Why 70% of lottery winners go broke
Did you know? Big lottery winners typically end up broke within a few years.
After hitting the jackpot, they tend to spend, give away, or "invest" their winnings in dubious business schemes.
In the end, most lottery winners end up right back where they started... with about 30% of them ending up in a worse financial position than before.
... Why is this?
Why do so many windfall-rich people fail to stay rich?
Because they haven't earned it
You see... there are no pre-requisites to getting rich.
Anyone can suddenly get a large inheritance, catch the eye of a millionaire partner, win a million-dollar lawsuit, or just happen to be holding on to a winning lottery ticket.
None of these people have earned the wealth that fell onto their laps.
And because they haven't learned the skills to make money, they don't have what it takes to keep it.
But what does this have to do with trading?
The 'trading system' misconception
Amateur traders tend to believe that once they find a "winning" system, they'll succeed in trading.
They think: once I find a winning system, I'll increase the trading lot size and make money!
The problem with this line of thinking, is that there's no mention about the capability of the trader.
Too many people worry about finding a winning system, without considering their capability of handling it.
Can you fly a helicopter?
If I put an Apache helicopter in front of you right now, would you be able to fly it?
If I gave you world-class medical facilities tomorrow, would you be able to perform open heart surgery next week?
Probably not. You might say that I'm being ridiculous to even suggest this.
And yet, this is what so many people expect to do in trading!
They keep looking for a magical "profitable system", without stopping to consider if they have the mental and emotional skills to operate such a system.
There are few shortcuts in trading
The blunt truth is, most people have neither the emotional fortitude nor the mental flexibility to operate a winning trading system under high-stress conditions.
When the going gets tough (and it will), they will fail to apply a trading system properly.
The good news is, you can train yourself to handle it.
And, as you might have guessed, the best way to get started is to trade with 1 micro lot and slowly increase the lot size from there.
As your trading lot size increases, you'll face new challenges that you haven't experienced before. Overcome these challenges, and your trading improves until you come to the next set of challenges.
In this way, as you increase the stakes (i.e. lot size), you learn more. Along the way, you'll develop your emotional and mental resilience you'll need to ultimately be a trader that can handle a winning trading system.
It all starts from 1
As an unproven trader, your priority now isn't to "make money".
Your priority is to develop skills.
And the best way to do that, is to start trading with 1 micro lot... then moving on to 2... then 3... then 4, and so on.
Along the way, you will learn valuable lessons that will all contribute to your ultimate goal to be a successful trader.
- Chris Lee
P.S. Have you seen my Forex Candlesticks e-book?