Selling FX trading to a close relative whilst stressing the positive outcomes

Feb 27 • Between the lines • 3243 Views • Comments Off on Selling FX trading to a close relative whilst stressing the positive outcomes

Can readers recall how their closest nearest and dearest relatives reacted when they were told they were considering trading the markets? This author recalls the day as if it were yesterday when he told his wife (over ten years ago) that he was considering “opening up a spread-betting account” in order to trade the DJIA and the FTSE 100. As readers can imagine that word “betting” conjures up just about every imaginable, negative stereotypical image we could possibly conceive. Particularly when delivered from a guy who showed no interest in betting previously, bar the annual Grand National horse race in Liverpool, or a bet on who might score the first goal for his favorite football team and that’s only if he was actually at the match…

So the reaction from my wife was a mixture of confusion, bewilderment and negativity. Fortunately, being the supportive and understanding type and having witnessed me make a success out of most things I put my total commitment to, a quick ‘sales pitch’ on the industry and opportunity was all that was required in order to placate any initial fears. But that initial reaction always left we thinking if that word “betting” was removed how folk would react?

I’m thinking of opening a trading account with one of the largest and most reputable broker trading firms based in London, in order to trade the UK FTSE 100 and the Wall Street DJIA 30…

Would have been a much better pitch. Emphasizing: London, reputation, trading account, and impressive financial terms that many of us are familiar with might have got a better reception; it’s that word “betting” that causes the negativity that’s for sure. But actually, when you come to think of it, there’s something exceptional and cathartic about that word that we should actually embrace as opposed to recoil from, as it’s only when we begin to mature as traders and face up to certain aspects that we’re finally able to move on.

We speculate on markets, that’s what we all do, at the race track or on out platforms

There’s a part two to the selling of our industry and our occupation that might go over the heads of our nearest and dearest when we’re explaining what we do and when you attempt to explain it you’ll often be met with a vacant stare. But it is in fact these crucial aspects that set our form of gambling from betting on horses, or football matches, despite the many similarities. However, the irony is that professional gamblers whether at the: roulette table, the race track, or the football stadium all utilize one of these crucial aspects to very good affect; risk/money management…

Talk to any professional gambler and you’ll find that the truly successful ones have a trading plan. They also exercise great money management skills, they have a method and their mentality and psyche is very strong after years of experience and exposure. If that sounds familiar it should as these are the exact same critical success factors that we need in order to be consistently profitable when betting on our markets.

The professional horse gambler will even do their own form of fundamental and technical analysis. They’ll consider the form of the jockeys and horses, the reputation of the racing stable, the weather conditions, the state of the race track; is the ground firm or soft etc. Meanwhile if they have an account, of perhaps €100K, just like us they’ll only commit perhaps one percent of that account and only once they’re absolutely certain that their method and overall strategy works. And in their trading plan they may have in built rules not to over bet, or as we’d term it over trade.

But coming back to selling ourselves and our plan to perhaps a spouse or relative, explaining how we’ll be trading a plan, paying strict attention to risk/money management, how we won’t over commit, how we’ll stop if we reach a certain drawdown is an excellent approach.

Again if we’re lucky enough to have €100K savings we’d be reckless to commit it all into a trading account from day one wouldn’t we? Instead we explain that we’re only going to commit 10% of those savings, €10K. And our drawdown level will be 15%, €1,500. Even better our risk per trade will be 1% or €15 per trade. So if we ‘do the math’ we’re actually only risking a miniscule 0.015% of our actual savings per trade or bet. Now if that’s not an easy sell then we don’t know what is.