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Why we always widen our stop loss when DAY TRADINGVery important and basic rule with Day Trading. Always increase the stop loss when going short (sell) above the original stop loss. Always decrease the stop loss when going long (buying) below the original set stop loss. Reason: When the index touches the ASK or BID price (regardless of it actually trading there), it will get you out of your trade and hit your stop loss. So, don’t be afraid to increase the distance between the entry and stop loss. As long as the Risk to Reward stays above 1:1.5 – It’s fine. How much do I increase the distance between the entry and the stop loss? Notice what the spread is on the contract when you place your stop loss. So wherever you wanted to put your stop loss originally, add the spread on top of that and that is where you would place your NEW stop loss. Maybe 20 – 30 points is safe. But other times it could be up to 50 points
JSE:J200Education
by Timonrosso
The Power of Trading Tunnel VisionAs humans. It’s tough. In this day and age, it feels impossible to just focus on one task at a time. You’re already shifting your attention. As you read this! You’re thinking about: What to eat, what you’re missing on Facebook, how boring this article is going to be, what’s on TV tonight, bills you have to pay, how else can you make bread for your financial future. Right? You can’t help it. It’s a disease. It’s affecting most people. It affected me for most of my life. And I think it’s one of these reasons why people are: NOT happy, NOT succeeding with their goals and NOT building their lives the way they want to. It needs to stop TODAY! Just do me one favour… Try and focus on one goal at a time. Get through this article first, move onto the next thing. Think of a racehorse. For them to be focused, avoid danger, remain undistracted and see the goal… They need to wear blinkers. So let’s put on our blinkers and let’s see why tunnel vision is the very skill you need to succeed. Not just with trading. But with every endeavour you embark to achieve and succeed. #1: Sharper Focus Tunnel vision allows you to concentrate and direct your attention to one thing at a time. Your analysis. Your setups. Your execution. Your modifications. Your reporting and reviewing. #2: Less distractions When you cut out your distractions, you will make more better decisions as a trader. It’s a skill. Put your phone away. Close your social media windows right now. Clear your desk and cupboards. Take the dog or cat out. Switch off the TV. Focus on your trading each day or when you do trade. #3: Better Risk Management When you are just about to take the trade. Make sure you double check your maths, volume trading size – according to what your portfolio is currently valued at. You don’t understand how many people make mistakes with: Wrong sizes, miscalculated levels and incorrect risk and reward. Protect and safeguard your trades with careful risk management consideration. #4: Speed up results and optimise your tasks: When you focus on one task at a time, this might be surprising but. You will finish sooner than you thought. When you put in your full – time, capital, and mental energy – you’ll be more efficient, productive and more laser focused. #5: Reduced Stress Of course when there are less distractions, less worry and less things to deal with at a time – this drops your stress. And I know you have stress right now. It’s the state of the world with the fast-paced connectivity and exponential developments. But when you narrow your life down to one thing at a time, I promise your stress will drop which will help with your trading decisions. #6: Superior strategy understanding By concentrating on a particular strategy or system, you will find that you’ll build a more profound understanding to where, why and how you’re putting your money. Master the strategy and only that one and you’ll see how far you’ll go. #7: Consistency and perseverance When you adopt tunnel vision in your life, you will begin to be more disciplined with your approach. This will lead to more consistency in your trading results. And you’ll find it will promote a stable growth of your portfolio. #8: Clearer Goals to achieve Like the horse sees the goal ahead. When you focus your attention on your goals and what you need to do to achieve them, one step at a time. You can track your progress more effectively. You can steer your trading in a better direction. You can take control of your trading with lightning focus. #9: Keeps you in the Now Time is fleeting. Before you know it, you’re in bed ready to wake up and repeat the routine. But what if, because you’re living so much in your head, that’s why time is going so quickly. I mean, right now I am only focusing on writing this article. And I’m putting in all my heart, energy and soul. And because there are no distractions, I FEEL the present. I feel time going slowly with each typing. So maybe you should to. Do everything in the present. Do it with full focus. Do it with heart. Do it with optimism and care. And this will have a positive effect on your trading.
TVC:SA40Education
by Timonrosso
Why MOST Traders QuitI have said this many times. You only lose when you quit. Until then you’re either earning or you’re learning. But the issue is majority of people quit trading. And it goes far beyond just money lost. I say that because the essence of trading is playing with money you can afford to lose and you can psychologically handle. Right? So, it goes beyond money. If you’re thinking of quitting trading, first give this piece a read and let’s identify the cause and it might help you to carry on. You’re closer today to achieving your trading goals than yesterday. The Pitfalls of Financial Trading REASON #1: They blew their account by risking too much One of the primary reasons why many traders ultimately quit the financial markets is the common mistake of blowing their trading account. There are three main reasons you blew your account. You risked far too much on certain trades. You did NOT adhere to strict money management principles. Your portfolio was tiny (Under $1,000) to start off with. So the costs, the brokerages, the margins were all too much. It’s like flying a plane at a low altitude hoping you won’t strike a mountain. REASON #2: They keep adapting losing strategies based on non-tested methods Another reason for you to abandon your trading is this. Your methods, strategies and systems are losers. If you back and forward test, it yields negative results. So, technically the system is achieving what its numbers are in a way. I’ve back tested a LOT of strategies in my youth. 100s of thousands of parameters, indicators and criteria. And 89% of them were just plain losers. Don’t think by logic, that the system will work. Don’t think by a few months, will dictate a systems complete and eternal performance. Don’t just follow a trader’s strategy and adapt to your own without any backtested results. Without proper testing and evaluation, you are at risk of adopting strategies that are based on faulty assumptions or rely on limited historical data. REASON #3: They go against their strategy as their ego takes over and they lack confidence Ego is a dangerous trait to have as a trader. And with you feeling like you know better than the market and deviating from your plan, is a recipe for disaster. Do it once, you’ll do it again. Do it a few times, and you’ll get right back on that emotional roller coaster that comes with trading. And it will grow and infect your trading as it will lead to even more impulsive actions and irrational decision-making. Your confidence will get shot. Your vibrations within yourself will be depro and will reflect onto your trading performance. The psychological pressures associated with trading can magnify the impact of losses and amplify self-doubt, ultimately push you out of the game. REASON #4: They can’t weather through drawdowns NOTE: Drawdowns, which refer to the decline in a trader’s account value from its peak, are an inherent part of trading. Here’s something funny. When you go through good times with trading, it almost feels normal. And you can go through 6 months of great upside for your portfolio. But when that one or two months drawdown kicks in (inevitably it will), time feels different. It feels like an eternity of failure and with the feeling of you’re never getting out of this.. Unfortunately, many traders find it challenging to cope with these challenging phases, leading to frustration and ultimately quitting. Am I right? Well as my friend and great colleague Igor said to me: Your biggest winning streak and your biggest drawdown is still to come. So you might as well embrace it with strict money management principles along the way. Successful trading comes with the ability to easily withstand drawdowns and navigate through extended periods of market downturns. Also, psychologically you may find as a new trader that when you endure through longer periods of downside in the market, it can be both mentally and emotionally draining. Extended periods of drawdowns can cause a few problems: It can erode a trader’s confidence It can take away their optimism It can make them feel envious over other traders who are winning It can demotivate them to carry on It can cause them to make irrational decisions It can lead to over trading and revenge trading It can make them quit. They find the next “best” thing, onwards to the next holy grail (which never arrives). REASON #5: To continue the pursuit of the next “best” thing People follow where they think the quick money it. They are constantly on the quest to find their holy grail. Sure, trading isn’t for everyone. And Yes trading is the hardest and most easiest way to make an income. But, you seek will also require a ton of research, psychology, sacrifice and time. Nothing of high reward comes without a degree of risk. Bigger the reward, greater the risk. Or everyone would make a ton of money, right? So don’t fall into that trap of jumping to the next lily like a frog… Traders who constantly search for the next big thing end up chasing elusive dreams instead of focusing on developing their skills and understanding the markets. The reality is that there is no magic strategy that guarantees success in trading. The markets are ever-changing, and what works today may not work tomorrow. It is important for traders to recognize that trading success is not about finding a secret shortcut or relying on external factors beyond their control. It is about continuous learning, discipline, and a willingness to adapt to changing market conditions. Develop your robust trading plan, manage your risk effectively, and stay focused on long-term goals. Those factors alone will keep you on the right quest to trading well.
TVC:SA40Education
by Timonrosso
1
Why you DID NOT take the trade - 4 REASONSSo you never took a trade again? This could be where the problems are rising. It’s also where you are probably missing out on what could help take your portfolio out of the drawdown. And sometimes, despite favourable market conditions, you may find yourself still hesitating to enter a trade. I want to explore four common reasons why traders fail to take the trade and how to overcome them. #1: The market moved too much One of the most common reasons traders hesitate to take the trade is that… The market has already moved significantly, and they fear they have missed the opportunity. However, it’s important to remember that the market is constantly in motion. The train will move and there is always an opportune moment to get into a trade. A sound trading strategy should take into account different market conditions, including volatile ones, and provide clear entry and exit points. If the market lines up despite how high or low it’s gone. Just take the trade. #2: You’re scared to lose the trade FOLO or Fear Of Losing Out is another common reason traders hesitate to enter a trade. While it’s natural to want to avoid losses. It’s important to remember that trading involves risk, and losses are inevitable. A sound risk management strategy, including setting stop-loss orders and managing position size, can help you to minimize potential losses and build confidence in entering a trade. #3: Too much money to spend Traders may also hesitate to enter a trade if they feel they have too much money to spend. Take oil for example. Most market markets (brokers) offer you to buy Brent crude but you have to buy 100 contracts as a minimum. In this case, it MIGHT be too much money to spend. Not because of how much of your portfolio you’re using up, but also because the risk might outweigh 2% of your portfolio. Then you get other markets like the JSE ALMI 40, where you’ll need to spend around R9,000 to enter a trade. It sounds like a lot (especially if your portfolio is less than 10,000. But, that’s why one should start with a larger minimum account size. I started with R30,000 in 2003 and even then it was too little to grow into a substantial amount. Then when it grew to the first R150,000, I started feeling comfortable with the portfolio size and it opened more opportunities to trade additional markets. So, that’s why if you want to take trading seriously, you got to cough up the cash into your portfolio and trade accordingly to strict money and reward management. #4: No trust in the system yet This one is a given and the most abundant reason to NOT take a trade. You might hesitate to enter a trade if you don’t have faith or confidence in your trading strategy or system. In this case, it’s essential to go back, review and test the strategy, ensuring it aligns with personal trading goals and is backed by sound research and analysis. When you build trust in a trading system, and you take the time and patience to see the good and the bad, then your confidence will grow. And that will be an essential step towards taking more trades to help grow your portfolio. Why don’t you take trades when you should? Is it because: You don’t trust your system You’re scared to lose money You don’t trust certain markets You don’t have enough money to trade different instruments You’re not ready with your strategy You don’t have confidence with yourself, discipline and emotions yet? Find them, harness them, work on them and you might have your answer.
TVC:SA40Education
by Timonrosso
When you’ve taken a trade – Let It Go!One of the key principles of successful trading is… Once you have taken the trade to just let it go and allow it to run its course. The system lined up – tick. The entry orders are all in place – tick. It matches your risk and reward criteria – tick. You know your trade size – tick. Now let it go. You may get the urge to interfere, change the levels and lock in profits early or limit losses even more. You need to resist the urge. Here are some factors to consider… Don’t Interfere… When you’ve taken a trade, it’s important to have a plan in place for how you will manage it. This means you’ve got your entry, stop loss and take profit in place. These actions may seem like a good idea at the time. But they can often lead to bigger losses, smaller profits and even missed opportunities. But then there are times where you need to adjust the course. You might even have a time stop loss. Or a strategic and mechanical criteria for when to adjust your levels. But other than that, you need to have the discipline to stick to it and resist the temptation to interfere with your trades. Don’t Get Excited When It’s in the Money One of the most common mistakes that traders make is getting too excited when they’re in the money. You might feel overconfident and “know-better” about a trade. Or you might have this irrational decision-making idea to quickly move your stops and take profits, which can quickly erase any gains that you’ve made. It’s essential to remain level-headed and stick to your plan, even when your trades are performing well. To avoid getting too excited when you’re in the money, go back to your journal and look at how your trades have played in the past. It’s important to have a clear idea of your risk tolerance and profit targets before you enter a trade. This will stop you from making any quick and unnecessary decisions along the way. Don’t Fear When It’s Going Against You Another common mistake that traders make is letting fear dictate their decisions when a trade is going against them. It’s natural to feel anxious when you’re losing money. But it’s important to remember that losses are a normal part of trading. We all take them and we are all bound to take them more times than we wish to think. To overcome the fear of losses, it’s important to focus on the long-term goals of your trading strategy. One way to do this is to maintain a positive mindset and view losses as “costs of business” and as learning opportunities rather than failures. Stay calm and level headed. Also stop risking so much that it interferes with your psychology. When you feel emotional take a step back or it could lead to even bigger losses. Don’t Watch Every Tick Finally, it’s important to resist the urge to obsessively watch every tick of the market. This can lead to overtrading and emotional decision-making. And you’ll find it will quickly derail your trading strategy. Instead, it’s important to focus on the big picture and have a long-term perspective on your trades. Close your computer once you’ve taken a trade. Or close your trading platform and move onto something else. You’ve done your job now stop watching every tick the market moves. By doing so, you’ll be less likely to make rash decisions based on short-term fluctuations in the market. I hope this helps and if there is one thing to remember out of them all. When you’ve taken a trade, just let it go and let it run its course.
JSE:J200Education
by Timonrosso
1
Gym Well - Trade Well!When you gym well, it’s like trading well. You gym to tone, to lose weight to build muscle and to build discipline. With trading you trade to build your portfolio, build confidence, create a secured financial future and work on your mindset for life. Both pursuits require consistent effort, perseverance, and a strategic approach. Gym is an important element in my life and so I want to explore the similarities between trading and gymming, and how each can lead to success in their respective domains. You Put in the Work Every Day: Gymming and Trading Like a regular gym routine, successful trading requires dedication and consistency. You can’t expect to see results overnight – you need to put in the work every day. As a trader you must constantly educate yourself on market trends, stay informed about global events, and analyze past performance to make informed decisions. Just as gym-goers must adhere to their workout schedules, traders should establish a daily routine that involves researching and analyzing the market. You Pick Up the Portfolio (Weights) as You Make More Money When you gym, you gradually increase the weights you’re lifting to build strength and endurance. Similarly, as you become more experienced and successful in trading, you can gradually increase your investment portfolio. As your confidence and financial gains grow, you may choose to diversify your portfolio and take on a variety of different assets to spread risk, lower risk, optimise and maximize your returns. Don’t Overtrain – Don’t Overtrade Overtraining at the gym can lead to injury and burnout. And if you over trade in the market, it can result in financial losses and emotional exhaustion. It’s essential to strike a balance between staying active and giving yourself time to rest and recover. In trading, this might mean you: Set your limits on the number of trades you make each day or week Identify the goldilocks zone risk per trade Know when to hault trading or lower risks during a drawdown period. And most importantly. Remember, trading is a marathon, not a sprint. So pace yourself accordingly which is crucial to long-term success. It’s a Forever Process (Takes Time) Both gymming and trading are long-term commitments. You won’t see immediate results in either pursuit. It takes time and dedication to achieve your goals and to identify your trading risk and personality. In the gym, you can expect to see gradual improvements in your strength, endurance, and overall fitness. In trading, you’ll gain experience, knowledge, and a more refined strategy as time goes on. So stay dedicated, and you’ll be well on your way to achieving your goals. Let me know if you gym and if it helps your trading :)
JSE:J200Education
by Timonrosso
2
BIG TIP OF THE DAY - Ride Winners and Cut losers BIG TIP OF THE DAY: If you want to ride up winners, lock in profits and reduce losers here is what to do. 1. Place your Entry Stop loss and Take profit (But have a TP 2 and TP 3 in place). 2. When the price approaches TP 1 (Close half of your position and move your stop loss to Breakeven) 3. When the price hits TP 2 (Close half of your position and move your stop loss half-way) 4. When the price hits TP 3 (Close your entire position). This is how to ride your profits and winners.
TVC:SA40Education
by Timonrosso
5 DONT'S TO be a Better TraderWe know what we need to do to be a top trader. On the method side – we need the right markets, to trade the right strategy by following proven rules and criteria. On the mind side – we know we need to adopt a strong will, with discipline, passion and pure integration. But what about the DONT’S? What mustn’t we do during the process of becoming a successful trader? That’s the question we’ll address today. #1: DON’T fear losing Losing is part of the process. The trick is to lose (risk) little and make up for it during the conducive times. All trading strategies are not 100% market proof. This means, every strategy will reach a difficult period where the market environment does not gel well with your system. I lose 37.5% of my trades. I’ve been losing this percentage of trades for the last two decades… And you know what… I love it. I love the fact, how there’s a balance with my system which leads to a level headed and content approach to trading. Don’t fear losing – embrace it and OWN it. You only fail when you quit. #2: DON’T dwell on past failures Whatever trading process you’ve endured i.e. You blew a couple of accounts. You keep losing to bad strategies. You keep going against your strategy which hurts your account. This was and is your journey, time line and experiences that will turn into wisdom which will help you to excel with your trading… Just like we learn in life not to regret and not to carry our heavy weighted past on our shoulders, so to mustn’t you do with trading. Don’t dwell on your failures – because it’s those experiences that will help you flourish #3: DON’T expect fast riches With high reward comes higher risk. We are not in the risky business. And I sure as hope you don’t want to stress, worry and live on a high adrenaline knowing you can lose everything – trying to get rich quick fast… Right? Instead, you must want a get rich slowly BUT surely method. #4: DON’T compare yourself to others Big one… Sure, there are a few (not many) but a couple of traders who are doing extremely well for themselves. They probably don’t have it in their DNA to commit hours a day to helping others achieve the same – which is fine… But they all took the necessary steps, time, blood, sweat and fears to get to where they are. Just like you are going through your trading endeavours. Don’t worry about what others are making. Don’t worry about how many winners he took or how little losers she took. Don’t stress over his 70% win rate system or her “hasn’t taken a single loss in 2 months” system. You should have everything you need right in front of you. A computer An internet connection A broker (with a charting and trading platform) A proven and tested trading system Time Keep to your time line and don’t worry about what others are doing… When you compare, you lose track and focus on what you need to achieve your goals… #5: DON’T give up You are closer today than you were yesterday. And tomorrow you’ll be even closer (despite having a good or bad trading day). Money, you can always make back. Wisdom is something you only learn through experience. It’s nothing you can teach someone, but something you can keep them aware of – for when they go through it… So keep grinding, and keep at it… Perseverance my friend… That’s the key. Enough for today… Let’s sum up with the 5 DON’TS to become a better trader… #1: DON’T fear losing… #2: DON’T dwell on the past failures #3: Don’t expect fast riches #4: DON’T compare yourself to others #5: DON’T give up
TVC:SA40Education
by Timonrosso
What would happen if Russia pegged the Chinese yuan to gold?If Putin goes ahead with pegging the Chinese Yuan to gold instead of the US Dollar a number of things can happen. Factor #1: US Dollar will be challenged This will for the first time, challenge the US dollar's status as the world's dominant reserve currency. People may look to invest elsewhere, which could cause instability. Factor #2: Domino effect There could be an effect where other countries may follow suit and start pegging not only YUAN but maybe even their currencies to gold as well. Factor #3: Yuan could be the next reserve currency This move could be the start of Chinese yuan’s step to power and control. It could get to the stage where the value of the yuan would be determined by the price of gold, rather than the value of the US dollar. Factor #4: Demand will pick up and other countries will hold gold This move could result in countries increasing their gold reserves, which could lead to a further increase in the demand for gold. The demand for gold would increase, which could drive up the price of gold in the short term. Factor #5: Bad for the US dollar The US dollar would likely depreciate against other major currencies, such as the euro and yen, as investors shift their focus away from the dollar. The US would face increased competition in international trade, as other countries begin to use the yuan as a reserve currency instead of the dollar. Factor #6: More power for China China's economic power would increase, as it becomes more closely tied to the global gold market. Factor #7: Strong partnership between Russia and China Not only will Putin and Xi be making more crepes together, they will also be making more gold. The move would also strengthen Russia's position in the global financial system, as it becomes a key player in the gold market. Factor #8: The shift of the New World Order The stability of the global financial system would be threatened, as it adjusts to a new world order with a different reserve currency. Also the move could lead to increased geopolitical tensions, as countries jostle for position in a new world order dominated by gold instead of the US dollar. Have I missed anything?
COMEX:GC1!Education
by Timonrosso
2
6 Rules of Successful TradersI’ll tell you this. The money you desire, is not going to just fall into your lap. If you want to be a successful trader, you need to write down the ground rules to get your as$$into gear. I can’t profess for every professional trader, but I can share with you my rules I’ve been following for the last 2 decades. Feel free to write them down for your trading. RULE 1: Always have a trading plan This is a must. The financial markets are dangerous. Once you enter them, you are playing with the big boys. If you go in blindly or naked (without risk levels in place), prepare to be caught with your pants down. You need your game plan in front of you at all times. There needs to be criteria you’ll follow from when you switch on your computer to when you close it. RULE 2: Don’t procrastinate Trading is like waiting for the next train. Wait too long and you’ll miss your train. You’ll then have to wait an unnecessary extended period of time for the next one. When your trading plan fires a signal – FIRE. When your trading plan fires an adjustment move – FIRE. You are only fooling yourself, if you don’t act when you need to. RULE 3: Be patient There are two important factors to patience. First, never rush into getting into a trade for the thrill, excitement or revenge! Second, never rush at getting out of a trade if it has not hit one of your trading levels. Patience is where you will grow your portfolio. Say that out loud… Patience is where you will grow your portfolio. RULE 4: Take the trade If I made a T-Shirt I think I would have one just saying. “Just take the trade” Repeat after me! If all is lined up and ready to go. It doesn’t matter what fundamental factor or news event is going on. It doesn’t matter how you’re feeling or that you have a headache. Just take the trade when your plan tells you to. It will take you 30 seconds. Then close your laptop and go rest. RULE 5: Keep learning With technology advancing, financial instruments changing, market dynamics shifting and with the world evolving… You need to keep learning and updating your knowledge base. You never know if the new developments, will lead to a higher win and success rate. You never know if your system and trading will be optimised and maximised to a better performance, The onus is on you to keep up with learning… RULE 6: Don’t give up We all have our own time lines with trading. We are all on our own journeys, challenges and struggles. You only lose when you quit. So please, I beg you, don’t give up and you will thank me later… Let’s sum up the 6 rules quickly for you… 1. Always have a trading plan 2. Don’t procrastinate 3. Be patient 4. Take the trade 5. Keep learning 6. Don’t give up
TVC:SA40Education
by Timonrosso
ROADMAP from COMFORT to GROWTHMost people take the easy road of being in a Comfort Zone. For this reason, they keep getting the same results and remain in their ‘uncomfortable’ position in life. Think about it… Those that don’t understand new things, never adapt to something that could change their life for the better. Those that keep earning the same old salary, never grow their retirement kitty to the level they wish. Those that never throw things away, end up cluttering their life with the old. Trading is no different. It requires you to step out of your comfort zone in the beginning, to create something that can change your life. Besides, great things never came from being in a comfort zone. Let’s talk about the stages required to become a Growth Trader. ZONE 1: COMFORT This is where most people stay. They don’t take the necessary steps to open a trading account, fund it and grow their portfolios. Instead, they stay in a feel safe and in control of their non-growing finances. I still have people who’ve followed me for 15 years, and haven’t taken ONE single trade. You need to jump out and take action. ZONE 2: FEAR When you have finally decided to take a leap of trading faith, a whole bunch of new fear with encompass your mind. Will I lose money? Will trading work for me? Will I be able to follow a strategy each day? Will I be on time to trade the markets? What if the market environment is not conducive when I start? Harness this fear, because it means one thing… CHANGE IS COMING… ZONE 3: LEARNING Every loss, gain, rule is a lesson and adaption to entering a NEW zone. Every challenge you face, is one less challenge you’ll need to deal with in the future. Every difficulty you experience is a skill that you’ll acquire for trading. The more you learn about the technical and fundamentals of the financial markets, the higher the level of experience and wisdom you’ll gain as a trader. The learning phase is imperative to achieving success in any field… ZONE 4: GROWTH The accumulated lessons, experience, wisdom, actions and tribulations of repetitive actions – are the foundations to entering into a new comfort zone of GROWTH. The difference is… You would have taken the necessary steps to succeed and accomplish your trading goals. It will eventually reach the point, where the above zones will help you enter into a conditional and automatic process into your life where trading is nothing more than a continuous habit. Once the fear, thrill and uncertainty are removed – only then you’ll realise that the initial comfort zone of inactivity was the uncomfortable phase that took you nowhere… Life begins at the end of your comfort zone. Read that last sentence again.
JSE:J200Education
by Timonrosso
5 Choices you Make as a Trader - THIS Or THATFrom the second you turn on your computer, to the time you press buttons commit your funds into your trades and close your computer. You are making your own choices. Do you choose this? Do you follow that? Do you go against this? Do you type that? So technically, your financial future success lies all in your fingers. In this TradingView piece, you need to ask and answer what choices are you prepared to make – to turn your life around as a trader. CHOICE #1: Sleep until noon – Wake up early If you’re a position trader (trade once per week or so) like me, then you’ll know profitable opportunities knock VERY slowly. You can wake up late, open your trading platform and see a missed trading opportunity just like that. Or you can set your alarm, wake up to check the markets to confirm if there is a trade lined up or not. DON’T MISS YOUR TRADING OPPORTUNITIES! CHOICE #2: Only trade your starting portfolio size – Deposit money each month Let me be frank. R5,000 isn’t going to turn you into a millionaire. R20,000 isn’t going to turn you into a millionaire. I’m sorry but it has to be said. You need to find a way to keep depositing a bit of money into your trading account each month. Whether it’s 5% or 10% of savings, the more you deposit each month – the faster your portfolio will grow as you have more to make money from money. CHOICE #3: Go against your strategy – Follow your strategy I know it’s tempting to want to go against your strategy. You want to move your take profit, stop loss, you want to buy more. You want to take some money off the table. The problem is – make this choice and you’ll set a dangerous precedent. It will be the start of going against your strategy the next time and eventually, you’ll only be trading with discretionary (self) which I need to remind you is… A COMPLETE LOSING STRATEGY! The stock market doesn’t work on emotions. It doesn’t think and it doesn’t feel. So why should you? Keep to your proven and profitable trading strategy, and the profits will yield as your system has shown you time and time again. CHOICE #4: Learn and then drop the E – Try to earn and drop the $ Trading is a forever learning business. You need to learn how the markets work. You need to learn how the trading environments operate and when they are favourable or unfavourable to your strategy. You need to learn WHICH are the best instruments to trade. Which are the most reliable and secured brokers. Which trading platforms are up to date with technology. What NEW markets there are to utilise and profit from. The list continues. Please follow your own learning time line as a trader and then you’ll find it will all be worth it. CHOICE #5: LATER – NOW! I still get people who send me messages like… “Timon I’ve been following you for 15 years and haven’t started trading yet, what do you suggest?” Simple! Get out of your comfort zone, stop being lazy and take the necessary steps to start your trading journey. 15 years! You could have had all the experience you needed by now. You could have gained important lessons to build your portfolio. It’s all on you. The best time to start is NOW! There is no past (as it already happened). There is no present (as it automatically becomes the past). There is no future (as it’s still to come). So all you have is an infinitesimal photo shot of time called NOW! Got it? Make your choices and materialize your trading into the reality you’ve desired.
JSE:J200Education
by Timonrosso
TEST: Is Trading for you? Trading is NOT for everyone. Not because they can’t do it, or because it’s hard – but rather… Trading is something that only a few will feel passionate to do for the rest of their lives… I say this because there are many things that I could do well in, make a huge income from, but I unfortunately don’t enjoy. For example, Poker, horse-racing and sports bets, real-estate, portfolio manager, business consultant… Don’t feel ashamed nor feel something is wrong with you. Instead, embrace your personality and work towards what is your OWN calling and passion. In this TradingView article, well find out if trading is for you… Out of 15 things I’ll mention today, write down YES or NO for each one… Let’s go… YES or NO? Are you a good decision maker? Are you proud to be called a financial trader? Do you enjoy looking at charts and indicators? Can you handle a bunch of losing trades in a row? Do you have the will-power to trade every week? Do you enjoy reading fundamentals with markets? Can you handle losses on a weekly / monthly basis? Do you enjoy learning more about local and global markets? Is it in your personality to deal with short term market moves? Do you have the ability to NOT listen to other people and the news? Do you have the patience to wait for the market to hit your trading levels? Can you follow strict criteria without steering away from your proven strategy? Do you enjoy looking up statistics and probabilities with portfolio management? Are you able to deposit a portion of your savings into your portfolio each month? Do you have the discipline to follow and improve one trading strategy in your life? If you counted less than 10, the big question is… Do you think you can train and educate yourself to fix those items and turn them into yes’s?
JSE:J200Education
by Timonrosso
Don't be a still trader!“Timon, I’ve been following your trading tips for the last 12 years and I STILL haven’t taken my first trade." But I will soon trade... Soon? Like tomorrow? Next week or in the next 12 years? Procrastination is the thief of time. I hate clichés but I love that saying. #1: STILL not ready for losses I think most people don’t want to take losses. They are seen as small failures or small fractures to a person’s pride and bank account. Whether you’re running a business, a household or a trading portfolio – there are going to be oopsies. So how do we deal with the idea of taking losses? Well, don’t think of them as losses. Think about them as costs… When you run a business you have to pay costs – equipment, stock, admin, salaries, legalities etc… When you run a household you have to pay costs – electricity, water, take the trash out, taxes and repairs. When you run your trading account you have to pay costs – Losing trades and drawdowns… You pay costs with everything in life, and so it shouldn’t be any different with trading… Instead of calling them losses – call them ‘costs of trading’. Helpful? #2: STILL no right system This one is common. You don’t know what the right system is for you. You’ve tried a couple of moving averages, indicators, price action even volume. Nothing seems to work for you yet… I don’t have a correct answer for you, but I can tell you with how I found my system. I wanted something that didn’t require too much thinking, little indicators, worked on all time frames, was easy to back and forward test and is timeless. And it took me years until I finally found a system that you see here in TradingView. So ask yourself exactly what you want in a system and drill down each detail that matches your current lifestyle and times… Just maybe, the answer will stand out for you better. #3: STILL Not making money Now this is ambiguous. If you end up positive for the year, you’re making money. If you’re not happy with how much money you’re up for the year, that’s different. It’s all relative. Step one is to make sure your portfolio is positive by the end of the year. Then it’s a numbers game as to what your portfolio should be to make more of an income. But first make sure you’re in the positive before you play with Mr Market. #4: STILL Making excuses The only thing I can add to this is the wonderful comfort zone of doing nothing. It’s safe, it’s consistent and we’re used to it. But if you are constantly thinking of wanting to trade and build your wealth on a regular basis – it tells me you’re ready but not ready to leave your comfort zone. You got to pull up your socks and just START. The hardest step to trading is taking your first step. I hope these tips will help you shake off the STILLness that’s lurking inside you, so you can achieve greatness.
JSE:J200Education
by Timonrosso
1
Why is trading NOT working for me?!Even with the right markets, time frames, systems, rules and ideas… Trading is just not playing out you the way you thought it would. It’s not growing your portfolio at the rate you wished… It’s taking forever to get right… It’s overwhelming and you don’t know which strategy to choose… From my experience this is because of one reason. You’re not treating trading for what it is… Let’s REMIND you… TRADING IS… A fun hobby Trading isn’t a tiring job where you need to sit for hours countlessly looking at a screen. It’s also not a job where you need to be cramped up in a cold room, sitting on an uncomfortable chair, wearing a suffocating ‘noose’ I mean tie, around your neck while you’re waiting for the next pay-cheque. If that was the case, I would have stopped trading 19 years ago. Trading should be treated as a fun hobby. With this hobby… You don’t need a lot of time (half an hour a week will do just fine). You don’t need a lot of effort. (Just a few click of the buttons and a few simple grade-8 maths calculations). You don’t need to worry and stress yourself out. (Opportunities come every day, you can manage your own risk and no one is watching over your shoulder.) In other words this is one opportunity which will give you: More free time, Less work and a hobby that will consistently pay you. TRADING IS… A patience game When you’re enjoying a hobby, you look forward to doing it the next day. It’s like anything you enjoy… Watching TV, playing sports, eating your favourite snacks or even having sex… You’ll adapt, incorporate and most importantly look forward to the next time you do it. And the more you do it, the more you’ll improve, the better you’ll get and the easier it will become. Trading is a patience game. The longer you spend the time and days working on it and improving, the faster, better, and more powerful of a trader you will become. And this will lead to one outcome – Financial Independence. TRADING IS… Ever evolving This isn’t your run on the mill, rat-race kind of hobby. This is one heck of an interesting, exciting and thrilling activity that changes so quickly. Every day, week, month and year you’ll to learn a ton of trading tips and lessons. That’s because the markets are always, changing, evolving, adapting and are even suprising… They evolve with: Ever-changing market conditions. New financial markets added to the exchanges. New created instruments to incorporate i.e. Crypto- currencies, ETFs, CFDs etc… New mega-trends driving new global demand i.e. AI, Machine learning, Electric cars, Cannabis, NFTs, Smart contracts and Extended Mixed Reality. TRADING IS… A lonely journey This is one hobby, where YOUR success entirely depends on YOU. This won’t work if you’re asking your family, friends, dogs and even strangers for their opinions on what to buy and sell. This won’t work if you’re listening to the random billionaire analyst on Bloomberg talking about what they have in their portfolios. This won’t work if you’re scrolling on Facebook for an individual’s trading prediction. (INCLUDING MINE). No! With your system, your money and your time – You need to trade alone and on your own terms… You know what will make you money? Taking more trades according to YOUR criteria. Listening to YOUR rules according to YOUR strategy. Spending more of YOUR time, improving on executing trades well. Notice the word YOUR… Not others, not him, not her – YOU… So take trading for what it is and enjoy the process. TRADING IS… A fun hobby TRADING IS… A patience game TRADING IS… Ever evolving TRADING IS… A lonely journey
JSE:J200Education
by Timonrosso
1
Don't let Captain Hindsight mess with your tradingCaptain Hindsight is bound to get in your head. Whether you’re just starting out or you’ve been trading for the last 10 years or so. He is going to question you with two simple words. And these two words, can really cause a negative impact on your trading portfolio. In this short article, I’m going to warn you about how he’s going to uppercut your mind and most likely cause havoc with your trading. This way, you’ll know what to watch out for. A dangerous two word question to interfere with your trading What if?” Here are some… “What if the market is in a bubble and I buy too high?” “What if I’m wrong about this trade?” “What if my trading strategy worked then, but won’t work now?” “What if the market is in a period where I’m just going to take losses?” Whenever the captain whispers these questions, you’re going to feel vulnerable and start second guessing your trading system, strategy and skills. Succumb to the Captain and he’ll be back stronger and more powerful than the last time. Here are THREE ways to beat Captain Hindsight before he returns ACTION #1: Extend your back-testing So you have a trading system that you believe works… Prove it. Go back and re-test different markets and jot down every time the system lined up. Record every trade, including the costs and the statistics and prepare yourself for what is to come. The more you back-test your system, the more markets and environments it would have weathered and endured. If it came out with all time highs on your portfolio, it’s a winner. Captain Hindsight – won’t have anything on you – with a decent track record… ACTION #2: Drop your risk The most common way for a trader to feel emotional, is when they have a lot to lose. The larger your trading position, the more desire to win and the more fear you’ll have to lose. This is why greed, fear and panic are the most ongoing reasons for traders to annihilate their portfolios. Trading is a get rich slowly but surely game. And when you accept the gains and losses, you won’t care what the Captain has to say. ACTION #3: Step away from the screen Not only will Captain Hindsight creep in before you take a trade. He’s bound to enter your mind while you’re in the trade. “What if you’re wrong about this one?” “What if you get out of your trade now while you’re in a profit?” “What if you take a small loss, because it looks like this trade is a loser?” The best action to take, when you’ve entered your trade with your trading levels (Entry, Stop loss and Take profit), is step away from your trading account. Distract yourself by getting a drink, water your garden, take a drive or do other work. The less you’re glued to the screen watching your trades, the less you’re going to feel worried about the small moves that happen in the day. Always remind yourself… “My trading strategy will REWARD me for following it. My trading strategy will PUNISH me for NOT following it.” These three actions will eventually help you beat Captain Hindsight for good, as it did for me over 20 years ago.
JSE:J200Education
by Timonrosso
25 Metrics to a Perfect Trading Journal First let’s begin with… What is a trading journal? This is a log book where you plot every trade you make with the metrics to show how your portfolio is performing and will continue to do so. I’m going to briefly list the items you’ll need to track your trading performance. 25 Items to plot in your trading journal… The trade No. The market traded (stock, index, crypto…) The entry date for your trade The exit date for your trade No. of days held Current portfolio value Max risk per trade (currency) Max risk % per trade Initial margin per instrument (CFD Spread betting) No. Volume traded The reason for entry Total margin paid Type of trade (Long / Short) Entry price Take profit price Stop loss price Closing price Risk in trade (Entry – Stop loss) Move in trade (close) Interest costs Brokerage costs Gearing Trade exposure (In and Out) Gross P+L Net P+L Don’t waste your time with calculations. Make sure you have the journal and log book with all formulas in each item. … When you record these details, you’ll be able to keep up to date with whether your portfolio is profitable and sustainable for the long run and where it’s lacking. Hope that helps!
JSE:J200Education
by Timonrosso
What is Holding You Back Trader?So you want to trade, but just not taking action. You’re on the computer and so close to taking a trade or opening an account with a broker. The button is right there. And yet, it feels like there’s a wall between your finger and the button. I get it. It’s a big step to take when you know you’re entering into uncharted financial waters. You know risk is involved… You know time is needed. And you know education is crucial. And yet you’re still hesitant. In this article, we’ll pinpoint what is holding you back from creating your financial freedom as a trader. REASON #1: You’re talking more than doing This is a big one. Maybe you’ve been reading trading and investing articles for years now. And yet, you keep finding excuses to not take action. 1. “I’ll start next month” 2. “I’ll wait for the market to correct before I trade” 3. “I’m stressed with work and family” Listen… Life is going to continue with new problems, stresses and issues. And this will extend your delays and increase the number of excuses you’ll make with any new hobby. You just need to start doing, and the rest will take care of itself. And you’ll find you’ll feel more accomplished and proud of the fact, you took action. REASON #2: You’re concerned of the short term Every trader I know wants their first trade and month to be profitable. I was the same. In 2003, I bought a bunch of Anglo Gold shares. I felt so much panic because I wanted it to be a winner. I didn’t think of the long term effects. Let me tell you, I don’t even remember my first winner. I’ve taken thousands of trades and I’ll tell you, the first trade is over looked and felt. When you have a proven trading strategy, you lose interest in what a few trades will do for your portfolio. You keep your eye on the long term rewards. REASON #3: You are scared of losing This is one humble game, where the market takes a little and gives back to you and then some. It’s all down to one simple method – Risk and reward. You’re in a calculations game now, where you need to lose in order to win. Embrace the losses and own them as you would with any business costs or overheads. REASON 4#: You’re waiting for the right time What does that mean? Are you waiting for enough money? You never start with a lot of money as a trader. You test, you learn and you gain experience. I guarantee you blow more money on a holiday, on petrol and at restaurants than the amount you’ll lose as a start up and humble trader. Are you waiting for the right time? There are thousands of markets that are either in uptrend, downtrends or sideways trends everyday. There is never the right time to get into trading. Why? Because it’s always the right time. REASON 5#: You’re too busy to start I’m sure this article has helped open your eyes to a new spectrum of reasons why you’re holding back. Stop talking, start doing. You do have enough money to start trading. You have more than enough time You need to lose, to win. Nobody is ever too busy to not pursue their dreams and create their freedom. Got it? So stop holding back and listening to some imaginary voice inside your head
JSE:J200Education
by Timonrosso
Risk Less money in Drawdowns. More money in winning streaksA drawdown is a period of decline in the value of a portfolio. This is where you take a number of trades, and the losses drop the portfolio at a marginal level (if you know what you’re doing). During these times, the market is typically more volatile (jumpy) and unpredictable. And so you have a higher chance to risk money in unfavourable times. Risk less with drawdowns When your portfolio drops 6%, 8% or even 11% - This is where you’re not sure when the market will become more favourable. This is the time where you decide to risk less money per trade. You would drop the risk from 3%, 2% to 1.5% or even 1%. Then keep trading until the markets pick up and start to favour your portfolio… Once you’re out of the drawdown then… Risk more money with the winning streak During the winning streaks, the market is typically more stable and predictable, and the chances of making a profit are higher. You can then pump up the risk back to 2% or 3% (if you’re a risky biscuit). When do you do this? When your portfolio is either BACK to an all-time-high. Or when you can see the market has broken out of the sideways consolidation and volatile period. Risk management is an important aspect of successful investing, and adjusting the amount of money being invested based on market conditions is one strategy that can help investors achieve their financial goals. By risking less money during drawdowns and more money during winning streaks, you as the trader can lower your potential losses and maximize your potential gains.
JSE:J200Education
by Timonrosso
Humble yourself or the markets willAs a trader, you must approach the market with humility and an understanding that you are at its mercy. And so you need to remember that the market, doesn't know you, doesn't care about you, and doesn't work to reward you. Let’s break that down. The Market Doesn't Know You The financial market (Mr. Market) is a complex and dynamic system that is influenced by a multitude of factors. These factors are beyond our control and are pretty much impossible to predict. As a trader, you need to remember that the market doesn't know you, isn’t out to get you and that your success or failure is not a personal reflection of your worth. The Market Doesn't Care About You It can be tempting to think that the market is out to get us and that every loss is a direct result of our own mistakes. However, the market doesn't care about us as individual. They don’t have some personal vendetta against us. Every trade is simply a result of supply and demand dynamics along with risk, reward and probabilities. We must accept that sometimes the market will work against us, no matter how skilled or experienced we are. The Market Doesn't Work to Reward You There is such high competition with trading. This environment is very high-pressured. It sometimes feels like we are in some race to make as much money as possible. However, it is important to remember that the market doesn't work to reward us. As a trader, you must be humble and understand that success in the markets takes time, patience, and you must be willing to learn from your mistakes. Also need to approach each and every trade with a level-headed and open-minded perspective. Focus on this, and you you’ll make which will help us to make better decisions and increase our chances of success.
JSE:J200Education
by Timonrosso
Why You Need Humble Pie as a TraderHere's why you need to be a humble trader. REASON #1: Humility is required for losing I’ve mentioned this for the last 20 years. And nothing has changed. We are NOT in the trading game to be right. We are in this process, to follow a proven and winning strategy in order to grow our trading accounts over time. Not in a week, not in a month and not even in a quarter. It is our job to take the trades, bank the medium sized gains and take the small losses along the way. There should be no ego with expecting a trade or a sequence of trades to be right. If you want to be right, go become a lawyer, accountant, swimmer or find another hobby. REASON #2: Humility betters your trading strategy process It can also be tempting to try to change the system. This is where you act on impulse, bank a premature winner or cut a loss quickly. This does nothing to your strategy except turn it into a discretionary, non-tested and a temporary winner in the short term. But in the long run, when the markets rectify and become more favourable your winning, your strategy will stop working. Instead, rather focus on your system, improve on your entries, look for conducive markets and master execution. Your portfolio’s results will then take care of itself. REASON #3: Humility is not trying to avoid drawdowns You need to be humble enough to believe your carefully proven strategy ‘knows’ better than your short-term ‘wise-guy’ ideas. It’s not your job to avoid drawdowns (sequence of losses). It is your job to manage your drawdowns with structured and consistent methods. I have three strategies with drawdowns: 1. Trade your Equity Curve (portfolio) to know when to pause trading 2. Drop the level of risk per trade 3. Look for only high probability trades on other markets REASON 4#: Humility highlights your weaknesses You have to be honest as a trader. You can’t keep thinking you’re best at every aspect of trading. Break down the processes including (Markets allocation, Methods and systems, Money and risk management and Mind and psychology). Then ask yourself… Where am I weak with trading and why? Dig into your personality, traits and preferences. Become vulnerable so you can see the truth where you may be lacking in your success. Here are some thoughts: Do you convince yourself your trades are going to be winners? Do you look for confirmation signals that you don’t need to worry, when your trades move against you? Are you scared your ego will be hurt from taking losses? Are you only looking at a few markets because you’re scared to branch into international markets? Are you feeling old to the point you don’t have time to make slow money as a trader? Find your vulnerabilities, then look for solutions or research on how to improve them. Treat the market with respect and you’ll find the answers you need to win. Final words: Trading is not a race – work on your own time line. Trading might sound like an easy hobby, and it is. But you first need to overcome your demons in order to streamline the process. I tell you this because… You need to be humble as a trader, or the markets will humble you!
JSE:J200Education
by Timonrosso
1
1 Sentence that will RUIN you as a traderWhat if I told you, it can take one sentence to blow it as a trader. Say it once and you’ll set a ripple effect. Before you know it, you’ve given up and leave the trading journey with pure frustration… Wanna know what this one sentence is? “I’ll take the next trade”. Yep that’s it! When you have a winning trading strategy, with strict entry, risk and exit levels – you are no longer the boss. You are a worker. And your job is to follow your job description or risk losing your job. Think about it… The system works with or without you. And if you follow it, you’ll generate a stable and consistent income. So, it is not your place to decide which trades you feel you want to take or not. Think about your back and forward tested statistics. Do you think there’s a robot that says… “Mmm let’s skip that trade my feelings tell me it’ll be wrong.” No, it records each and every trade one the criteria lines up. Here are some ridiculous examples of where traders don’t take trades. “It’s my birthday and I don’t want to lose money”. “I have banked 5 winning trades and I feel the next trade will be a loser’. “I’m on a losing streak and I don’t feel like taking another loser”. “Oooh I’m not going to take a trade, Elon Musk just tweeted ‘stock trading is over rated'”. And I can go on and on… So why will that one sentence ruin you as a trader? Here it is again: “I’ll take the next trade”. Reason #1: You’ll keep looking for the perfect trade Not only will you choose the trades you take, but you’ll also lose the confidence in the trading system and yourself whenever the next trade lines up. Reason #2: You’ll do it again and again You’ll set a precedent for not following your trading setups in the future. Reason #3: You won’t be able to keep a strong track record You won’t be able to jot down your trades with accuracy in your trading journal. Reason #4: Your emotions will get the better of you You’ll start thinking that you know better and refuse to accept the inevitable losses that come with trading. Remember, nothing in life that is rewarding comes without some degree of risk. By taking every trade your strategy yields, you’ll get to the point where you’ll enter into a long-term state of certainty and confidence with your trading.
JSE:J200Education
by Timonrosso
1