This is the story of Johnson, a job seeker, who found some love for trading Indices in the financial market.
Johnson’s favorite index is Volatility 75 index, V75 one of the Indices that is readily available for trading to Retail traders.
Having opened a trading account successful, he decided to consult his friend that once tried to introduce him to trading in the past.
His friend’s name is Rufus.
However, Rufus, a somewhat successful V75 trader introduced Johnson to an easy strategy he can use to trade Volatility 75 index.
Three months later, Rufus received a call from Johnson.
“I blew it again, Bro!” Johnson spoke on the phone. He sounded depressed.
“How did it happen?” Rufus asked.
“I funded my account with $27, and grew the balance to $39. I became greedy along the line and increased my lot size”. Johnson narrated
“I can’t say this is what came over me. My balance increased to $41 before it dropped to $15 within a minute”.
“Rufus, I silently prayed within my heart for V75 price to turn up” Johnson muttered on the phone.
“But it was too late Bro. My account balance increased to $17 before finally reducing to zero balance”.
“Rufus, I just lost the 5th account in three months.”
“I need your advice Rufus, please help me” Johnson begged.
Rufus felt some pity for him and gave Johnson some words of encouragement.
“I normally tell new traders that, “whenever you blow your account, take the loss as school fees payment”.
The most important part of learning how to trade is to ensure that you learn a lesson and try not to repeat the same mistake again.
Else, you will promptly make another school fees payment, again and again and again, until you finally learn a lesson.
If you successfully pass a class, you get to graduate and move to the next class or level”
The Levels in the school of trading are as follows;
1. School of Learning a Trading Strategy, and sticking to that Strategy that works for you.
2. Class of Having a Trading plan.
3. School of Application of Risk Management in your trading.
4. Class of Time Management.
5. School of Application of Money Management.
6. Class of Overcoming One’s Emotions, (Greed, Fear, Indecision)
7. School of Identifying the Right Asset/Pair/Index that fits Your personality, and lastly,
8. Class of Realization of the Fact that the Financial Market (Trading) is not going away.
Consistent small gains over a long period of time (whether compounded or flat) will turn to a huge profit after some months”.