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Why most people that start trading will never become successful.
Let’s start with what the majority of people do and ways to fix it.
- A Thread
Let’s start with what the majority of people do and ways to fix it.
- A Thread
1. You have limited capital.
- Most traders fund a trading account with <$1000. This immediately puts you at a disadvantage because making 3-5% on a trade is never enough. You need more because you want to get rich tomorrow.
- Most traders fund a trading account with <$1000. This immediately puts you at a disadvantage because making 3-5% on a trade is never enough. You need more because you want to get rich tomorrow.
2. Over trading - The Account Killer
- People think that because the market is open 24/5 they need to be trading all the time. 90% of traders lose all of their capital within the first 90 days of opening an account.
- People think that because the market is open 24/5 they need to be trading all the time. 90% of traders lose all of their capital within the first 90 days of opening an account.
3. You do not have an edge over the market.
- When people hear this term they think “Holy Grail” trading strategy. That is not the case. Having an edge over the market can be anything from:
Risk to Reward ratio
Risk management
Trading strategy
Following your trading plan
- When people hear this term they think “Holy Grail” trading strategy. That is not the case. Having an edge over the market can be anything from:
Risk to Reward ratio
Risk management
Trading strategy
Following your trading plan
4. You don’t have a trading plan.
- If you do not have a defined trading plan your trading will be a rollercoaster and you will find yourself going all in on your next trade because of your ego and being overconfident in your ability to predict the market. Aka confirmation bias.
- If you do not have a defined trading plan your trading will be a rollercoaster and you will find yourself going all in on your next trade because of your ego and being overconfident in your ability to predict the market. Aka confirmation bias.
5. You don’t use risk management.
- If you’re trading without a defined risk management plan you are donating your money to somebody who has one. This is the most important aspect of trading but is always ignored because of the traders account size.
- If you’re trading without a defined risk management plan you are donating your money to somebody who has one. This is the most important aspect of trading but is always ignored because of the traders account size.
6. You’re looking for the easy route
You follow signals in hope that someone else will be able to grow your account for you because you don’t want to spend years studying how the market moves. You depend on others to save you. If your signal provider dies so does your account.
You follow signals in hope that someone else will be able to grow your account for you because you don’t want to spend years studying how the market moves. You depend on others to save you. If your signal provider dies so does your account.
7. You do not have a trading strategy.
- Without a rules based trading strategy your emotions will control your trading. You have to be a robot when you’re on the charts. There is no room for human emotions.
- Without a rules based trading strategy your emotions will control your trading. You have to be a robot when you’re on the charts. There is no room for human emotions.
8. You listen to other traders opinions.
- 2 people can look at the same chart and see 2 different setups. Do not follow anything other than your own intuition when it comes to trading. This is the only way you will know if you are self sufficient in the long run.
- 2 people can look at the same chart and see 2 different setups. Do not follow anything other than your own intuition when it comes to trading. This is the only way you will know if you are self sufficient in the long run.
9. You have a scarcity mindset.
You need to be rich next week because you know that trading can change your whole life but we live in a time of instant gratification where patience is slim to none. Understand that money is nothing more than a tool to make more money.
You need to be rich next week because you know that trading can change your whole life but we live in a time of instant gratification where patience is slim to none. Understand that money is nothing more than a tool to make more money.
10. Now that we have acknowledged the things 95% of people go through in trading what can be done to eliminate them.
11. Solutions
- Limit yourself to 2 trades a day. Win or lose, close your computer and come back the next day.
- Trade the same session every day. The market moves differently in each session. Treat trading like a job. Show up at the same time every single day.
- Limit yourself to 2 trades a day. Win or lose, close your computer and come back the next day.
- Trade the same session every day. The market moves differently in each session. Treat trading like a job. Show up at the same time every single day.
12. Solutions
- Master 1 to 2 currency pairs. Each currency pair moves differently. Pick 2 currency pairs and master them. You do not need to look at 30+ currency pairs.
- Establish a set of trading rules. Write them out. Follow them for a week and see what happens.
- Master 1 to 2 currency pairs. Each currency pair moves differently. Pick 2 currency pairs and master them. You do not need to look at 30+ currency pairs.
- Establish a set of trading rules. Write them out. Follow them for a week and see what happens.
13. Solutions
- Put a defined risk management plan in place. Risk 1-3% per trade. Target 1.5x your risk minimum on each trade.
- Focus on short term growth. Stop trying to flip accounts. Aim for 10% a month consistently and put money into your trading account whenever you can.
- Put a defined risk management plan in place. Risk 1-3% per trade. Target 1.5x your risk minimum on each trade.
- Focus on short term growth. Stop trying to flip accounts. Aim for 10% a month consistently and put money into your trading account whenever you can.
14. Solutions
- Set a rules based trading strategy. Look at historical data and backtest 100 trades or a years worth of data to know the outcome of your strategy. This is where you build confidence in your trading.
- Follow your risk management plan. This destroys confidence.
- Set a rules based trading strategy. Look at historical data and backtest 100 trades or a years worth of data to know the outcome of your strategy. This is where you build confidence in your trading.
- Follow your risk management plan. This destroys confidence.
15. Solutions
- Only trade during times of volume. Trade when the banks and institutions are trading. This is when the big money is in play. Don’t trade the dead hours. Go outside.
- Do not listen to other traders. This is your journey focus on your own shit.
- Only trade during times of volume. Trade when the banks and institutions are trading. This is when the big money is in play. Don’t trade the dead hours. Go outside.
- Do not listen to other traders. This is your journey focus on your own shit.
16. Solutions
- Learn to manage your trade. Move your stop loss to entry as soon as you can. If it gets hit you lose nothing and sit and wait for a re-entry.
- Let your trade run. Let your trade hit your target just as you let it hit your stop loss. Set multiple take profits.
- Learn to manage your trade. Move your stop loss to entry as soon as you can. If it gets hit you lose nothing and sit and wait for a re-entry.
- Let your trade run. Let your trade hit your target just as you let it hit your stop loss. Set multiple take profits.
17. Solutions
- Figure out why you chose trading. You can make money doing anything. Why did you choose this industry?
- Treat your trading like a business.
- When you are in a trade don’t micro manage it. You will be inclined to close it early. Accept the risk. Go outside.
- Figure out why you chose trading. You can make money doing anything. Why did you choose this industry?
- Treat your trading like a business.
- When you are in a trade don’t micro manage it. You will be inclined to close it early. Accept the risk. Go outside.
18. Solutions
- Identify your trade before it happens. You should know your entry zone, stop loss, and potential targets before the trade gets triggered.
- Become disciplined in all areas of your life. Your trading discipline is a direct reflection of the rest of your life.
- Identify your trade before it happens. You should know your entry zone, stop loss, and potential targets before the trade gets triggered.
- Become disciplined in all areas of your life. Your trading discipline is a direct reflection of the rest of your life.
End of thread.
