{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/forexschoolonline.com\/trading-millionaires-mindset-forex-trading-tutorial\/#BlogPosting","mainEntityOfPage":"https:\/\/forexschoolonline.com\/trading-millionaires-mindset-forex-trading-tutorial\/","headline":"Why You Need to Trade With a Millionaires Mindset","name":"Why You Need to Trade With a Millionaires Mindset","description":"Why You Need to Trade With a Millionaires Mindset A key factor in the success or failure of any trader is how they manage their trades and their money. Whilst most factors are the same for all traders such as; all traders can use the same charts, the same brokers, the same methods to trade […]","datePublished":"2014-06-03","dateModified":"2019-05-21","author":{"@type":"Person","@id":"https:\/\/forexschoolonline.com\/author\/jonfox\/#Person","name":"Johnathon Fox","url":"https:\/\/forexschoolonline.com\/author\/jonfox\/","identifier":1,"description":"Johnathon is a Forex and Futures trader with over ten years trading experience who also acts as a mentor and coach to thousands and has written for some of the biggest finance and trading sites in the world.","image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/d0b589a007c132efe23124c05a02b68524844c0089401129bd50bc12ee59d3a9?s=96&d=monsterid&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/d0b589a007c132efe23124c05a02b68524844c0089401129bd50bc12ee59d3a9?s=96&d=monsterid&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Forex School Online","logo":{"@type":"ImageObject","@id":"https:\/\/www.forexschoolonline.com\/\/wp-content\/uploads\/2018\/09\/FSO-Transparent-logo-gr.png","url":"https:\/\/www.forexschoolonline.com\/\/wp-content\/uploads\/2018\/09\/FSO-Transparent-logo-gr.png","width":240,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/forexschoolonline.com\/wp-content\/uploads\/2014\/06\/millionaire.jpg","url":"https:\/\/forexschoolonline.com\/wp-content\/uploads\/2014\/06\/millionaire.jpg","height":1280,"width":1920},"url":"https:\/\/forexschoolonline.com\/trading-millionaires-mindset-forex-trading-tutorial\/","about":["Article","Featured Articles"],"wordCount":1735,"articleBody":"Why You Need to Trade With a Millionaires MindsetA key factor in the success or failure of any trader is how they manage their trades and their money.Whilst most factors are the same for all traders such as; all traders can use the same charts, the same brokers, the same methods to trade the markets etc, different traders will come to the markets with vastly different amounts of money at their disposal to trade the markets which can have very different effects on the different traders mindsets.A very simple example of this is; a trader with a small account of $500 may be trying to always make huge winning trades to make large amounts of money, whereas as another trader who has a larger account of $100,000 only has to make a few percent at a time and they are making good gains.Whilst it is easier to make smaller gains with a larger account because you don\u2019t have to make large percentage gains, a massive trap that traders fall into time and time again with smaller accounts is that they do what happened in the example above, which is that they try to shoot for large unrealistic gains and often times end up blowing their accounts.\u00a0There\u2019s a Reason Casinos Give Out Chips, Not Money To Play WithA huge proportion of retail Forex traders start with smaller accounts less than $10,000 and a lot of traders start with a lot less than this. It is a huge trap for traders to think that they need to start doubling or tripling this account overnight or in weeks. What this ends up with is blown accounts and the trader looking for how they are going to fund their next live account.After the trader has proceeded to blow a few trading accounts, what they actually could have done was taken all the money they have blown and made a\u00a0made a decent account as I will explain below, if they had just changed and tweaked their mindset from the majority of traders.A problem that traders have is that when trading, the money is in the broking account and traders don\u2019t have the same connection to this as what they would if they were holding onto it in their hands or had it in their wallets.The reason casinos give players chips and not money to play with is because the players don\u2019t have the same association or connection with the chips as they do when they are holding the money in their hands and so players are a lot more likely to lose more money when playing with chips at the tables than if they were playing with cash.\u00a0You Need to Trade \u201cAs If\u201d With a Millionaires MindsetTraders face the same risks as players in casinos because their money is disconnected from them in their Forex broking accounts. Traders need to be very aware of this and that every dollar they profit is just as valuable to their trading goals.Rather than trying to make large trades that involve huge risk of ruin every trade and that could put a large dent into the trading account if they lose, traders need to tweak their mindset to start thinking \u201cas if\u201d they were trading with a large account.Instead of taking the mindset of the small account holder, before entering each trade the trader should be thinking “as if” they have a much larger account and how they would trade not if they had a small account, but if they were trading with a large account.Traders need to start questioning the trades that they are taking because quite often the trades that traders would take would quickly change if they had a much larger account.Frequently the trader only takes the trade because they have a small account and are risking smaller amounts of money. You need to start looking at your trades now and start asking yourself “Am I only taking this trade because I have a small account? and would I still play this trade if I had a million dollar account?”The other huge reason why this is so important is because if you ever want to become a consistently profitable trader or a full-time trader, the size of the account is not important, but the trades you take and the habits you start to repetitively build into your subconscious mind are critical as I discuss in my Forex Trading Tutorial – Using the Subconscious Mind to Become a Successful Forex Trader\u00a0\u00a0Start Using the Magic of\u00a0Compounding\u00a0ReturnsThe most potent factor traders with small accounts have on their side is the power of compounding. From small accounts, really substantial accounts can be grown over time and with consistent, regular gains and the power of compounding.The really amazing factor of compounding returns is that traders don\u2019t have to make large returns to see a big result, but what they do have to do is be consistent. It is better for traders to consistently keep banking profits month after month, then have one big month and then nothing for months on end.This is far more achievable for the small Forex account holder to bank small returns every month, then to try to double their account every week like most small account holders are currently trying and failing to do.The other requirement for traders is that they tweak their mindset. The large returns with the power of compounding will only be achieved with the correct mindset and discipline. Traders need to switch from looking to make all their riches over night to realizing that Forex is a business and for compounding to work the longer the better.I have taken the compounding \u00a0example used in my article; How to Make Money Price Action Trading and have put it below to show just how powerful it can be if a trader can average 6% per month for only 12 months. Starting account balance: $100Month 1:\u00a0100 x 6% = $106Month 2:\u00a0106 x 6% = $112.30Month 3:\u00a0112.30 x 6% = $119.0Month 4:\u00a0119.0 x 6% = $126.0Month 5:\u00a0126.0 x 6% = $133.50Month 6:\u00a0133.50 x 6% = $141.50Month 7:\u00a0141.50 x 6% = $150.0Month 8:\u00a0150.0 x 6% = $159.0Month 9:\u00a0159.0 x 6% = $168.5Month 10:\u00a0168.5 x 6% = $178.60Month 11:\u00a0178.60 x 6% = $189.30Month 12:\u00a0189.30 x 6% = $200.60Total = $200.60As the example above shows; \u00a0the power of compounding meant the trader made 100% on their account in 12 months averaging a return of just 6% per month. The amazing thing is that if the trader chose not to use the power of compounding, they would have only made 72% during exactly the same time and that’s making the same 6% return per month!This is a 28% difference in the return made, doing absolutely nothing different at all just because of the power of compounding! This is all in just 12 months and highlights my point that traders need to tweak their mindset because the longer the time-frame the better for the power of compounding returns.What happens from here however is that the returns start to go on a growing upwards spiral because that’s how compounding returns work. It does not stay the same, but continues to snowball and grow on itself. The longer, the better and bigger it works. Stick to the Plan and Don\u2019t Over-trade!The traders with small accounts need to look into trading with the Money Trade Management Method that I discuss in my Forex trading tutorial because trading with the often used percentage method with a small account makes it hard to go forward and takes too long to get anywhere.The percentage money management method makes it really hard for those traders who want to keep their risk low, but also start to see reasonably fast increases in their account.A huge issue for traders with smaller accounts, is often wanting to over-trade, thinking that they need to make a ton of trades do make up for the smaller account to make a decent return. This is a huge mistake because the number one biggest account killer in Forex trading without a doubt is over-trading.The traders who become consistently profitable and stay that way are those traders who have their edge and only come out to make their trades when their edge is present in the market. In other words; they are picky when they choose to make their trades.For compounding to work it’s magic in a traders account it is super important that traders are not making one off large profits here or there, but regular consistent gains over time.This way the profits continually compound and grow larger and larger that can be from something small into something substantial.\u00a0Keep it All Together as a Pro!On occasions I get emails from traders who have been profitable for a sustained period of time, but all of a sudden have gone away from their rules that made them successful and they are over-trading and over-risking.They have lost sight of the medium to long-term of what actually made them successful and instead of realizing that by continuing banking the profits to build a large account with compounding, they all of a sudden want it all now and it very, very rarely if ever happens this way.Becoming a long-term successful trader who gets to reap the rewards of success, only works if you are \u201con\u201d or \u201cin the zone\u201d every day and every trading session. For your returns to be compounded you need to be consistent. You don\u2019t need to be the hero and you don\u2019t need to make 100% returns a month, you just need to be a professional every time you come to your trading station ready to trade.Sometimes it can be hard to stay disciplined and keep your mind in the game 100% of the time and that\u2019s why you need clearly written out trading goals and affirmations that remind you exactly why you are doing what you are doing and to keep you from straying from the path.You need to constantly remind yourself that sticking to your rules and plan is the only way to success and following the path of what most other failed traders do i,e, over-trade, over-risk and not sticking to the rules, does not lead to success, so make sure you swim against the stream and follow your own path and not that of someone else.Safe trading and all the success,Johnathon I would love to hear your thoughts, questions and comments below; "}