Getting Through the Initial Ups and Downs of Trading

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What Keeps You Motivated? 8 Entrepreneurs Explain How They Manage Through the Ups and Downs of Startup Life.

Grow Your Business, Not Your Inbox

The companies in this article are included in the Entrepreneur360™ Performance Index.

When you’re in startup mode, daily bumps and bruises are a way of life. But every now and then you’ll run into challenges that feel akin to a devastating blow to the gut.

From technical meltdowns, to negative press, to deals gone awry, it’s important for company leaders during these critical times to remain focused on what really matters. After all, their motivation levels impact how and whether the entire company can move forward.

That’s why we asked a range of leading innovators: What keeps you motivated through the ups and downs of running a business?

According to David Siminick of SoapBox Soaps, your ability to deal with business losses has a lot to do with how you deal with business victories. “There are going to be ups and downs, but to stay energized throughout you have to mitigate both,” he says. “If you let yourself get caught up in your own hype you’ll exhaust yourself with all of the ups and downs.”

We asked Siminick and other founders of companies featured in the Entrepreneur360™ Performance Index how they stay inspired through the entrepreneurial journey. Whether it’s team-building or a passion for disrupting an industry, their insights and strategies may help you identify what to focus on when times get tough.

Responses were edited for clarity and length.

1. I feel I’m always on the cusp of something big. Beyond that intrinsic motivation, in a down period, I anchor myself to routine and family.

— Gabriel Weinberg, founder and CEO of DuckDuckGo, a search engine that focuses on user privacy and doesn’t track your searches.

2. Taking our lumps as we grow is how we learn. So long as we use those experiences to get better, then it smooths the ups and downs that every business goes through.

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— Jayson Rapaport, co-founder and co-owner of Birds Barbershop, a brand of salons that markets affordable, high-quality cuts and color services. The company recently launched a line of hair care products.

3. I see running as business as running a marathon. There are going to be ups and downs, but to stay energized throughout you have to mitigate both. When you’re in an upswing, keep your energy focused down on moving ahead and always improving, and on a downswing keep your energy focused in the exact same place. If you let yourself get caught up in your own hype, you’ll exhaust yourself with all of the ups and downs.

— David Simnick, co-founder and CEO of SoapBox Soaps, a maker of all natural, handmade soaps that donates soap products to children in need.

4. Having a long-term mission that matters — in our case it’s reducing crime in communities. This helps keep myself and the team centered. We are not building a business for today; instead, we’re working step-by-step toward a 10-year goal that we believe will make a real difference in the world.

— Jamie Siminoff, CEO and chief inventor of Ring, the maker of the Ring Video Doorbell which allows users to answer the door from anywhere via smartphone.

5. Remembering how BucketFeet started, how far we’ve come and what our goals are now. It is easy to get frustrated and overwhelmed when trying to grow a company from that first vision to a major brand. We started BucketFeet with the idea that art should be for everyone, and it is so helpful to go back to that mission in the tough times — keeping alive that same excitement and passion as when we were just beginning is key.

— Aaron Firestein, co-founder and chief artist of BucketFeet, an online retailer that collaborates with artists to design and create footwear.

6. That’s easy: it’s my team. I feel lucky to be surrounded by passionate, smart, humble, and driven individuals. Everyday I am impressed by their commitment and work ethic.

— Olga Vidisheva, founder and CEO of Shoptiques, an e-commerce destination that sells goods from local boutiques.

7. Seeing the teams I’ve built solve problems and be successful. This along with keeping a relentless focus on our company’s purpose and goals has been critical to helping me navigate the highs and lows of being at the helm of one of the fastest-growing food companies in the country.

— Gautam Gupta, co-founder and CEO of NatureBox, a monthly subscription service that delivers healthy snacks.

8. I’m honored (and awed) that over 200 great people have joined me here at Namely. These are hard working, committed, and driven people who have dedicated countless hours to our success. When things get tough, I think of them. They believe in Namely, and that motivates me to build a great workplace where we can be successful.

— Matt Straz, founder and CEO of Namely, a cloud-based platform that helps businesses manage payroll, benefits and other HR needs.

STR 011: A Honest Insight into the Ups and Downs of Trading

Winning 80% of the time does not mean you will make money. This valuable lesson comes to us thanks to the blunt honesty and transparency of today’s guest, “ZenTrader”. His highs and lows as a trader provide many situations that I’m confident many of you listeners will be able to relate to. While “talking wins” is certainly the more exciting topic and marketing point, today’s discussion revolves around the importance of risk management… a much less attractive topic, but one of the utmost importance.

Notes:

  • Zen decided to take his tax return for the year and put it to work in the market. He was lured into the large gains penny stocks are known for making and decided to find some traders to follow.
  • After finding initial success, he attempted to day trade and even with an 80% win rate, his losses were much larger than his wins and that is when he decided he needed to delve deeper into technical analysis.
  • Zen found himself in a vicious circle of puppet trading others successfully and then taking losses when trading on his own. He would alternate between those two types of trading for some time before deciding to get educated.
  • After listening to a recommendation to check out options, Zen spent time practicing and perfecting his methods to find what strategy works best for him.

Quotes:

  • “At one point I was looking at 24,000 from 2,000. I thought to myself, I don’t want 24,000 , I want 200,000.” tweet this quote
  • “I would purchase at what I thought was a support then promptly watched it fall through. I then decided to stop trading blindly.” tweet this quote
  • “I had a few successful trades and I didn’t need an education. I didn’t need anyone to tell me what to do. I was a trader.” tweet this quote
  • “Just using risk vs. reward and buying stuff when it makes sense seems to be working out a lot better for me.” tweet this quote
  • “You can’t learn how to be disciplined. You can’t learn how not to be emotional. You have to train yourself to do that.” tweet this quote
  • Course: Penny Stock Survival Guide
  • Course: Options Trading Simplified
  • Twitter: NJZenTrader

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Reasons Why Forex Traders Lose Money

Michael Grabois/Getty Images

A commonly known fact is that most forex traders fail. In fact, it is estimated that 96 percent of forex traders lose money and end up quitting. The forex website DailyFX found that many forex traders do better than that, but new traders still have a tough timing gaining ground in this market. To help you make it into that elusive 4 percent of winning traders, the following list shows you some of the most common reasons why forex traders lose money.

Befriending the Market

The market is not something you beat, but something you understand and join when a trend is defined. At the same time, the market is something that can shake you out if you are trying to get too much from it with too little capital. Having the “beating the market” mindset often causes traders to trade too aggressively or go against trends, which is a sure recipe for disaster.

Low Start-Up Capital

Most currency traders start out looking for a way to get out of debt or to make easy money. It is common for forex marketers to encourage you to trade large lot sizes and trade using high leverage to generate large returns on a small amount of initial capital.

You must have some money to make some money, and it is possible for you to generate outstanding returns on limited capital in the short term. However, with only a small amount of capital and outsized risk because of too-high leverage, you will find yourself being emotional with each swing of the market’s ups and downs and jumping in and out and the worst times possible.

You can resolve this issue by never trading with a too-small amount of capital. This is a difficult problem to get around for someone that wants to start trading on a shoestring. $1,000 is a reasonable amount to start off with if you trade very small (micro lots or smaller). Otherwise, you are just setting yourself up for potential disaster.

Failure to Manage Risk

Risk management is key to survival as a forex trader as in life. You can be a very skilled trader and still be wiped out by poor risk management. Your number one job is not to make a profit, but rather to protect what you have. As your capital gets depleted, your ability to make a profit is lost.

To counteract this threat and implement good risk management, place stop-loss orders and move them once you have a reasonable profit. Use lot sizes that are reasonable compared to your account capital. Most of all, if a trade no longer makes sense, get out of it.

Giving in to Greed

Some traders feel that they need to squeeze every last pip out of a move in the market. There is money to be made in the forex markets every day. Trying to grab every last pip before a currency pair turns can cause you to hold positions too long and set you up to lose the profitable trade that you are trading.

The solution seems obvious here, just don’t be greedy. It’s fine to shoot for a reasonable profit but there are plenty of pips to go around. Currencies continue to move every day so there is no need to get that last pip; the next opportunity is right around the corner.

Indecisive Trading

Sometimes you might find yourself suffering from trading remorse. This happens when a trade that you open isn’t immediately profitable and you start saying to yourself that you picked the wrong direction. Then you close your trade and reverse it, only to see the market go back in the initial direction that you chose.

In this case, you need to pick a direction and stick with it. All that switching back and forth will just make you continually lose little bits of your account at a time until your investing capital is depleted.

Trying to Pick Tops or Bottoms

Many new traders try to pick turning points in currency pairs. They will place a trade on a pair, and as it keeps going in the wrong direction, they continue to add to their position being sure that it is about to turn around this time. If you trade this way, in the end, you end up with much more exposure than you planned, along with a terribly negative trade.

It’s best to trade with the trend. It’s not worth the bragging rights to know that you picked one bottom correctly out of 10 attempts. If you think the trend is going to change, and you want to take a trade in the new possible direction, wait for a confirmation on the trend change.

If you want to pick up a position at the bottom, pick up the bottom in an uptrend, not in a downtrend. If you want to open a position at the top, pick a top when the market’s making a corrective move higher, not an uptrend that’s part of a larger a downtrend.

Refusing to Be Wrong

Some trades just don’t work out. It is human nature to want to be right, but sometimes you just aren’t. As a trader, you just have to accept that you’re wrong sometimes and move on, instead of clinging to the idea of being right and ending up with a zero-balance trading account.

It is a difficult thing to do, but sometimes you just have to admit that you made a mistake. Either you entered the trade for the wrong reasons, or it just didn’t work out the way you planned it. Either way, the best thing to do is just admit the mistake, dump the trade, and move on to the next opportunity.

Buying a System

There are many so-called forex trading systems for sale on the internet. Some traders are out there looking for the ever-elusive 100-percent accurate forex trading system. They keep buying systems and trying them until finally giving up, deciding that there is no way to win.

As a new trader, you must accept that there is no such thing as a free lunch. Winning at forex trading takes work just like anything else. You can find success by building your own method, strategy, and system instead of buying worthless systems on the internet from less-than-reputable marketers.

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