*One of the easiest ways to make your trading life easier is to increase capital*
Welcome back to the blog! In this blog post I am going to talk to you about trader funding, trading capital and why you should seriously look at trader funding programmes if you want to progress in the retail trading industry.
Let’s start by looking at the 3 main reasons as to why new traders fail to progress in their journey to becoming a long term profitable financial markets trader.
1. Keep making the same mistakes.
This is a common issue with new traders and it even successful traders still make silly mistakes that they have made previously. I am talking about things like entering trades too early, not quite sticking to a trading plan or moving stop loss or take profit orders which in turns adjusts your risk management and potential returns. All of these are common mistakes and continuously doing them will stop you from progressing and becoming more profitable long term.
My top tip for fixing this problem is to journal everything. This is even more important when you first start out trading because you can use this data to adjust trading strategies, increase your returns and learn from mistakes.
2. Risk management.
Trading the financial markets is a long term game. You should aim for consistent returns, exponential growth of your trading account and long term profitability. A lot of new traders fail because they are trying to aggressively grow a small capital account in to something they can trade with full time and replace their current employment. This leads to over trading, over exposure and too much risk which will almost always lead to failure.
You can trade and grow a relatively small capital account much like you would a larger one and over the years it will exponentially grow larger but you should be realistic with your expectations. If you want to trade the financial markets as your main source of income you should look at increasing trading capital instead of trying to aggressively increase your returns.
3. Access to trading capital.
Trading capital holds a lot of new traders back. You can have a strong trading strategy and long term profitable returns but if you are only trading a small capital account you will find it very difficult to progress because the monetary value of account growth is still small.
As I mentioned previously, it is much easier to progress by trading with more capital. You can lower risk whilst maintaining the same monetary levels of income and it takes pressure off of you to produce returns on capital. You will also find that you can grow your account faster because you are able to leave more profits invested and exponential account growth will increase.
In the rest of this blog post I will show you one of the easiest ways to increase your trading capital.
I am aware of a few trader funding programmes available and some are better than others. Almost all of them require you to pass some sort of test or challenge prior to receiving a funded trading account. FTMO is no different but I believe they are ahead of their competitors for 2 main reasons.
Firstly, they require you to pass 2 separate stages of trading before you get the capital. This means they only accept the best traders and the length of the 2 phases means they can eliminate inconsistent and non-profitable traders.
Secondly, they require that you pay a small fee to access the challenge. This is important because it means you have some “skin in the game” and you are invested in your own success. Even if it is only a few hundred pounds. The trading challenge prices for each level of capital funding are listed below.
What are the 2 phases prior to being funded?
Challenge Phase – You have 30 days (from the date your first trade is opened) to make 10% profit whilst maintaining risk management and not exceeding a maximum daily loss of 5% and a maximum total loss of 10%.
If you pass this phase you then move on to the verification phase.
Verification Phase – You now have 60 days (from the date your first trade is opened) to make 5% profit whilst maintaining risk management and not exceeding a maximum daily loss of 5% and a maximum total loss of 10%.
If you pass this phase then you will be offered a fully funded trading account with a profit share of 70% to you and 30% to FTMO.
IMPORTANT! There is one more thing you should be aware of and that is that FTMO will refund all of the “challenge fee” you paid if you successfully become a funded FTMO trader. Therefore, you can actually gain access to a significant amount of trading capital with zero exposure to losses and zero costs/fees.
Not everyone will deal with having access to more trading capital in the correct way. As we all know, psychology and mental strength are a huge part of successfully trading the financial markets and being responsible for more capital will naturally have an effect on your psychology. It is impossible for it not to have an effect.
The main reason for why a new trader who is successfully trading a small account will then struggle and become less profitable with a larger amount of capital is because of the monetary value. If you have not had experience seeing larger values of profits (and losses) appearing in your trading terminal then this will definitely effect your trading psychology and your ability to stick to your trading plan. A new trader might then find themselves closing trades early, not sticking to their risk management strategy or even not taking trades at all because they are scared. All of which will effect their profitability.
I believe that getting funding through a company like FTMO actually can help to reduce the effects of increased capital on your psychology. This is because you aren’t simply given a huge lump sump of cash and told you can trade with it. You have to earn it and by completing the challenge phase and verification phase prior to getting the trading capital, you expose yourself to larger monetary figures and condition yourself to deal with them.
Remember, time in the markets is more important than timing the markets. There is no replacement for practice and experience so by getting used to a larger amount of trading capital prior to actually being fully responsible for it means you will more likely succeed.
If you are serious about progressing in your trading journey then I do highly recommend looking at trader funding programmes like the one offered by FTMO. It allows you to benefit from trading increased funds with almost zero downside risk. Click on their logo below to check out their trader funding programme in more detail.
If you want to learn how to trade the financial markets the correct way then please check out the TRADING EDUCATION page on this website. I can teach you the exact same strategies I used to pass the challenge and verification stages and successfully gain funding from FTMO.
All my technical analysis is done using the TradingView platform. You can get access via the link below.
My preferred broker of choice is IC Markets. Low spreads and trading costs really help long term profitability. A link to their site is below.
FTMO Trader Funding Programme.
Thanks for reading and please don’t forget to LIKE, SHARE and FOLLOW my blog to stay up to date with the latest market analysis and trading education posts.
DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.