The real reason you’re missing trading opportunities

Opportunity can feel scary. It represents the unknown and requires us to step off the diving board and out of our comfort zones.

These days my trading methods are so established, that I almost don’t have to think about it when I get a trading signal. But even now, there’s a little ‘hit the button’ moment, when I can feel that I’m stepping into the unknown.

Natural caution is not a bad thing

But sometimes that caution means that we miss out on opportunities altogether.

Most of us can see the obvious benefits of making money from the markets, and I’m sure we can all think of things to spend that money on.

Yet, most people sit on the sidelines and never take the plunge.

And we can come up with many good reasons for not getting into the markets. Sound, sensible reasons … like fear of losing money … not having enough capital to get started … not enough time … not enough know-how.

So, let’s look at these more closely …

Fear of failure

I can often be heard lecturing my children about not giving in to a fear of failure – they have to give things a try. But, often in the same breath, I’ll be pointing out potential hazards to them.

The reality is that a rational fear of failure keeps us safe.

A fear of losing money when trading is a very sensible fear to have. But it should be put into perspective.

Even the most successful trades will never be far away from failures – profit curves never run in a straight line, so there will always be losses along the way. But by rationalizing our fears we can take control of them and use them to manage our behaviour (and our risks), rather than letting those fears manage us – and stand in the way of our goals.

To manage our fear of losing money, we should consider the worst-case scenario. What would you do if you suffered a serious losing run? How would you limit your losses? And how do those potential risks compare with the potential rewards you could get?

Generally, when we look at our fears head-on, they’re a lot less scary that when we keep them in the shadows.

A successful approach to the markets is about having a positive outlook, but one that’s rational and realistic. And that realism comes from having a hard look at what you can afford, and what you can achieve …

Lack of funds

Another common reason for not taking the plunge into the markets is a lack of capital.

The ‘perceived wisdom’ used to be that you needed at least £1,000 to invest.

These days you could easily spend many multiples of that on a piece of trading software … and factor into that some hefty margin requirements, and trading is looking more expensive than ever.

So, on the face of it, a lack of funds sounds like a very sensible reason to not get involved.

If you’ve not got much spare cash, perhaps you should give up on the idea of trading? Perhaps you should just accept your financial situation for what it is?

But I’d like to flip that on its head. You can do this with SIGNIFICANTLY less money.

It’s easy to feel powerless when we’re just getting by. It’s exactly this feeling that stops most of us from making changes in our lives, whether it’s setting up your own business … changing career … or starting trading …

Feeling financially powerless is a trap that we can easily get stuck in – and it makes us want to blame others for our lack of fortune. I’m not trying to lecture you here – In the past, I’ve been stuck in this trap myself. I’m sure we can all recognize some feelings of resentment towards others for their good fortune. However, if we stop looking at others and comparing ourselves to them – we can begin to win that power back.

The truth is, that the size of your trading fund may be a measure of your wealth … but it isn’t the measure of your financial power. Financial power is about a mindset that isn’t knocked back by failures or by the sometimes overwhelming feeling of having to start at the bottom.

It’s where most people have started out

To be honest, the traders that give me the heebie jeebies are the ones who say that’ve got £25k to invest and are considering ‘dabbling’ in the markets.

You don’t want to LEARN with £25k. You want to learn with a bit of money and build on that. Sure, when you’re confident, you can add in more funds. But I’d always recommend that people start small.

You can even start out with as little as £200, if you choose your methods carefully. But that should be £200 you can afford to lose – we should never trade with money we can’t afford to lose, whether it’s £200 or £25,000!

Of course, part of being rational and realistic is recognising what you can achieve with a small fund.

If you’ve only got £200 to invest … you can’t expect to have made £5k by Christmas. And, the profits you make on trades may seem pretty meagre – you’re not going to be raking in hundreds of pounds on individual trades while your fund is that small – you’re more likely to be counting your profits in the tens of pounds.

And while taking those tiny first steps, we need to close our ears to the ‘Why bother’ brigade – who tell us that there’s no point in trying. Because, as traders, we know there’s a different route to take, and we know that with some dogged persistence, we can make radical changes to our financial futures.

And the good news is that you don’t have to do it on your own. The Traders Bulletin website and weekly updates are filled with great trading ideas (that are completely free!) Plus, you’ll find my pick of the trading strategies HERE (one of which would have made you 24% this month already!)

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