The new rules will be in place from 1st August, which is next Wednesday.
I know that a lot of people (especially those who haven’t done much trading, or haven’t yet started out) have considered giving up on the idea of trading all together. It’s easy to feel despondent when you’ve found yourself on the wrong side of an outcome like this, but I’m determined to show traders that there’s no need to take a cut in our profits.
Traders are, by our nature, adaptable creatures, and it’s simply some subtle adjustments that need to be made, along with the kind of good money-management that we should have been practicing all along.
Lose the battle … win the war
Family life is a great lesson in picking your battles. And, as the school holidays begin, there are plenty of battles to pick from in the Rose household.
In trading, we may have lost this regulation battle … but in the long term, I believe we can be just as profitable, and will trade a lot smarter …
When we get a knockback, it’s worth remembering what attracted you to trading in the first place
It’s easy to get stuck. You get the job … the house … buy the stuff you need … and before you know it your choices are cut off and you feel stuck in a loop.
Earning extra money from an external source is one of the best ways to break this cycle, and that’s exactly what draws so many people to trading.
Spread betting has given us a powerful way to turn a small amount of money into a large one. And – even with the new regulation – those opportunities haven’t gone away.
But the reason those returns are available is all to do with uncertainty.
Traders have to embrace that uncertainty – it’s what brings in the profits as well as the losses. And we need to accept that there is no ‘ordinary day’ in the markets – isn’t the daily grind exactly what we were trying to escape!?
But can we really succeed in these conditions?
There’s an image of the ‘retail trader’ (i.e. people like you and I), as naïve. Some people think of us as fools, chasing after get-rich-quick schemes and searching for a Holy Grail that doesn’t exist.
I find this idea offensive.
People tell me that, ‘surely the professionals can do it better than you can … with all their fancy algorithms and big money’ …
But I just don’t buy it.
Take a look at any professional fund performance and you’ll see the results are mediocre at best. Anything mass-produced, designed to appeal to a wide audience is unlikely to be very impressive.
I genuinely believe that we, as individuals, are best placed to decide what our needs our, what our risk profile is, and what efforts we’re prepared to go to, to achieve those rewards.
So, what do we need to do?
Most people don’t even consider trading. They think it’s ‘too tough’, ‘too technical’, ‘too risky’. Most people will put their money into the bank and leave it at that.
So, if you’re reading this, you’ve already taken a bold step towards doing something different.
Making money from the markets is about sticking our necks out and being tenacious. This doesn’t mean doing something risky – but there are (managed) risks involved.
That tenacity that keeps us going comes from having ambitious goals. I’m talking about paying off the mortgage … enjoying the luxuries of life … building financial security for your family … or a substantial nest egg for your retirement.
These goals are in contrast to unrealistic goals – like making a million by this time next year.
Just because we have to guard against unrealistic goals, it doesn’t mean that we shouldn’t be ambitious. Those ambitious aims are all achievable in the long term, even with a very small starting fund.
Winning the war
So, when regulators tell us that we can’t access these profits any more … that the financial markets should just be a place for the rich to get richer …
… I’m not about to go quietly.
Success in the markets isn’t about having a huge trading fund, or a fancy algorithm. It’s a lot simpler than that (yet is something that many people fail to achieve). It’s about knowing where you want to get to, and having the tenacity to keep moving towards that goal.