Do You Need To Trade More Capital?

Do You Need To Trade More Capital

I don’t know about you, but I started trading Forex with $100. Now let’s be honest that is not a lot of money to begin your trading journey.

Participating with $100 will not cause a single dent in the market! Please understand the ONLY reason I started with $100 is that it is all I had at the time, and to be honest, I was eager to trade Forex and experience all there was to experience!

Now, are there things I would change about the way I went about learning? Maybe, but I’m leaning more to an emphatic NO! Why? Because I believe I would not be where I am today without the experiences, my journey was strictly for me. We don’t go through the same things!

But back to the point of this article…

CAPITAL!

There is no problem with starting with a little bit of money and growing the account, and hopefully, find yourself in a place where you can get funding from a prop firm or an accelerated program like the one AstroFX offers.

I want to focus on the psychology of starting with modest amounts of money.

There are benefits to starting with a small account, but there is also a significant DISADVANTAGE! Now it is entirely up to you whether you want to experience the disadvantage or not.

Psychological disadvantage of small accounts

The disadvantage was I wanted to trade significant amounts of money. This lead to risking more than I should and over-leveraging my accounts in a matter of minutes trying to “capitalize on all the POTENTIAL moves”! Looking back now, that was a lot of nonsense.

But, this wasn’t the biggest stumbling block for me. The biggest stumbling block was growth in surpassing specific barriers. We understand that we have different kinds of obstacles to what you can make in the market and what you can lose in the market, dependent on the parameters.

However, I did not know there was a mental barrier to CAPITAL!! Like seriously! Really? Is capital the only thing that could be stopping or stunting your growth and exposure to new heights?? MAYBE.

How?

I will tell you how it happened for me. When I got to a certain level in my trading where I could make money consistently, there was a threshold I could not surpass, no matter what I tried.

For example, let’s say I had no problem growing a $100 account to $2000. From this point on, I would lose a bit and come back to the $2000 mark, and my mental barrier was $2000! And even if I surpassed that $2000 mark by $500, I would find myself back at the $2000 spot.

It was utterly frustrating, and I honestly didn’t know what to do for the longest time. For many Forex traders, there will come the point where you will experience this mental barrier and how you decide to deal with this barrier will determine your success over the following year, a decade, and if you are around for that long, maybe even over half a century.

The psychological barrier is not one that has to do with equity, in my opinion, or its not all dependent on that.

The one case where it is dependent on that is when you get too excited and start making an unwise decision about which battles you want your soldiers (capital) to fight, and more importantly, win.

The psychological barrier has more to do with your views of money and what it means to you. I say this because when you can answer that for yourself, you will realize either it scares you, you are neutral to the amount, or you love it, and it has a positive impact on you.

In my opinion, neutrality is best. There are no emotions that could sway your decision-making process in the Forex markets when you are neutral.

How To Win The Battle?

Focus on your views of money. Adapt your thinking towards money and the amounts you may see. You do this is by ensuring that you remain neutral and understand it is possible to make it in the Forex market.

Do not let greed or excitement get the better of you, and as weird as it may sound, always remember the market can take it all away as quickly as you got it or quicker.

Another way to win the battle is to remember why you started and remain centered on the why. It is still possible to overcome all the psychological barriers one may face, as long as you focus on staying neutral.

Happy trading.

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Emmanuel Maphosa

Emmanuel Maphosa

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