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06. Common Mistakes Uncategorized

Being undercapitalized

As the saying goes, it takes money to make money. Many beginning traders are blinded by the promise of making boatloads of cash without leaving the comfort of their couch. This is a false reality unless they already have significant capital to trade with. 

A trader who wants to be a professional needs to be able to support their entire life with trading – that means their profit must cover their living expenses, without eating into their trading capital. In most parts of the world, this requires at least $50,000 – $100,000 to trade with, and a steady profit of 10% monthly. 

In reality, this is very difficult to achieve. As a result, many beginning traders find themselves under a great deal of stress when their expected trading returns fail to align with the actual results they produce. 

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