I Almost Blew A $50,000 Trading Account!!!
Many traders in the world receive vast amounts of money from friends and family to trade for them and bring those gains that surpass the industry norm, whether in comparison to the stock markets, real estate market, or even the commodities market. Often our friends and family trust us with this money either because we possess the skill to trade the account or we’ve made them believe that we do. I almost blew a $50,000 trading account myself.
Now you’re probably thinking, “Man, there is so much I could have done with that money,” and this true! You probably could have bought yourself a nice car and put a down payment on a home; I know you could buy a home in South Africa.
This $50,000 trading account was essential; I needed to build this account. I believe the reasons I almost blew it were money management and psychological pressures.
This article will address the psychological forces that I faced and how I have learned to deal with them because I believe these psychological pressures are REOCCURING and CONSTANT!
Psychology is an exciting aspect of the trading journey because I utterly believe that there is no way to level up in your trading journey or consistently build your trading account without your psychology being tested and improved over time. You are bound to evolve into a different person as you improve and grow in this Forex industry.
For a moment, let us look at some of the psychological thrills I experienced in a rush to build this trading account. We must realize that the Forex market is a zero-sum game!
There will be a winner, and there will be a loser in the market. There is no middle ground between traders in the market. None whatsoever.
I will be honest, early in my journey, it was such a thrill seeing hundreds of dollars in floating profit because it always feels good to be correct, and make lots of money. Man, it is good!
However, your psychological toughness comes into play here. You have decisions you are required to make in this instance, as much as you’d be required to make decisions when losing money. You need to be objective in managing your trades in the Forex markets, which means not thinking about the money!
It would help if you were not thinking about “your potential take profit.” Is this extremely difficult to do? Most definitely! There is probably nothing more complicated in the Forex industry, in my experience. But, it is possible to do so! MANAGE YOUR EXPECTATIONS AND YOUR EMOTIONS!
The Effects Psychologically
It’s an interesting paradox to think about because, on the one hand, you feel this rush and thrill to enter trades so you can make money from the Forex market. On the other hand, your psychology shouldn’t be in that space when entering the market because your judgment is clouded, and you may never know when to stop.
You are bound to fall into a mental rut and continue spiraling for a while if you do not control yourself and manage your emotions.
Learn what your strengths and weaknesses are when it could to your psychology. Ask yourself;
- Do I get excited quickly?
- Do I risk all that I have made to make more?
- Why am I fixated on the money?
- How can I improve my psychology in the Forex markets?
Also, the trading account I almost blew? Thankfully, it was a demo account.
Happy trading, fellow traders!