Today we’re going to figure out where you are in your trading journey. Understanding this is important because it’s the only way to know what kind of trading strategy you should employ in terms of what kind of investments you should be looking for, how much risk you should be taking, and other factors.
The most important thing to remember is that there isn’t just one strategy that’s perfect for everyone. That’s because everyone has different goals, risk tolerance, and experience. It’s important to first establish where you are and what your goals are and then you can figure out a trading strategy will work for you.
Here are a few examples of different traders at different points in their journey that will help you figure out where you are.
First up we have trader #1 who has a small thousand dollar account, is in his 20’s, and doesn’t have much experience in the markets. Normally for a trader that’s so young and has this small of an account, it would make sense to use a highly volatile strategy that has the potential of having really big returns. But the problem with that kind of strategy is that it comes with huge drawdowns in the 80-90% range.
If this trader doesn’t have experience in the markets and doesn’t have the tools to deal with their emotions through all that volatility, the they aren’t going to be able to carry out a strategy like this. They’re better off using this time to learn. They can start gaining experience in markets, while learning all they can through solid sources like this channel, and figure out a strategy that they’ll be able to use when they actually have a decent sized account. And during the learning process they just need to keep working and saving.
We’ve got more examples of traders in the video above, so make sure to watch it!
And as always, stay Fallible out there investors!