I want to discuss percentage gains (and losses) traders broadcast on social media and within Facebook groups.

Retail traders push to gain 4% or more each week and see themselves in the window of success. Yet professional traders believe 1% or 2% gain per week is massive.

This overconfidence and pushing towards big gains is dangerous.  I warn about this in my E-Book,  control your account gains if you want to trade long term.

Retail trader and professional trader

There are usually differences between both types of traders. The professional trader will use a much lower level of leverage and sometimes no leverage at all, meanwhile the retail traders have a much smaller size account to trade from, and use leverage to bloat gains.

Most retail traders will counter saying, “How else can I make money unless I use leverage?” That’s a valid question; however, first thing to remember is that to play, you must stay in the game!

Most retail traders will blow up their trading account for these two reasons.

• Abusing leverage
• Average down the loss

Most traders will slip up and do both simultaneously.

Becoming conditioned to the gains

In our society we become conditioned to all circumstances; trading is no different. A trader on a good winning streak can easily add 1% or more to their trading account each day by using leverage and averaging down. The situation can even be positive to your energy system as you believe that price will at some point return to your break-even level.

It is at this point that you have lost almost any control over your trading mind; you are no longer doing your trading, and your inner demons now possess your thoughts and decision-making.

When you make 10% - 15% etc. per month, it’s only a matter of time before you wish that you had scaled back the amount of trades and the leverage that you have been abusing.

Old-fashioned word in trading? Discipline

We are riddled with greed. We move from buying one house to buying an investment property and so on. We seek better returns and become conditioned to wanting more and more.

In trading this plays out, but the effect is much quicker and with less warning.

To be disciplined means to be shy with your trade choice and to keep integrity within your position size. By combining both quality trade choice and integrity with position size you will not be tempted to grow your account at an unreasonable rate.

It is much better to develop the skills and mindset that trading will demand from you rather than building your account at a rapid rate for several months before it all caves in on you. When that happens, your mental integrity and your account will both need rebuilding.

Slow and very steady will win the race.

Think of what you could achieve over five years rather than what you want at the moment. Over time trading will almost become boring as you carefully select your trades and up hold your trading integrity.

If you are winning and adding over 3% to your trading account week, you must regroup now.

Professional traders believe 1% or 2% gain for the week is massive, professional traders are around much longer than the average retail trader. How do you want to mirror your trading towards, the average (crashing) retail trader, or the professional trader?

Take this as a warning and protect yourself from greed and inner demons.

Trade well, Steve T.