I recently met someone that was struggling to make ends meet. He wanted to start a business yet wasn't well grounded and worse he was unwilling to put any skin in the game. In other words he wanted to have no risk and all the reward. No plan, just results. No negative (his words, my words "realistic") feedback, and just positive thoughts. While I agree that positive thinking brings positive outcomes, there is a time to be realistic and consider the worst case scenarios. Or just bad scenarios. He didn't want to hear it. In his mind he had it all figured out. Yet he changed his mind so many times it showed he had a lack of commitment. Why? Because he had no skin in the game. To him it was just a free ride, let an investor pay for his business (good luck on that one) and have him run it. No commitment on this part. There is a reason why some people struggle while others make success look easy. Remember, the professionals always make it look easy!
The risks you take should be directly proportional with the rewards you are looking to attain. No risk, no reward. Foolish risk. Foolish reward.
Putting "skin in the game" changes the game entirely. Using your own hard earned money to start a business is some serious skin for example. Your mind set changes and you are (hopefully) more careful making decisions that impact your bottom line.
Trading is no different. You need to put some skin in the game. I'm not talking about money either. Sure you need money to get started. A lot less than most people think or will tell you. I'm talking about serious commitment. Time. Effort. A willingness to learn. A willingness to make mistakes. A willingness to learn from you mistakes. And the ability to persevere.
Some people believe in throwing money at a problem. You know "money fixes everything". Well to an extent perhaps. But to an extent it's like the drugs you take to mask the root cause of the problem you're having. For example if you have a headache your body tells you have a dis-ease. Something is wrong and your body is saying fix it. Your body isn't telling you to pop aspirins... Unfortunately most people want the quick fix and just start swallowing pill after pill. The better approach is to look at the root cause. Why do you have a headache? Is it from something you ate? Stress? Perhaps your spine is off balance (think nervous system)? Are you getting enough sleep? Exercising enough? Relaxing enough? Sure you can pop that aspirin, in the short term it will help mask the symptom but in the long term ignoring (masking) those symptoms will do nothing but make the problem worse. So does throwing money at problems. You need to understand what's going on. Why are you making bad trades? Why aren't you profitable from your trades? Why do you constantly blow your account (and hard earned money) after successfully trading for months?
When you have skin in the game, the game changes, and you change. If you are new to trading you should have someone teach you and coach you about the "game" you are about to play. If you have been trading for a while and want to make the most out of your trading you should consider doing the same to protect your skin and maximize the profits.
If you are not willing to put skin in the game then do yourself a favor and do not trade the Forex market.
And you have to be sure you can afford to walk away from the money you are about to invest. Especially new traders. I see it far to often. New trader thinks he has found the holy grail. Puts a few thousand dollars into an account. Loses it. Business man trades for a little bit and then puts big money into an account, loses it. Managed accounts in my opinion are the worst. Seriously if anyone is so good that they can make you profit trading with your money, why are they doing it? Why don't they just retire on an island? Why they don't put a risk free guarantee on it? Simple. Managed accounts don't work either. If it's too good to be true, it seldom is.
