I have a friend who was a famous pit trader back in the late 80s and 90s.
A proper old-school London-based trader, who lived and died by each trading day.
He made huge amounts of money and at times, lost huge amounts of money
And as he says... "I managed to make it out alive!"
Some of the stories and exploits about those days are let's just say, never dull!
But not the ones to share here!
Now with his own trading, he takes a much more measured approach.
However, he has one phrase he has said to me directly and I often hear him saying it to other people over and over again….
"Trading is the hardest game in town!"
And he doesn't just mean old-school pit trading. That can be hedge fund trading as well as retail trading.
So what can you take from a simple but very important phrase?
You could take it to mean "Trading is going to be too difficult for me and I won't be able to make it."
Or...
What I would take from it are these TWO things...
1- It is possible to become a successful trader.
2- But the journey to get there won't be easy - despite what so many so-called educators out there imply.
So my TWO questions to you are…
1- What key strategies, learnings and feedback mechanisms are you going to take with you on that journey?
2- Who are you going to have with you on that journey that going to help you get there?
Until next time
Trade Safe
Alright… Not one of the most exciting subjects we have ever covered, but definitely one of the MOST important.
Risk management is something so many traders “think” they have locked down, but actually what they are doing is taking themselves down a road of no return.
Both for them and their account balance.
And what’s worse…
There is a group that simply overlooks risk altogether, or takes some one-time advice that is usually completely inappropriate for them and the way they trade!
So how do you make sure you not only know what to do when it comes to risk management, but you ACTUALLY do it?
First Off…Know Your Numbers
Yes, it’s a small bit of maths, but knowing the simple multiples can save your account balance!
Let’s say you are risking 10% of your cash pot per trade.
But that only requires a 5 trade-losing run to be the best part of 50% down overall.
Oh well, I still have half my money.
Hang on!
You now need a 100% return on that balance JUST to get back to where you were 5 short trades ago.
Let that sink in for a second…
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