are very brave and I would rather do index trading and over a longer period.  

    Thanks for writing this enlightening blog.

    • Matt Thomas says:

      Hi Sheen – I appreciate you sharing your thoughts! Many stock traders seem brave, but those are usually new/inexperienced traders with a false bravado/cockiness. Good trading is actually about risk management and protecting your downside. If the risk/reward ratio isn’t sufficient, those trades should be avoided. Most people automatically label trading as “risky”, but the fact of the matter is that no trader has to take any trade that they’re not 100% comfortable with. Every entry and exit is within their control, therefore, the risks they take are entirely within their control. But there’s a tendency to treat every trade like it’s entirely out of their hands – and that’s the wrong approach. This is just one of many psychological flaws for most traders – they don’t know how to properly deal with risk and uncertainty within the market environment.

      There’s nothing wrong with choosing a longer term investment strategy or not even trading at all. There’s also nothing wrong with doing both short-term trading and long-term investing. It’s entirely up to the individual and their particular aspirations and preferences. Even though it’s extremely easy for pretty much anybody to open up a trading account with a brokerage firm, that doesn’t mean achieving consistent profitability is easy by any means. It takes dedication and sacrifice to achieve consistent day and swing trading success. There are no shortcuts for it (gurus, secret indicators, foolproof systems, etc.). The only way to get there is by building core skills and the proper mindset. Take care!

  • John says:

    This is a great analysis that everyone should read that is buying/selling shares in any capacity – whether trading or even buy and hold.  When I read the list of trading mistakes, I realise I have made many of them.  They hurt at the time but we need to take ownership of them. I particularly like how you emphasise the focus on mindset and strategy should be our top focus, rather than costs of brokerage.

    • Matt Thomas says:

      Thanks for sharing your thoughts, John! The transaction fees charged by brokerage firms are lower than ever these days – most now offer free self-directed stock trades. But even when brokerages charged $5-20+ per trade in the past, the cheapest way to trade has always been to acquire core skills, find/develop a validated system, and attain the proper mindset first. Many traders worry so much about brokerage fees, but then proceed to trade randomly, impulsively, and irrationally. Trading that way is what will cost the most in the long run – not fees. Take care!

  • Nedia says:

    As a trader my self I do not believe there is an easy way to trade stock except from what you outlined in this article but more importantly developing the proper mindset. Trading is all about the mindset with out the proper mindset and treating trading as a real business you will purely be gambling with your money.

  • The Bit Guy says:

    This information is really needed at a time when it’s all too important to gain another source of income instead of a major expense from losses in the market. That last point really hit me though about a false sense of entitlement which stifles many who think they have what it takes to be a great trader but don’t understand the workings of the market environment and the necessary mindset. This knowledge is really good to have to prevent making the biggest mistake that the majority of traders make.

  • Alex says:

    This is an interesting view on stock trading. Usually people think trading is entirely about having a natural ability to pick winners or develop a foolproof system. But I really think your view as trading being mostly a mental challenge is more accurate, and I liked the analogies you used. It’s true because I’ve met people that have spent years and years studying stock trading but still they are no more than average traders. And now that I think about it, most of them do some of the exact things you mention here; impulsive trading, lack of connection between emotional state and results, and so on. I will share your article with them to see what they think.

  • Imelda says:

    This is such a great point. Stocks have always frightened me so I have done my best to stay away in the past as I did not have the money to “burn”.

    Your article provides me with some hope that fluid and consistent trading can be achieved with the proper mindset.

    Do you think that anyone can trade? What is the best way to start as a complete novice?

    • Matt Thomas says:

      Hi Imelda – great questions. I think anybody can develop the mental and tactical skills necessary to trade effectively. They can both be developed with practice and experience. But in real life unfortunately, over 90% of traders fail – and there’s no doubt in my mind that the main reason for it is ineffective mindsets. So the best place for new traders to start is with developing the appropriate mindset to be effective within the market environment. One of the best courses I’ve come across so far that covers the psychological implications of trading and also offers practical tools to help traders be more effective is The Trading Psychology Mastery Course by Yvan Byeajee.

      The problem is that most new traders have no idea that their mindset is an issue. It’s not usually something that they’re even consciously aware of. The typical starting point when somebody is interested in trading is to start searching online for “gurus” and “foolproof systems”. Unfortunately, this route doesn’t typically end well. There’s usually quite a bit of emotional and financial pain involved before some traders come to the realization that it’s indeed a mindset/paradigm issue.

      I know because I’ve been there. I made all the mistakes in the book when I first started out: blindly mirroring alerts and hot stock picks, not implementing any risk management tactics like stop losses, doubling-down on losing positions for no good reason hoping for recoveries, and the list goes on-and-on. Since a proper mindset is the foundation of trading success, it’s undoubtedly the best place for beginners to start, but unfortunately most traders don’t even take it into consideration until much later in their trading journeys (after the market teaches them some excruciatingly painful lessons).

  • Christina says:

    I am personally astounded by how many people will carelessly toss their money into the marketplace. The only trading I’ve ever done was Bitcoin just for the heck of it and I took it out as soon as I made a decent profit and haven’t looked back. If I wanted to truly be successful in stock trading I probably could, but that is not my goal. Unfortunately there are too many scenarios of people just getting ridiculously lucky by having the stock at the right place right time which tends to make people think it’s easy when in reality it’s an entirely different ball game.

    • Matt Thomas says:

      Hi Christina – I appreciate your comments. To add to your thoughts, I think one of the major reasons most people have unrealistic expectations when it comes to trading is because pretty much all they see are great trades shared on social media and everywhere else online. But those good trades being shared certainly don’t tell the whole story. It’s not overly difficult to execute one or a few hugely profitable trades, but that doesn’t necessarily correlate to being a long-lasting, consistently profitable trader. The trader sharing his one amazing trade can potentially have even more huge losing trades that can be wiping out all of his/her gains. In other words, they could be taking terrible risks that result in huge wins some of the time, but also huge losses even more of the time. Ultimately, one or even a handful of good, cherry-picked trades means close to nothing. Much of the time, the incredible trades that get shared are typically just masks that cover over unnecessary risks and huge losses.

      Another thing to keep in mind is that there are countless “sellers” in the stock trading space that market their “foolproof” systems and “explosive” returns, but these promises are typically too good to be true – it’s mostly just marketing hype. The reality is that nobody wants to share their losing trades because it would make them look bad and hinder their ability to sell whatever products/services they’re selling. And the legitimate traders who are actually making money consistently, and possibly even pursuing trading full-time for a living, don’t want to share their systems and results because making it known would reduce or completely eliminate their edge in the market. Overall, the majority of references the general public has available to them is full of extremely profitable trades that others have executed online, and it blinds them from the realities of the market and what it takes to be a good trader. The stock market is no place to be careless, undisciplined, impulsive, and irrational.

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