Are You Afraid of Losing Money with Your Trading?
In This Video:
01:29 Control always Overpowers Risks
03:25 What happens when People Understand this?
Are you afraid of losing money with your trading? If that sounds like you, listen up ‘cause I’ve got some great tips and help for you.
Hi Forex traders, it’s Andrew Mitchem here and I’m the Forex Trading Coach and I wanted to share with you some information about a survey that I held over the last couple of weeks on my website. You see, I asked people:
- What their biggest challenge was!
- What was their biggest concern with their trading?
- What’s holding them back with their trading
And I had some answers such as, a lack of understanding of the market, a lack of strategy; a number of people commented on – they were a little bit fearful of their broker – which broker to go for, what’s the broker going to steal from them, etc., and could they get their money back. But, without a doubt, the biggest reply in terms of number of replies was people were fearful of losing money from their trading.
And so what that does is it tells me a number of things – if you’re fearful of trading, there’s something wrong, isn’t there? You know there’s something that stopping you progressing from either a demo to a live or from a live to a bigger live-account. Whatever it might be but there’s definitely something wrong there for so many people to be fearful of trading.
And it tells me that most people out there don’t really have a strategy. They probably don’t have confidence in the way that they are trading. And so there’s other answers regarding lack of a strategy, etc, all come into play with the overall factor of the fear of losing money.
Control always Overpowers Risks
You see if you really don’t have a strategy, then you really are sort of guessing and gambling with your trading and I can see fully how people can have that fear of losing money. You see there’s so many people out there who hear horror stories, and you read or hear of other people who’ve lost huge amounts of money through trading. And it does put fear in so many people because obviously, you know, you just don’t want to be the next one.
But, more so than that, it tells me that a lot of people have a lack of understanding of money management!
You see, if you have controlled risk, then it allows you to take trades with more confidence. If you have a strategy you understand, it allows you to take trades with more confidence. You see really, and realistically, losing money and losing trades is a part of every trader’s day and week. You know, no one has a 100% win rate with trading – it just doesn’t happen – it’s not possible!
So, you have to accept that losing trades are just part of every day trading. But having controlled risk is a huge difference. You see, I know that when I place a trade, doesn’t matter what the currency pair, what the time frame, what the type of trade is, I know the very most I can lose on that trade is, in my example, half of one percent (0.5%) of my trading account.
So, what that does is it gives me confidence to place that trade because I know the very worst that I can do from that trade. You know I can’t lose 5% from that trade or 10% or half my account – whatever it is that other people are having the fear about. So it’s just impossible to do that because half of one percent (0.5%) is the very maximum, the very most that I ever risk on any one trade.
So, understanding money management, forgetting about pips, controlling your risks – that’s all part of overcoming that fear of losing money!
What happens when People Understand this?
And so, the opposite of that is when you have knowledge and education. And just a great example, just last night, I held another two-hour live trading room session for our webinar for my clients. And I had clients on there – one person had made 8% this week, in the first four days of the week; another had made over six percent; there were some at 3%; a couple at 2% for the week, and just people just typing in saying “I’m making good returns”, “making good money”. The week’s been very good of course with lots of strength in the Euro (EUR) and also some strength in the British Pound (GBP) – a weakness in the US (USD), a weakness in the Yen (JPY).
So, it has been quite a good, strong, trending week, which makes returns quite easily achievable. You know, 8% in a week, for a client, in just four days, in this week alone, just shows what can be achieved! So, you can see that once they have knowledge and education and controlled their risk, that fear of losing money almost disappears because you have everything under control and you know what you’re doing.
So, if you’d like to know more about that, just have a look through my website TheForexTradingCoach.com; send me an email – [email protected], and if you have any questions that you’d like me to talk about on future weekly videos and podcasts, just send that email through to me and I’ll do my best to answer it for you.
So hope you have a great week next week and look forward to talking to you this time, next week!