Have you ever wondered why starting small always work?
A question that every new trader has to answer before starting trading is how much capital should he/she starts with? Most of the new traders start enthusiastically, and try to put as much money they can afford and when things become a bit difficult they start to lose their capital, faith and patience and forget trading forever. The only best answer is to “Start with Minimum Capital” with which you can open a trading account with a broker. Due to lack of experience and knowledge in your initial trading days, more unavoidable trading mistakes will be there and the initial objective is to keep them small.
People unfamiliar with trading business or those who haven’t tested trading the real markets with real money has the dilemma that trading is as simple as just picking a stock, buying it lower, selling it at a higher price and make some “quick money”. Once you start trading, you realize that it more than just buying & selling the stocks or markets and will encounter with all the different aspects of trading business – Psychology Management, Money Management, and Trade Management.
So, during the early days, it is more about learning how to convert your research & analysis to a real trade or how to manage a trade when market is going against you or how to maintain your calm when you have consecutive losses or how to restrict your losses and protect profits and many more ……
It is always advisable for new traders’ to start with a small account to learn & experience the mechanism and wide aspects of the market, learn how to choose the stocks or markets to follow and trade, structure and formulate the trading plan & strategies, training and inspiring self at every step to see real insights, and putting strategies to test on your chosen market everyday then you will be in a position to look at the nuggets all together.
With time and experience your learning curve starts to slope upwards and if you manages to take care of your trading account wisely, follow the formulated rules and policies as planned then you start to make some consistent real money from the markets and this proves yourself that you are ready to take responsibility for more money than before.
Conversely, if you manage your trading account poorly, don’t put in the necessary efforts or trade more on hope than facts and not following your trading plan and strategies then the market will snatch your money, give it to another trader, and will throw you out forever.
Lastly, starting small always make sense for a newcomer to the markets because it is always good losing small than all. Even if you lose your small committed initial seed capital during this learning phase, you will still be in the market. You can come over again after refining your trading strategies; enter the market with the capital set aside and this time with incomparable and priceless learning & experience. But think of the case, where you put all the money you had as the trading capital, and loose it then you will have no way to come back and trade the market again.
So, before jumping on and rushing to enter the markets with a large seed capital, ask yourself how much do I know about the markets or trading business? Or do I possess the trading skills to start big with my hard earned money? Or whether I am ready to take this big responsibility with no experience and knowledge?
- Don’t be too anxious to trade Big early
- Do not risk money in a stock you don`t know anything about.
- Do not trade on hope, fear, tips, or news.
- New traders should avoid taking leveraged and intraday trades. So focus only on stocks positional trading
- “Believe in Yourself” and have faith in India, and LASTLY…
Enter the Trading Business to Stay Their “FOREVER”
KNOWLEDGE IS POWER!