COMMON TRADING PROBLEMS : UNDERCAPITALIZATION

Alright everyone, we are going to talk about building a small account!!!

No, No we aren’t! This is one of the main problems with watching other traders on platforms such as YouTube, and around the internet. Starting with small capital although sounds like a possibility, the likelihood of any trader, even an experienced one taking a small amount of money and turning it into a fortune is very slim. In fact many traders don’t last long in the markets due to a lack of adequate capital to begin with.

What Is The Right Amount Then??

It is hard to say. So many people have different lifestyles and feelings about money. We should first start by determining if we are responsible with money. If it is hard to get by already, then adding a very expensive hobby to your life may not be the best thing. That’s not to say we couldn’t strive to get ourselves on the right track now though!

What You Should Know

Most people lose big. While the Markets can be used to create huge wealth, it has also done a pretty fantastic job at taking it. Some traders have reported loosing over 300k in their first couple of years trading. You don’t have to give your fortune to earn one however, you must take this opportunity with the complete understanding that it will take some time to be able to extract money from the market on a consistent basis.

The typical entry trader goes from a paper trading account, to as soon as they have some extra money, they are in the market live. While being eager in most cases can benefit you, in the market it isn’t the best approach. We have many psychological tendencies that we have to manipulate in order to make sense of ourselves and then, we make sense of the market. it can be done simultaneously, but it will cost you a ton.

Learn patience, in this game the only way to get to a level of profitability you must be able to withstand a drawdown (fancy term for account losses). This is so that you can formulate a strategy based on your psychological impulses towards the market, and isolating trades and patterns that can be used as an EDGE. This will take both time and money, unless you find out you are the 0.001%, then that’s fantastic. The rest of us will have to figure out the hard way.

Even though this may be a wake up call to all who wish to become profitable traders, I do think that anyone can reach the point of profitability. I will do my best to share important information with all of you so that you can formulate solid foundations. If you haven’t already check out my article about building a trading plan and strategy https://thefreedomgrind.blog/2020/02/10/building-a-trading-plan/

As always happy Trading, I hope you all have a profitable week. I would also like to thank you for the support of this Blog.

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