The 3 Biggest Challenges Traders Face
Posted on 31st January 2023
Trading is extremely challenging, especially for beginners. There is a statistic that says that 90% of traders lose 90% of their capital within 90 days of starting to trade.
I have worked with, coached, and mentored hundreds of traders, from different backgrounds, and different countries, all with different aspirations on what they were trying to achieve from trading.
This means they have different obstacles to overcome and different challenges that they face to ultimately achieve their trading goals. Here I will discuss the 3 biggest challenges traders have to face to become profitable.
“Education is the passport to the future, for tomorrow belongs to those who prepare for it today.”
Lack of education and a misguided approach:
A lot of people who attempt to trade are enticed in by the excitement of earning extra income, and the freedom that trading can offer. There are many influencers out there offering a shortcut to trading success and a lavish lifestyle, making trading sound easy. This leads people to fund an account and jump straight into the financial markets and trade without the appropriate skillsets to be successful.
They lack the education or even foundational knowledge of the risks that trading represents and how you need to manage those risks to protect your capital.
Trading is like any skill in life, it needs to be learned and developed. This takes time. Only through education can we grow and provide ourselves with the necessary tools to take on the markets with the best opportunity to trade safely and successfully.
Lack of funding:
In trading, the harsh reality is, it takes money to make money. It is not possible to turn £500 into £5 million pounds in a short space of time, no matter what the internet will have you believe.
Due to the misguided realities from the outset, those with smaller amounts of capital become emotional in chasing their dream lifestyle. This leads to over-leveraging, risking too much, and ultimately bigger losses, which damages their ability to achieve their goals.
If a trader just wishes to make a supplementary or passive income, then a smaller account may be suitable for their needs and goals.
If someone desires to become a professional trader, then there are other avenues they can take, through trader funding programs. But to be able to get funded, they need to initially focus on the processes needed to become a consistently profitable trader, otherwise they will not get the funding they need anyway.
A failure to work on their mindset:
I have often found that one of the biggest stumbling blocks for traders and their path to profitability, is not in their actual technical ability to trade, but actually more to do with a mindset issue that is holding them back.
Too many programs do not focus on mindset and the impact this can have on traders. It is a fundamental part of the education journey to becoming a successful trader. The mindset issues that traders face will vary from individual to individual, but being able to identify the issue and then implement actionable techniques to help overcome them, is often the key to unlocking the final door to profitability.
This is why in our Academy Course, we have a whole section of the syllabus dedicated to mindset, the issues traders face, why they face them, and also the techniques that can be put in place to overcome them.
To your trading success.
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