Trading Is A Percentage Game
Risk Management. The forsaken element of trading any market, particularly the Forex market, especially when greed takes over and you expect to make it in the industry within your first few months.
Remember when you started your Forex trading journey, and you thought it would be a walk in the park? Or maybe that is where you are right now, and you honestly believe that it will come easy. I’m here to let you know that isn’t the truth, though you can make it when you pay attention to risk management!
When I started trading, I was definitely in it for the money and the pleasant life, but the main issue is I wanted to succeed quickly. I was looking at the money and didn’t focus on anything but winning or losing dollars.
But then I lost a bit, and I realized it is more about the percentages than it is about money. It’s about making good trades and progress made over a period of time.
Pros of thinking in percentages as a trader
Now, what does playing the percentages game do for a Forex trader?
1. You can see the bigger picture.
This is because you see the progress over time and you learn to appreciate the growth.
2. You notice the difference between what you’ve risked and what you’ve made.
For a Forex trader, this means that you know when you’ve risked too much. In addition, you understand the numbers and what your equity curve may look like if you continue risking what you’ve been risking.
3. Profitability factor.
When you play the percentages game, you learn what each trade is worth and whether or not you should enter specific traders or not. With this perspective, you also realize the depth of your skillset. If you are able to make 15% each month on a $100 account, you could do the same on a $10,000 account if your psychology and risk management remain aligned.
4. A change in focus.
You are now able to focus more on the charts instead of money. I believe this because you look for quality over quantity in your trading charts, which equals greater profitability in the long run.
So before you think Forex trading is just about making money, learn and focus on making percentage progress because it won’t affect your mindset like money could.
Enjoy the percentages Traders!