This is Why Beginner Traders Lose Their Capital – 3.Trade Volume
Hello friends! Thank you for your support in my previous post! It was not as popular as the first one but I could see from the comments that many of you found it interesting. Your feedback by comments and likes show me that some of you are learning and that is motivating for me to write more!
This time I want to address another mistake I see the ones who just enter the market do a lot: Placing a too large volume out of their capital in a trade. So what will I talk about today?
Why do beginners trade with large volumes?
Why is that bad, what mistake does it lead to?
How much is a too large volume for a trade? What is the appropriate volume for a trade?
What should you do now that you traded too much volume and lost too much?
Why do beginners trade with large volumes?
If you are a beginner there are several reasons why you are trading a too big part of your capital. I have analyzed the questions I get and I can see that many in the beginning think that you can do a lot of money in crypto very fast and they are in a hurry to do so. Other reasons are: you are in a hurry to get back some money you already lost, or you are trying to reach a financial goal very fast (like covering a debt, buying something very expensive) and you think this is the winning ticket. Obviously, it’s not so easy, and once you start losing, the pressure and no patience spiral just keeps accelerating you pushing you in the wrong direction.
Why is trading with high volume bad, what mistake does it lead to?
When you trade in crypto markets you are trading in one of the highest risk market. You can have luck and get 5 high volume good trades, but then the 6th one can ruin you. If you need a reminder please look at the BTCUSD chart from November to April. Who entered at over 10k, was woken up to a sad reality when BTC got to be 6k. High volume only amplifies your risk, and that’s not trading, that’s gambling against pros.
The first mistake that high volume trades bring is amplifying your emotions. You know how everyone talks about leaving your emotions out of trading? That will be impossible once 25% of a lost trade actually means 25% of your whole capital if you go all in – NEVER GO ALL IN! You will be run down by emotions and you won’t be able to take any logical decision or follow your initial plan, if you had one.
The other general mistake is that it’s really bad practice and trading high volumes of your capital has nothing to do with pro trading. Just with gambling. Let’s trade, not gamble.
How much is a too large volume for a trade? What is the appropriate volume for a trade?
In numbers: all in is a huge mistake. 50% is a huge mistake, 25% is a huge mistake for one trade. Do you get the picture? If you are a beginner and you don’t know what to do, before you get to learn proper money management please follow this very simple rule which will save you: make your trades small. Stupid small. So small that you will think you are not earning anything if you reach profit.
But why trade like that then, if it is not fun?
Well, I said it before – treat trading like a business not like a game. If you are going to trade small, in the beginning, until you learn, you will not only profit small, but you will also lose very little. If you lose very little – you will not have emotions anymore. Without emotions you will be able to analyze your trades, gain experience, make logical moves and follow plans. Then rinse and repeat 1000x times these small volumes. By slowing down, having patience, you will win this marathon.
What should you do now that you traded too much volume and lost too much?
This time I want to address another mistake I see the ones who just enter the market do a lot: Placing a too large volume out of their capital in a trade. So what will I talk about today?
Why do beginners trade with large volumes?
Why is that bad, what mistake does it lead to?
How much is a too large volume for a trade? What is the appropriate volume for a trade?
What should you do now that you traded too much volume and lost too much?
Why do beginners trade with large volumes?
If you are a beginner there are several reasons why you are trading a too big part of your capital. I have analyzed the questions I get and I can see that many in the beginning think that you can do a lot of money in crypto very fast and they are in a hurry to do so. Other reasons are: you are in a hurry to get back some money you already lost, or you are trying to reach a financial goal very fast (like covering a debt, buying something very expensive) and you think this is the winning ticket. Obviously, it’s not so easy, and once you start losing, the pressure and no patience spiral just keeps accelerating you pushing you in the wrong direction.
Why is trading with high volume bad, what mistake does it lead to?
When you trade in crypto markets you are trading in one of the highest risk market. You can have luck and get 5 high volume good trades, but then the 6th one can ruin you. If you need a reminder please look at the BTCUSD chart from November to April. Who entered at over 10k, was woken up to a sad reality when BTC got to be 6k. High volume only amplifies your risk, and that’s not trading, that’s gambling against pros.
The first mistake that high volume trades bring is amplifying your emotions. You know how everyone talks about leaving your emotions out of trading? That will be impossible once 25% of a lost trade actually means 25% of your whole capital if you go all in – NEVER GO ALL IN! You will be run down by emotions and you won’t be able to take any logical decision or follow your initial plan, if you had one.
The other general mistake is that it’s really bad practice and trading high volumes of your capital has nothing to do with pro trading. Just with gambling. Let’s trade, not gamble.
How much is a too large volume for a trade? What is the appropriate volume for a trade?
In numbers: all in is a huge mistake. 50% is a huge mistake, 25% is a huge mistake for one trade. Do you get the picture? If you are a beginner and you don’t know what to do, before you get to learn proper money management please follow this very simple rule which will save you: make your trades small. Stupid small. So small that you will think you are not earning anything if you reach profit.
But why trade like that then, if it is not fun?
Well, I said it before – treat trading like a business not like a game. If you are going to trade small, in the beginning, until you learn, you will not only profit small, but you will also lose very little. If you lose very little – you will not have emotions anymore. Without emotions you will be able to analyze your trades, gain experience, make logical moves and follow plans. Then rinse and repeat 1000x times these small volumes. By slowing down, having patience, you will win this marathon.
What should you do now that you traded too much volume and lost too much?
評論:
Key takeaways:
Trading with high volume will make you fear trades which seem to be at a loss and you will be vulnerable to close them without following a proper strategy or a plan. You will then have pressure to get what you lost back, enter another high volume trade and again close it at a loss. This will make you lose a lot very quickly.
Instead, make very small trades and remember you are a beginner – there is no shame to start small. Make your trades so small that you don’t care if it ends in a loss. Don’t put pressure on you to make a lot of fast money on something in something you don’t know or understand properly. Take the time to learn with small trades, and no fear of losing these small trades. The impact will be also small, and allow you to think clearly, plan, and follow your strategy consistently. Remember there are ALWAYS opportunities to make money by trading. Why hurry?
That is it! I hope you liked it. If you did, please press the like button so you let me know too that you enjoy this type of content! Or leave a comment, it will make things interesting for me too, and I will be motivated to write more! Thank you for your attention!
Trading with high volume will make you fear trades which seem to be at a loss and you will be vulnerable to close them without following a proper strategy or a plan. You will then have pressure to get what you lost back, enter another high volume trade and again close it at a loss. This will make you lose a lot very quickly.
Instead, make very small trades and remember you are a beginner – there is no shame to start small. Make your trades so small that you don’t care if it ends in a loss. Don’t put pressure on you to make a lot of fast money on something in something you don’t know or understand properly. Take the time to learn with small trades, and no fear of losing these small trades. The impact will be also small, and allow you to think clearly, plan, and follow your strategy consistently. Remember there are ALWAYS opportunities to make money by trading. Why hurry?
That is it! I hope you liked it. If you did, please press the like button so you let me know too that you enjoy this type of content! Or leave a comment, it will make things interesting for me too, and I will be motivated to write more! Thank you for your attention!
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No. Wrong thinking. Get some patience and remember time passes faster and faster as you grow older. Also, if you plan to get back the money you lost by doing the same thing that got you to lose them in the first place, please just start reading this lesson again. And if you get here and you still think you should trade high volume, please read it one more time.
Until you learn and until you are confident in your strategy and trading habits, don’t chase the money you lost. They are gone. I know it’s really hard, but try not to think about them as your goal to get back. Think that you spent them on an outstanding experience and now you don’t have them anymore. If you are going to chase them quickly, you will lose again.
Instead, think about your financial goal in a few years from now, when you will be a trader with strong knowledge and experience, who has been through both bull and bear markets and knows how to reach his or her target. If you are going to give it time, patience, learn to trade and be consistent, you will get your money back and surpass it and make profit. And you will have something to be proud of.