The Forex Trading Greed DEMON!
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
Professional traders see 1% - 2% as a solid success!
Retail traders scoff at this, arguing this is insignificant. Yet professional traders are around a long time while retail traders drop as flies. Do you wonder why? It's called leverage.
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;
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
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
In trading this plays out, but the effect is much quicker and with less warning.
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
Take this as a warning and protect yourself from greed and inner demons.
Trade well, Steve T.
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