PROFIT! How to get past your lizard brain and make money!
There have been quite few books written about this, and mainly, they deal with how to avoid being defeated by your own fear and greed. Fair enough, and this article does NOT replace them.
The books are best suited to those who have traded for a while, and need to improve their performance. If you are a beginner, you won't know the first thing about the various emotions that grip you when you are trading, so reading about them at this stage is futile.
However, there is a way to immediately benefit from one simple thing you can do.
See my profile for reasons.., everyone should use a dummy account at first, but it's very hard to know when to switch to real money. For a start, the emotions are really not there at all when it isn't real cash you are risking. It's almost a game, because it doesn't matter if you win or lose.
Many new traders will switch after some decent results over a month or so. I'd recommend 3 months minimum before risking real money, but whatever. Doing what I suggest below is really good advice anyway.
Once they switch to a real money account, they find it is a lot harder, and they start taking losses of hundreds or thousands of dollars, and at that point they either blow up, trying to trade it all back, or give up (possibly the right option!). Maybe you have done this already?
This is because they are risking their own money. A typical account is $5,000-$10,000, and as I have mentioned many many times, 90% of new traders will lose 90% of their account in the first 90 days. Again, see my profile for a guide to how to avoid this.
HERE'S THE REALLY GOOD ADVICE RIGHT HERE:
You may have heard of Prop Firms before. One hit the headlines recently and not for the right reasons. PSA: These firms are not generally regulated, BUT read on. This article is not about how to make millions from prop trading. It's about conquering your ability to naturally lose money. Everybody is literally PROGRAMMED to lose. They have to deprogram themselves, and using a prop firm is the best way to do this.
Instead of putting $10,000 into a trading account and risking $100 at a time (a reasonably sensible course of action), only to find that after a month you are down $500-$1,000, and starting to worry that trading is not for you, pay $160 for a $10,000 prop account. Let me explain how this works. I will use an anonymous (but real) example. Shop around to see what suits you.
They give you a demo account with $10,000 in it. You have to make 10% ($1,000) to pass the first test, and your time is unlimited. If you lose $1,000 overall or lose $500 in one day, you lose your $160 and have to buy a new one. If you pass, you have a second test where you have to make 5% ($500). The rules for losing are the same.
If you pass both tests you get a new $10,000 account and your $160 back. You then trade the new account, but they will pay you 80% of your profits. You have the same rules for losing, at which point your account is closed.
Q: WHY IS THIS USEFUL TO YOUR BEGINNER JOURNEY?
A: Because you are only risking $160. This sits in between a dummy account and a real one. It means something, but you can retain the ESSENTIAL mood of detachment that you need to carry on treating it as a game. If you are trading a real account, you could lose $500 in 5 trades at some stage (statistics say it is inevitable over time), and that is something a professional can shrug off, because they have confidence and they know it's part of the game, but you can't when you are starting out. You need to build your confidence, and this is the best way to do that. Losing $500 in 5 trades is OK with the prop account, as long as you don't do it one day!
Your $160 will last a while, even if you are having a bad time. In that time, you will learn a LOT. If you lose, it's only another $160 to try again with all the knowledge you have learned. If you win, you are trading with free money as you have your $160 refunded. Don't go mad.
If you like this, please take the trouble to hit the like button.
The books are best suited to those who have traded for a while, and need to improve their performance. If you are a beginner, you won't know the first thing about the various emotions that grip you when you are trading, so reading about them at this stage is futile.
However, there is a way to immediately benefit from one simple thing you can do.
See my profile for reasons.., everyone should use a dummy account at first, but it's very hard to know when to switch to real money. For a start, the emotions are really not there at all when it isn't real cash you are risking. It's almost a game, because it doesn't matter if you win or lose.
Many new traders will switch after some decent results over a month or so. I'd recommend 3 months minimum before risking real money, but whatever. Doing what I suggest below is really good advice anyway.
Once they switch to a real money account, they find it is a lot harder, and they start taking losses of hundreds or thousands of dollars, and at that point they either blow up, trying to trade it all back, or give up (possibly the right option!). Maybe you have done this already?
This is because they are risking their own money. A typical account is $5,000-$10,000, and as I have mentioned many many times, 90% of new traders will lose 90% of their account in the first 90 days. Again, see my profile for a guide to how to avoid this.
HERE'S THE REALLY GOOD ADVICE RIGHT HERE:
You may have heard of Prop Firms before. One hit the headlines recently and not for the right reasons. PSA: These firms are not generally regulated, BUT read on. This article is not about how to make millions from prop trading. It's about conquering your ability to naturally lose money. Everybody is literally PROGRAMMED to lose. They have to deprogram themselves, and using a prop firm is the best way to do this.
Instead of putting $10,000 into a trading account and risking $100 at a time (a reasonably sensible course of action), only to find that after a month you are down $500-$1,000, and starting to worry that trading is not for you, pay $160 for a $10,000 prop account. Let me explain how this works. I will use an anonymous (but real) example. Shop around to see what suits you.
They give you a demo account with $10,000 in it. You have to make 10% ($1,000) to pass the first test, and your time is unlimited. If you lose $1,000 overall or lose $500 in one day, you lose your $160 and have to buy a new one. If you pass, you have a second test where you have to make 5% ($500). The rules for losing are the same.
If you pass both tests you get a new $10,000 account and your $160 back. You then trade the new account, but they will pay you 80% of your profits. You have the same rules for losing, at which point your account is closed.
Q: WHY IS THIS USEFUL TO YOUR BEGINNER JOURNEY?
A: Because you are only risking $160. This sits in between a dummy account and a real one. It means something, but you can retain the ESSENTIAL mood of detachment that you need to carry on treating it as a game. If you are trading a real account, you could lose $500 in 5 trades at some stage (statistics say it is inevitable over time), and that is something a professional can shrug off, because they have confidence and they know it's part of the game, but you can't when you are starting out. You need to build your confidence, and this is the best way to do that. Losing $500 in 5 trades is OK with the prop account, as long as you don't do it one day!
Your $160 will last a while, even if you are having a bad time. In that time, you will learn a LOT. If you lose, it's only another $160 to try again with all the knowledge you have learned. If you win, you are trading with free money as you have your $160 refunded. Don't go mad.
If you like this, please take the trouble to hit the like button.
eBook ON SURVIVAL: amazon.co.uk/dp/B0BSY763W3
THE CITY TRADERS: thecitytraders.com/?aff=9
Discord: discord.gg/Ma7SnExcWA
THE CITY TRADERS: thecitytraders.com/?aff=9
Discord: discord.gg/Ma7SnExcWA
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