A few weeks ago I shared about how I accidentally stumbled on Forex and made a career out of it. To read that blog post, you can go HERE.
Yesterday, (<-- Click this link to read yesterday's story) I shared about how important it was to maintain a healthy trading capital by managing your risk.
Today I want to share something which I learnt a few years back, trading with a Millionaire Mindset.
Most people get into trading and investment because they want to :-
Make a side income
Quit their job
Dream of becoming a millionaire
A trader typically starts off with less than $10,000 and will always try to make huge winning trades to make a big profit. This group of traders will always be finding ways to double their accounts in the shortest period of time, like 100% a month or even within a week. This is because in order to make a million, they would need to generate 10,000% ROI!
Another trader who starts off with a larger account of $100,000 would have a different mentality as he would be targeting to make a few percent a month and that would be very good gains.
While it is easier to make smaller gains, most traders with small accounts continue to shoot for large unrealistic targets and often end up blowing their accounts. They would then look for ways to fund their next live account and this process would repeat again. After they have blown a few trading accounts, they would have lost quite a big amount of money which they could have just combined into 1 big account in the first place if they had changed their mindset from the majority of traders out there.
Majority of Forex traders fail to realise that every dollar they profit is just as valuable and a step closer towards achieving their trading goals. Instead of trying to make large trades that can involve risking our whole capital in 1 trade, we need to tweak our mindset and start treating our account as a large trading account.
It is good to have the habit of asking yourself a very question before each trade, "Would I enter this trade if I had a much larger account?"
Very often, a trader takes a trade because he has a small account and he thinks his risk is small because the capital is not much. You need to start looking at your trades and ask yourself, "Am I still going to enter this trade if I had a million dollar account?"
Another reason why this is very important is because if you want to become a consistently profitable trader or a full time trader, the amount of money in your account is NOT IMPORTANT. The trades you take and the good habits you start to develop are much more important when this process becomes repetitive and second-nature to you.
At the end of the day, you want to look at how many pips you are making rather than the dollar value. Making 50 pips on a $100 account or a 100,000 account is the same. It requires the same analysis, the same amount of time and the same trade to achieve. The only difference that affects a trader is the dollar value. Once you are able to get over this hurdle and aim to make a consistent percentage gain of your account, be it per week or per month or per quarter or per annum, you will be on your way to becoming a Millionaire Forex Trader.
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Hope you enjoy today's blog post and if you have any questions please feel free to ask in the comments below and I will definitely respond to you.
Daily Forex is my way of sharing my personal thoughts on the Forex Industry with would-be traders as well as current traders.
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Here are some interesting topics to start you off :
- Daily Forex #52 - The Day I Made £3,000 In 2 hours!
- Daily Forex #20 - Can You Really Make Money Trading Forex?
- Daily Forex #13 - Make Your First $100,000 Trading Forex
- Daily Forex #50 - I Got CHEATED By My Broker Part 1
- Daily Forex #9 - 2 Main Reasons Traders Fail
- Daily Forex #45 - Generating A Basic Salary From Forex Every Month!
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