Reset the bank

Not one for sharing news usually but myself and my wife have a new arrival on the way in January. Along with a new motor, a few other unexpected bills have arisen meaning I’ve taken a significant draw-down on my account. I hate doing this, it goes against all economies of scale but is unavoidable.

Operationally wise, I quite like I though and the staking takes me back to the early days when my outlook was perhaps less cynical and fresh. It’s the 3rd time I’ve done it, the first time forced with no option during my very early days went the bank blew! From the number of people inactive traders I see on Twitter selling information, databases, advice or tips i bet it is a common occurrence!

I don’t actually mind trading with a smaller bank, for a number of reasons. I log every trade I do which is linked back to a spreadsheet which gives me my staking. That is at new level and even though I carry the same risk of losing my bank compared to the higher stakes I previously used, the psychologically the pressure seems less. 

Be sure to adjust your staking as every trade you place will be reminder of where you’re at, and where you’ve fallen from.

It also gives a good opportunity to reset, re-evaluate approaches, right or wrong and to give a new target to focus towards. If your monthly  P/L over a yearly forecast has lots of variance it’s a sign you are doing something wrong, maybe discipline or staking. 

If you are starting out, blowing the bank is something that is likely to happen. It natural to experiment and the greedy, dangly carrot will almost certainly contribute. There’s nothing wrong with that, however I would almost guarantee anyone starting out is trading with a bank 50% to large. What that means is you are paying double the price to learn your trade. Be humble and accept that there is lots to learn!

Use a big bank loss as a positive to address the mindset issues you many have faced, reflect on what went wrong and nurse your wounds to make sure you don’t fall next time when climbing the mountain. 

Climb steady!

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