People want to earn but not learn
The issue is everyone wants to make money (well, maybe not everyone) but nobody wants to take the time to learn how to do it properly. This is NOT a sales pitch by the way! it's FACT!!
People often ask why I bash influencers so much, it's mainly for this reason. Majority of noobs, come into trading expecting to make a fortune. If only it was that easy, every man and his dog would be a professional trader.
Over the years, I have talked about things like Bots and AI that are programmed to make you money - think logically, if again it is this easy wouldn't the founders go to the bank, loan 10million based on their results and just not bother selling and shilling to customers and retail. NOBODY wants to provide customer service, especially to the world's population.
Unfortunately, regardless of the market. Trust me if you stick around long enough you get to see this behaviour in Forex, Commodities, Stocks and more recently crypto with a splash of A.I.
The story goes pretty much the same way. "man (or woman) hears about an opportunity to make money through a thing called trading, they do their research which leads to the old You of Tube and that leads to "Lamborghini promises from kids with fake watches, drawing random trendlines on 3 minute charts" There's often a "sign-up" bonus if you click their shill link.
So let's get this straight, they make money on watch time and those links you click.
The reason I chose fish in the image above, is that most people have memories that last about 2 seconds. Mark Cuban said "everyone is a genius in a bull market" Algorithms work and influencers claim to be experts with 3 months of experience. Easy to show in a market only going one way.
Trading is hard enough, let alone having the ability to lose money from scams.
If a trading algorithms promises a 90% win rate - run and don't buy it.
==============================================================
There are fundamental things to do and you can deploy to get you off on the right track. Firstly think of the obvious. 90% of new traders lose 90% of their money in only 90 days. Hence a 50% sign-up bonus whereby you think you gained "free cash" often has small print that you can't access it until you lost your original investment.
Affiliates tend to get 25% or more of the deposit - the exchanges know full well, your about to lose your money.
Second thing I try to emphasis for newer traders, is that you need to treat trading as a profession. You wouldn't watch a video and expect to be a doctor, you also wouldn't buy an algorithm or Artificial Intelligence software and expect to become New York's latest Hot Shot Lawyer You see where this is going?
There is no secret sauce, no silver bullet and no short cuts.
If you want to trade and make money trading, you need the basics. You need to keep doing the basics well and evolve your mindset more than a strategy. Areas that will really help you include proper risk management. If your willing to be sat in negative 20, 30 or even 50% equity positions. This won't take you long to lose your entire trading pot.
Instead risking 1-2% with a risk strategy of 2 -1 or greater. it's a slower game, but it keeps you playing the game. If you take a 3 or even a 4 reward trade with only 1 risk. For every time you are right, it's giving you 4 times as much as when you are wrong.
Imagine winning 20% of your trading days and still being at breakeven... simple 1:4 ratio.
This is only one small aspect to keep in mind.
As I mentioned above, if strategies or software is pitched with high percentage win rates - run. You need to understand the market acts differently and past results do not indicate future performance. Everyone is a genius in a bull market, remember.
You do not need to go looking for the silver bullet. These strategies do not exist, instead spend the time working on strategies that can be consistent in various market conditions. This is no small task, your strategy might identify entries in a counter trend differently than it would in say a ranging market.
The answer to resolve this, is BACKTESTING Don't just run your strategy on replay mode, although TradingView has a great little tool for this.
Spend the time to look at things such as "repainting" this means that when your strategy triggers an entry, does it disappear and reappear. If so, do some manual back testing. Then Dig deeper and analyse the type of market condition it was more profitable or less profitable. This could be things like "I lose more on a Monday, compared to other days" or when the market goes sideways, It triggers too many trades.
I've written several articles here on pure education. Here's a few examples.
In this post (worth clicking on) it has a whole bunch of lessons inside.
Think of trading like you would a university course, there's plenty to learn but you can have some fun along the way!
Stay safe!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
People often ask why I bash influencers so much, it's mainly for this reason. Majority of noobs, come into trading expecting to make a fortune. If only it was that easy, every man and his dog would be a professional trader.
Over the years, I have talked about things like Bots and AI that are programmed to make you money - think logically, if again it is this easy wouldn't the founders go to the bank, loan 10million based on their results and just not bother selling and shilling to customers and retail. NOBODY wants to provide customer service, especially to the world's population.
Unfortunately, regardless of the market. Trust me if you stick around long enough you get to see this behaviour in Forex, Commodities, Stocks and more recently crypto with a splash of A.I.
The story goes pretty much the same way. "man (or woman) hears about an opportunity to make money through a thing called trading, they do their research which leads to the old You of Tube and that leads to "Lamborghini promises from kids with fake watches, drawing random trendlines on 3 minute charts" There's often a "sign-up" bonus if you click their shill link.
So let's get this straight, they make money on watch time and those links you click.
The reason I chose fish in the image above, is that most people have memories that last about 2 seconds. Mark Cuban said "everyone is a genius in a bull market" Algorithms work and influencers claim to be experts with 3 months of experience. Easy to show in a market only going one way.
Trading is hard enough, let alone having the ability to lose money from scams.
If a trading algorithms promises a 90% win rate - run and don't buy it.
==============================================================
There are fundamental things to do and you can deploy to get you off on the right track. Firstly think of the obvious. 90% of new traders lose 90% of their money in only 90 days. Hence a 50% sign-up bonus whereby you think you gained "free cash" often has small print that you can't access it until you lost your original investment.
Affiliates tend to get 25% or more of the deposit - the exchanges know full well, your about to lose your money.
Second thing I try to emphasis for newer traders, is that you need to treat trading as a profession. You wouldn't watch a video and expect to be a doctor, you also wouldn't buy an algorithm or Artificial Intelligence software and expect to become New York's latest Hot Shot Lawyer You see where this is going?
There is no secret sauce, no silver bullet and no short cuts.
If you want to trade and make money trading, you need the basics. You need to keep doing the basics well and evolve your mindset more than a strategy. Areas that will really help you include proper risk management. If your willing to be sat in negative 20, 30 or even 50% equity positions. This won't take you long to lose your entire trading pot.
Instead risking 1-2% with a risk strategy of 2 -1 or greater. it's a slower game, but it keeps you playing the game. If you take a 3 or even a 4 reward trade with only 1 risk. For every time you are right, it's giving you 4 times as much as when you are wrong.
Imagine winning 20% of your trading days and still being at breakeven... simple 1:4 ratio.
This is only one small aspect to keep in mind.
As I mentioned above, if strategies or software is pitched with high percentage win rates - run. You need to understand the market acts differently and past results do not indicate future performance. Everyone is a genius in a bull market, remember.
You do not need to go looking for the silver bullet. These strategies do not exist, instead spend the time working on strategies that can be consistent in various market conditions. This is no small task, your strategy might identify entries in a counter trend differently than it would in say a ranging market.
The answer to resolve this, is BACKTESTING Don't just run your strategy on replay mode, although TradingView has a great little tool for this.
Spend the time to look at things such as "repainting" this means that when your strategy triggers an entry, does it disappear and reappear. If so, do some manual back testing. Then Dig deeper and analyse the type of market condition it was more profitable or less profitable. This could be things like "I lose more on a Monday, compared to other days" or when the market goes sideways, It triggers too many trades.
I've written several articles here on pure education. Here's a few examples.
In this post (worth clicking on) it has a whole bunch of lessons inside.
Think of trading like you would a university course, there's plenty to learn but you can have some fun along the way!
Stay safe!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.