It's a numbers game
I see this more and more, especially in the crypto space. There are some wild stories out there from turning 8k to a billion through to a Pizza for 10,000 Bitcoin.
Here are some home truths. Although most of you won't want to hear this.
You see, as a professional trader - there is 1 key factor, almost a scale balancing between too much and just enough. Everyone pushes for more returns, we are only human after all. We have had stories of Wall Street Titans and Vegas big wins, but there is some simple logic to this.
You might have entered the market after Covid hit the world and wanted an extra income, might have seen a way to make millions from the money the government sent you? The issue is this is no different that rolling a dice in Vegas but without the fun! You possibly saw some influencer selling you the dream - they fail to tell you, they trade on demo accounts and make their income from affiliate links and social media watch time!
When you think of investors like Warren Buffet, you have to understand - he didn't watch an influencer video and say to himself "I want to be like that guy" - investing is often a long term thing and not a get rich quick scheme.
Here's a few examples to hit home.
This is boring, not worth it - so instead you seek higher returns, that opens up the possibility of falling into scams, listening to the wrong crowd and having dreams. To be honest, it's probably more enjoyable spending a day at the races.
With a smaller account, you can grow it a little, add to it on the next pay day and of course compound the investments.
As you move up the scale.
This is probably where most "semi serious" market goers start. It's often a flurry into the market cash in hand. The assumption often the same; you have done well to amass a lumpy investment, your clearly good at the field you have been in to earn your pot. Why wouldn't you be a good trader? After all, these kid influencers are making millions on their demo accounts.
Jump to the next level...
Your either a captain of industry, you have had your own business or you have a kind daddy.
How you got here is not important, staying here is.
When you trade with a medium sized account you start to think a little different. Instead of looking for 900x returns, you start thinking about investments that are a little less risky. This is the scales I mentioned earlier. You are now in the space of a good return might be good enough. Too high of a risk, means you are thinking of safe guarding your cash.
Here's where the Professionals play the game differently. Trying to make 1-5% is a lot more sustainable than trying to land a 900x return.
You have to remember 90% of traders lose 90% of their accounts in 90 days...
This can easily be attributed to things like;
As a professional - you can seek smaller returns, spend less time in front of the charts and let your money work for you, instead of you doing all the chasing!
As the amount of capital rises, so does your desire for risk. You might still have the appetite for returns but not at the cost of risk.
As a professional trader, you can afford the luxury of trading a bias and scaling into a trade - you will find fund managers who have what's known as secondary investment capital (in essence to add to winning positions).
So although this is not going to be what you want to hear, it's what you need to know.
There's always chasing the dream, but why not wake up and make it a reality?
Enjoy the weekend all!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Here are some home truths. Although most of you won't want to hear this.
You see, as a professional trader - there is 1 key factor, almost a scale balancing between too much and just enough. Everyone pushes for more returns, we are only human after all. We have had stories of Wall Street Titans and Vegas big wins, but there is some simple logic to this.
You might have entered the market after Covid hit the world and wanted an extra income, might have seen a way to make millions from the money the government sent you? The issue is this is no different that rolling a dice in Vegas but without the fun! You possibly saw some influencer selling you the dream - they fail to tell you, they trade on demo accounts and make their income from affiliate links and social media watch time!
When you think of investors like Warren Buffet, you have to understand - he didn't watch an influencer video and say to himself "I want to be like that guy" - investing is often a long term thing and not a get rich quick scheme.
Here's a few examples to hit home.
This is boring, not worth it - so instead you seek higher returns, that opens up the possibility of falling into scams, listening to the wrong crowd and having dreams. To be honest, it's probably more enjoyable spending a day at the races.
With a smaller account, you can grow it a little, add to it on the next pay day and of course compound the investments.
As you move up the scale.
This is probably where most "semi serious" market goers start. It's often a flurry into the market cash in hand. The assumption often the same; you have done well to amass a lumpy investment, your clearly good at the field you have been in to earn your pot. Why wouldn't you be a good trader? After all, these kid influencers are making millions on their demo accounts.
Jump to the next level...
Your either a captain of industry, you have had your own business or you have a kind daddy.
How you got here is not important, staying here is.
When you trade with a medium sized account you start to think a little different. Instead of looking for 900x returns, you start thinking about investments that are a little less risky. This is the scales I mentioned earlier. You are now in the space of a good return might be good enough. Too high of a risk, means you are thinking of safe guarding your cash.
Here's where the Professionals play the game differently. Trying to make 1-5% is a lot more sustainable than trying to land a 900x return.
You have to remember 90% of traders lose 90% of their accounts in 90 days...
This can easily be attributed to things like;
- Buying signals
- Following influencers
- Over trading
- Trading too small a timeframe
- Trying to find a silver bullet
As a professional - you can seek smaller returns, spend less time in front of the charts and let your money work for you, instead of you doing all the chasing!
As the amount of capital rises, so does your desire for risk. You might still have the appetite for returns but not at the cost of risk.
As a professional trader, you can afford the luxury of trading a bias and scaling into a trade - you will find fund managers who have what's known as secondary investment capital (in essence to add to winning positions).
So although this is not going to be what you want to hear, it's what you need to know.
There's always chasing the dream, but why not wake up and make it a reality?
Enjoy the weekend all!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
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Disclaimer
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