What is Scared Trading Money?
You have for sure came across the disclaimer that most brokers have at the end of their brokerage website saying “Risk warning: Trading Derivates carries a high level of risk to your capital and you should only trade with money you can afford to lose…” which you probably never read to completion. This is basically a wakeup call about scared money trading. It never ends well.
Scared money –refers to trading with money that you cannot afford to loose. This type of trading style has consistently without doubt been the failure path for most beginners in this line of business. Trying your luck with rent money, your budget for grocery or any capital necessary to pay for basic needs is a big drawdown on your balance before you even start trading the same capital. Unfortunately, many Forex traders start their journey this way and fail right away.
To make matters worse, brokers are now accepting accounts to be funded with credit cards, more debt. Trading this type of capital has a huge emotional roller-coaster upon the trader, emotions will be attached to the trades taken for sure. Add to that, revenge trading that will follow after you have lost some of it luckily if you have not all blown up the account.
Here are some signs you are trading scared money:
This a general quality everyone needs to have. However, it is very important when it comes to trading, because you need as much of it to press that sell or buy when favourable setup present. DO NOT be trapped into having over confidence because and risking a lot because the market nature is that anything can happen which is why risk management is important.
Trading proprietary trading firms capital has been proven to advance a lot of traders journey and help them build confidence while growing in the markets. If you setups present themselves and instead taking them or waiting to late to take them, second guessing yourself at the moment, you probably trading scared money and are having confidence issues.
It is true what the billionaire Charlie Munger says about big money that is made while waiting. This is because good opportunities do present themselves often in the markets. Now imagine you wait for a good opportunity to present but you miss because you could not find the courage to take the trade.
Courage in this case it is lost because you trade capital that you scared to lose so when the opportunity finally came you looked for other reasons to not execute and risk your scared capital. Trading should be comfortable and neutral if you follow your rules and your mindset is at ease with the money you are risking.
Its true that the most successful traders are successful because they have mastered their emotions and psychology. You need to de-attach yourself from the money and leave out emotions out the trades you take. If you trade with these qualities, you most likely will make errors on your rules, cut winners earlier and losses too late. It is just as is in life with decisions taken with emotions, they end up hurting you back.
Trading proprietary capital has been proven to help traders learn the skill to de-attach themselves from them money while adhering to the rules. Our main aim which is a solution, is to help ease the growth of traders by proving them capital, ensuring they follow their trading rules while emotionally de-attached from the trading process so as to make objective decisions as the markets provides them with opportunities.