The big blow that happens precisely because there is a cushion in margin can undoubtedly be prevented with mental management! ~ Financial cushion can end up being your downfall ~

Tengen Mental Management.09

This time I will talk about how money and trading are mentally connected, which directly affects mental state.

It's hard to put into words, but...

① Money with a cushion (money you can lose and still be okay) = credit bonus

② Money you cannot afford to lose = money you must not lose, or borrowed funds, etc.

Even with the same margin, the content is completely different.
Regarding the relationship between the two monies above and trading, there are pros and cons.
《Strengths》
① Money with a cushion doesn’t affect the mind much even when trading with high leverage

② Because there is no cushion, you can make pinpoint, highly precise entries and suffer no large losses, enabling accurate stop-loss

《Weaknesses》
① Because of high leverage, it is short-lived. With greed ahead, you may miss withdrawal opportunities and end up losing everything

② Because there is something you must not lose ahead, compared to the former, both unrealized gains and losses, as well as entries, carry more stress. It is quite bad for mentality

In this way, the essence of money can change trading itself.
Money should not be lost even by 1 yen in principle.
However, because money affects trading, a clear line must be drawn.
Suppose the money you must not lose in the first place is 500,000 yen.
If you decide to trade with 500,000 yen as your stake…

→ Deposit 500,000 into your account as margin and bet your life on it.
Focus on trading toward the target profit with compound growth. Adjust the lot size properly and, because the margin is large, strive for trades that allow sound money management.

→ Do not deposit 500,000 all at once; divide it into five parts and start by depositing 100,000.
As profits accumulate, transfer profits to the deposit account and keep increasing the balance of the deposit account as much as possible.
There is no right or wrong approach.
People have different suitable methods; some start with the latter to increase funds, then use the former to improve stability.

I always keep money in my Ocean [likely a broker name] broker account, because if withdrawals become impossible due to issues, I would be in trouble. So I make withdrawals a must.
If a broker can guarantee exceptional safety and security, compound interest might be good, but risks must be managed properly.

It is good to structure your trading strategy and fund management axes after clearly understanding the essence of your own margin.
You cannot win forever in the market.
There is no Holy Grail.
Still, you should devise ways to preserve money.
That is important.
Because you have money with a cushion, you can maintain higher entry accuracy and stop losses without wobble, thereby avoiding disadvantages.
Because you have money that you cannot afford to lose, you should determine your loss tolerance, divide accounts, and enter in portions to prevent a single blow from wiping you out, thus protecting money and mindset.
Whether you trade 1 lot or 0.01 lot, the feel of the trade should be the same in intensity.
With a small lot, you cannot ever get used to a high lot.
Strategically constraining lot size and still trading properly is necessary to reach the next level, so I will continue to share mental management guidance in the future.