I am sure there is a lot of truth in this. Naturally, if one receives professional training from being employed in an institution that is a big advantage - but it does not, by any means, guarantee that the person will become a good trader.
During my time in the trading room of an international commercial bank I saw many new entrants that, having gone through their induction and various training courses, decided that forex and, in particular, trading was not for them. It did not suit their personal make-up nor their career objectives. Often, the sheer stress of carrying a risk position was too much, sometimes it was just the “futility” of just trying to make profits for profits sake.
There are many personal traits that make up a trader that do not exist in everyone. For some people there is a negative stress factor even in carrying a profitable position, let alone a losing one! It is important that any trader searches their inner self and decides is this really for me. The psychological and personality aspects of trading are greatly undervalued, even though they are the key factors underlying such famous truisms as “run your profits, cut your losses”.
But the point you raise about being trained by an institution does highlight one other major difference:
When you work for someone else, you are trading someone else’s money. But that does not make it entirely easier because you need to earn a salary. And especially because you are also trading in the full view of your colleagues and bosses. Your performance is constantly under the spotlight and you are constantly aware of it. This pressure does wonders for sharpening one’s focus on the job.
As a retail trader one is effectively self-employed and, as anyone who has run their own business will surely agree, only being accountable to oneself makes it difficult to always maintain the discipline and dedication that success requires. It is so easy to take risks and unplanned positions when you don’t have to explain them to anyone else.
But one should remember that a business cannot survive based on just a product idea. A normal company will have a team of experts covering product development, marketing, sales, finance and many other fields of expertise. As a self-employed retail trader you will need to cover all the required fields of expertise yourself.
I was reading @MikeWolski’s thread where he talks about his plans for starting out trading from home and it was interesting to see that he has even planned to dress for the part. That might sound a little naive, but it is precisely the right mental attitude needed to survive as a home-based self-employed person. What makes this mental approach even more crucial in trading from home is that for most of the time we are not physically or visibly doing anything. It is difficult to convince family that we are “working” and just as difficult to keep our own concentration and focus alive as though we were in a dealing room in an institution with many others.
Whilst a financial institution will (normally) survive, not all its traders will. But as a retail trader you are your own “financial institution”, and if you fail as a trader so does your “institution” . and if that thought does not boost your intentions to take your trading extremely seriously and professionally, as well as create a sense of pride and ambition to build your “institution”, then your chances of long-term success are probably quite fragile.
As you suggest @Falstaff, good driving is not about foot pedals, it is about eyes, ears, brains and limbs coordination and a good dose of practice and experience…