The main reason you're blowing up accounts
Almost all blown-up accounts happen quickly
Typically from only 1-3 trades
There are 2 main causes for this:
- Risk Management
- Emotions
Let's dive into both👇
Risk Management
Risk management is crucial to becoming a successful trader
The best way to grow an account is to risk the same % of the account per trade
I suggest no more than 5%, but the lower the better
For example...
If you're risking 3% of your account per trade, you have to lose 33 trades in a row.. to blow up your account.
That's very unlikely.
The reason most traders blow up is because they full port or go all-in on every trade and risk way too much
This is the fastest way to destroy your account.
ALWAYS risk a small % of your account per trade
It not only will prevent you from blowing up... but will also be the fastest way to help you grow your account
Emotions
The second way is Emotions.
Maybe you are using risk management, and are only risking 3%.
Then your stop hits and you don't get out
And price keeps dropping and dropping and dropping...
It will come to my breakeven and I'll get out, you tell yourself
But it never does
Then once you finally get out, your account is gone.
I've done that LOADS of times
So how did I fix that?👇
I realised that I wasn't getting out at my stop because I didn't trust my strategy.
At the time, I wasn't trading with conviction
I'd take a trade because it just looked like price was going to move higher.
No real strategy or reasoning for the trade.
It's extremely difficult to control your emotions when you shouldn't be in a trade in the first place!
Once I noticed this I got a grip on my strategy and really started being strict on my entries
After clearly defining my strategy, it gave me more confidence in my setup and my edge
which ultimately led to me becoming more disciplined and allowing myself to take the loss.
Conclusion
So if you're looking to stop blowing up your accounts...
- Use Risk Management
- Trade with conviction using a clearly defined strategy
Typically from only 1-3 trades
There are 2 main causes for this:
- Risk Management
- Emotions
Let's dive into both👇
Risk Management
Risk management is crucial to becoming a successful trader
The best way to grow an account is to risk the same % of the account per trade
I suggest no more than 5%, but the lower the better
For example...
If you're risking 3% of your account per trade, you have to lose 33 trades in a row.. to blow up your account.
That's very unlikely.
The reason most traders blow up is because they full port or go all-in on every trade and risk way too much
This is the fastest way to destroy your account.
ALWAYS risk a small % of your account per trade
It not only will prevent you from blowing up... but will also be the fastest way to help you grow your account
Emotions
The second way is Emotions.
Maybe you are using risk management, and are only risking 3%.
Then your stop hits and you don't get out
And price keeps dropping and dropping and dropping...
It will come to my breakeven and I'll get out, you tell yourself
But it never does
Then once you finally get out, your account is gone.
I've done that LOADS of times
So how did I fix that?👇
I realised that I wasn't getting out at my stop because I didn't trust my strategy.
At the time, I wasn't trading with conviction
I'd take a trade because it just looked like price was going to move higher.
No real strategy or reasoning for the trade.
It's extremely difficult to control your emotions when you shouldn't be in a trade in the first place!
Once I noticed this I got a grip on my strategy and really started being strict on my entries
After clearly defining my strategy, it gave me more confidence in my setup and my edge
which ultimately led to me becoming more disciplined and allowing myself to take the loss.
Conclusion
So if you're looking to stop blowing up your accounts...
- Use Risk Management
- Trade with conviction using a clearly defined strategy
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📧 Coding/Consulting Inquiries: dave@best-trading-indicator
Telegram: Daveatt
⏩ Course: best-trading-indicator.com
Twitter: twitter.com/bti_trading
📧 Coding/Consulting Inquiries: dave@best-trading-indicator
Telegram: Daveatt
⏩ Course: best-trading-indicator.com
Twitter: twitter.com/bti_trading
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