Beyond Technical Analysis
Why Do Most Traders Lose Money?Hi Traders, welcome back to another workshop. In today's workshop, I'll be sharing some personal perspective on why do most short-term traders lose money. I've been trading for over 5 years, and yet I've seen these repeated traits happen in most losing traders.
1. Sense of Urgency
- Most traders approach the market with an expectation of low risk high return. Just ask yourself, who doesn't want to achieve highest possible return in the shortest period of time? Everyone wants to make money, but the main thing is the process.
- How do you extract money consistently from the markets? How do you differentiate yourself from the 95% of the losing traders?
2. Risk Management
- Risk Management is one of the key element to make sure you stay in the business as long as you intend.
- Without a proper Risk Management, there's no way you can come out the markets long-term being profitable.
- It also directly reflect your patience level, patient traders always have a fixed risk per trade to pre-define their risk, simply because they understand that the outcome of any single trade is random. The eagerness to get-rich-quick will often blind yourself from protecting your capital.
3. Trading without an Edge
- Often new traders neglect the importance of having an Edge. An Edge simply means you are being confidence in a sense that you'd always come out profitable in the long-term.
The outcome of any single trade is completely random, so stop focusing on the short-term result, and never switch your trading system purposelessly.
4. Mindset
- Above all comes down to this one final key element, which is the proper mindset.
- Always think in terms of probability and possibility. Having a realistic mindset motivates you to put in the necessary hardwork to achieve your goals, not by day dreaming.
Let me know your thoughts in the comments below.
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Why Traders Suffer From Analysis Paralysis In TradingAnalysis-Paralysis In Trading This is an article I’ve been avoiding. Maybe it’s cos’ I’m guilty of it.
You know, A bunch of knowledge makes—jack cross the rubicon.
It’s December 1, 1990. ugh… what a glorious day! I mean—I’m grateful I survived. Are you? (rhetorically—cos’ I talk to myself a lot). Anyway, I finally get to attend “School of Candles” in Pretoria.
South Africa is a great country but, only because they have one of the best—Trading schools in the world. Hashtag “respectfully” .
I mean—Finally! Heh… I’m here. The Oakland… miserable red-collar guy is here. Can you believe it? Considering all the blown accounts and failed trades—I finally left the country to… South Africa.
Pfft… Don’t mind my excitement—at least—I’m not sitting on my a*s reading this article because I have a problem. You are!
i’m pretty sure you haven’t travelled out yet and it’s cos’ you keep losing. You’re a loser! At least… someone had to tell you.
Don’t worry that makes two of us. Yeah—you and uh… you!
Ugh… duh… I know you are not here for my—school of candles story. You’re here cos—you are stuck!
Am I right?
Anyway, I’ll help I promise. But, you have to promise me that I won’t be wasting my time. Do you promise? Okay—Great.
So…
Analysis Paralysis In Trading (What Does That Even Mean?)
Look at them… so peaceful. Quick question—Have you ever really stopped to watch kids play? The laughter, glee, ambience, passion—so peaceful; so serene!
These guys literally have nothing to worry about. Don’t you miss that?
When last did you laugh? No… like actually laugh. These days—we have to watch a funny illiterate online to… crack up. How miserable can one’s life be?
So sad; so depressing and why’s that?
I don’t know about you—but, I miss those days. Nothing to worry about.
You’re probably wondering, “What’s he on about?”… I just had to remind you of what your life (hopefully you’re still breathing)… is supposed to feel like. Before… I tell you how it actually feels like. That’s why you’re here right.
Shucks. Analysis paralysis—wonder who comes up with these names. In a lame man’s term, it’s basically being paralyzed (not literally) from over-thinking. over-researching and over-analyzing…
Why do we do these things; why do we even do anything. Imagine the thought of—mentally paralyzing yourself… Do you love yourself at all? Of course not—Humans (you reading this now) think of the possible worst for—every situation.
Imagine… You go out and a complete stranger gives you money, from nowhere; out of the blue. What’s the first thing that comes to your mind? Be honest, Don’t lie.
That’s what I thought.
Anyway, Being completely mind-paralyzed is bad. I mean … have you seen—how they have to literally drive paralyzed people everywhere… They become furnitures (not trying to be insensitive); they really can’t do anything… on their own.
You’ll end up—A furniture trader!
Analysis Paralysis In Trading (How Can You Tell?)
In school (school of candles), I attended every class. Wyckoff 101, Fibonacci 203 (borrowed course), Way of the candles, Price-action 105, Order blocks and Market structures 103, Supply and Demand, Indicators not manipulators… Weird ones! I took all.
Trust me —I was a diligent student. But, I had no direction.
I practically learned everything and anything. I mean—I wanted to be a great trader (don’t we all).
The next class (Final year) required… Mastery. I realized that—sticking to one thing was a problem. Oh! No, I can’t choose. I literally attended all classes—just to find out what was best for me—even after taking these classes… in my first year.
Hello Jane, I know this is kind of awkward… But, what’s your major?
Uh… Order blocks.
Imagine! I couldn’t even come up with something. What the H-E-L-L do you want Jamal? You’re just going round in circles.
I couldn’t choose. Wanted to take action but, how could I? No one gave me the memo. I don’t even know what making decisions feels like. “Making Decisions” suddenly sounds like the strangest word in—the dictionary.
So, tell me have you been in this position. All you keep doing is learning—anything; everything. But, no actions!
Two ways you can tell:
Can’t seem to make a decision.
Always looking for a better solution—without actions!
For analysis paralysis in trading It’s not something you can cheat. As a trader, You can’t go over or under it—Dealing with it is… the only solution.
You keep delaying actions—whilst over-analyzing every situation. For this trader—you keep imaging downsides… Always the negatives; never positives. Imagine taking a trade—but, you’ve already imagined—300 scenarios of your plan going badly.
Pfft… heh—who does that? Uh! you. You’re literally mentally paralyzed. What other options do you have than over-thinking everything.
Are You Asking The Right Questions?
Ta-ta… I envy them so much. Anyway, You learn to be in the comfort zone because…
Why stress your brain till it’s paralyzed. Your brain is literally “yours truly”—It would always try to keep your safe. It will protect you, which is good. But, you become safe and unsuccessful.
In trading, which do you prefer?
Actually making a decision irrespective of the outcome or… staying out and avoiding everything.
I mean if we’re being honest—the second option looks safe and comfortable. Will you choose that though? Remember you want to be rich; you want financial freedom.
Even if you go through hell—do it without hesitations.
Yup—That quote is a reference to the previous sentence. Eh… your lack of decision making will only make you—miss out on a million market opportunities. So, are you asking the right questions?
When you literally ask yourself the right questions… It gives room for a clearer thought process and faster decision-making.
Honestly though—Let’s blame google.
An increase in options; an increase in choice. The fear of making the wrong choice arises. Then you become mentally paralyzed.
Most traders today are stuck.
I remember meeting a guy (Joe)—In one of my trading communities—in school. This guy found it hard to make a decision. Heh… So he buys and sells at the same time.
Analysis paralysis in trading can make you a fan of gambling. But, there’s a solution…
You can start by answering the right questions. What are the right questions?
Is it worth the risk?
Will it matter in 5 minutes?
What was my first choice?
Can you answer these questions? Make it a habit to answer these questions before—you take a trade. Not just trading—anything at all… Train that brain of yours.
Is It Worth The Risk?
You know some-times the best way to eliminate choices is to—know the risk attached to each choice. Imagine having a $50 account (your only money) and trying to take a trade. You’ll probably over-think every thing because—you just can’t lose that money. I mean… Heh—that’s all you have right?
So, the first question should be… “If I take this trade, is it worth the risk”. Note that… you might lose—but, the keyword here is “risk”. How much are you willing to let go of?… That should be the first thought.
Try this exercise and you have to be truthful—always!… If I was given $50 and I was told to give someone $5 (out of your $50)… Would I be okay with that?
If you will, then you can decide to risk 10% of that account—knowing that you won’t feel bad if you lose.
Ergo, You’ve just made a decision—because you eliminated your options.
I mean losing 10% of $50 is better than losing all.
Now what next? you need to eliminate all trades that will make you lose more than 10%. See, No mulling— just progress.
Note that… Not all trades are negatives. But, we should always consider the risk.
Will It Matter In 5 Minutes?
Now you know the risk you’re willing to take, the next question is—Will it matter in 5 minutes?
Ever heard of the “5 by 5 rule”?
Well, the 5 by 5 rule states that—if you come across an issue take a moment to think—whether or not it will matter in 5 years. If it won’t, don’t spend more than 5 minutes stressing out about it.
Forget the “5 years”—My own 5 by 5 rules is… don’t waste 5 seconds pondering over it, if it won’t matter in 5 minutes. Mine works right?
I mean… 5 years is a pretty long period you know. By the way, the market waits for no man. The fact of the matter is, there are some problems that do not need your full attention.
Why stress over some money you’re okay losing. If after 5 seconds you’re cool with it then—go ahead!
Do me a favor. Let’s practice… Um—can you remember what you just did 5 seconds ago? If you can, it matters; If you can’t, “It’s irrelevant and doesn’t matter. There, fixed right!
What Was My First Choice?
The human mind is like a sick computer virus.
It’s basically, randomly, just processing relevant and irrelevant informations and thoughts. You tend to have all these choices, thoughts and feelings all mixed up—especially during pressure. I was listening to Roger Khoury the other day and he said, “When driving a car in a—calm state—you’re basically just following the rules of the road right? But, what happens when you’re late for a meeting—You find yourself breaking all these rules.”
Similarly… same applies to the market. You don’t have time; you’re supposed to make a decision—If not, the market leaves you.
Then if you’re like me that attended all classes in—Pretoria, you probably don’t have a particular strategy. Different options; different opinions. What happens?
You become paralyzed!
All this can be avoided if you remember your first choice. Many traders fail to understand that our gut feelings, our instincts—matter.
Where do instincts come from?
In as much as the brain behaves sick sometimes—It also stores useful informations… knowingly or unknowingly. These useful informations are usually processed when needed.
Do you ever know something and wonder—how you know that thing?
It’s cos’ you probably already came across that stuff but, you ignored it. Cos’—It didn’t matter. But, look who wasn’t ignorant “your brain” yeah, remember… “Yours truly” loves you.
Those first choices… are thought of for a reason. So, make them your last resort—always!
Havoc Of Analysis Paralysis In Trading
Hey guys, my name is Jamal and I’m a victim of Analysis Paralysis in trading … “Hey Jamal”…
Sounds familiar. Yeah, group home.
My encounter with Analysis Paralysis in trading wasn’t a great one. There were consequences. Each with its own baggage.
After I narrowly graduated from the School of Candles, Pretoria. I mean I’ve learnt everything—I was ready for the market.
On Tuesday, May 3, 1994, I deposited $50,000 to my trading account. As a graduate of School of Candles—what was the next thing? To get into the real world of trading .
A nasty encounter in the market occurred. I found a GJ (gbp/jpy) trade, the daily had a bearish head and shoulder, the—4 hour, a double bottom. On my chart, I had Bollinger bands, Moving averages, Relative strength index… Name it.
Yeah —I was that confused. Didn’t know if to—buy or sell. Oh! No, a clash of interest.
My indicators… some gave me buy signals; others sell signals. Oh my God! What now? What’s the direction—Now I’m exhausted, tired, I can’t think straight!
The market decides to buy… Yeah, I guess I’ll go long now.
The sound your phone makes when you just placed a trade. Greedy old Jamal, used 2 standards for US30 on a $50,000 account. I was more than confident.
The market does it thing. What! no… no… n0—Why is there a sell taking place now? No!
The Havoc
That’s it… That was so easy I lost it all.
Everything! “What was the point of school then?” I thought. Useless! You’re so useless Jamal. You can’t get anything right.
I couldn’t make a decision… My brain said, “Pause”. I was paralyzed and I failed. Three things happened to me:
My trading performance reduced
Creativity was gone. Couldn’t decide on a strategy and all patterns became useless.
Lost my willpower. I couldn’t make a decision—too many options.
Thank you for listening! “Thanks for sharing Jamal”.
How To Overcome—Final Words
Don’t ask me what I went to a group home to do. Analysis paralysis in trading affects you mentally—It builds into a habit and you become the hesitant trader.
Do you remember him? That guy who couldn’t make decisions, that insecure coward. Yeah—that was who I became.
June 23, 1994, I was in bed. Thinking, crying, staring—”What went wrong?”, I thought. How come… I mean i’ve gone to one of the best schools, learnt everything there is to learn, and graduated with a 2:1. So, what exactly is the problem.
I discover that—I was.
“Jamal you are the problem”—I discovered 6 things. These 6 things I’m going to tell you are very important. I’m telling you because—I love you.
You shouldn’t follow my past; you shouldn’t make my mistakes. My mom’s teaching helped. Remember when she gave me the trading elements and principles…
Steps To Overcoming This Nuisance.
This is the truth; this is my truth. After a month I discovered that:
You need to trust you. No one else opinion matters in the business of trading. It’s your business—You should mind it.
Limit the amount of research (information you consume) you do. It’s called “learn and earn” for a reason—Not “Learn and continue learning”.
Talk to someone. If you think you’re stagnant, you need to pour out all those information—on someone. Teach them!
Perfection isn’t the key. Progress is!
Know your end goal always.
Notice every thoughts and emotions. If possible, write them down.
If you follow this manual, you should never have reason to be stuck or mentally paralyzed. Remember sharing is caring!
Tell someone about this article. Most traders have no idea what analysis paralysis in trading is.
How To Use The Trading View Parallel ChannelsHey wits, it's currently 1am and I thought why not drop some tutorials cos' it's Saturday. Most aren't familiar with the trading view tools. So, we're here to help.
Watch the clip to get started with the trading view parallel channels.
Leave a comment and smash the like button if you found this helpful.
What Are Key Levels? Learn To Identify Key LevelsIt's currently 12am and I thought why not drop a nugget.
So here it is... Finally, I dropped my supply and demand, support and resistance a.k.a Key levels tea.
Take this one seriously Cos' Nasdaq100 respects it a lot.
For better entries and exits you'll need to have a clear knowledge of key levels.
What Causes Reversal? - Understanding the LogicHi Traders, here we are back at another workshop on " What Causes Reversal? - Understanding the Logic ". In this video, I will be explaining some of the logic behind the charts, and dive into the basic logic of what really cause reversals to happen, not just by blindly memorizing chart patterns.
1. Extreme Imbalance in Supply & Demand
2. Over-valued OR Under-valued
3. Irrational behaviour
4. Profit-taking
5. Opposition take advantage
Let me know your thoughts in the comments below.
If you enjoy the content, make sure you click the like button and share it with someone who need to read this.
How To Get USD Prices For Any Token (Even DEX's!)A quick explainer showing how to get USD prices for some of the more niche tokens that aren't quoted that way natively by their DEX. Leave a like if this helped you get the right charts!
Cheers ~
YOU CAN ALSO JUST DO: FTMUSD/WFTMTSHARE (for example) and get the same result. I just figured that was harder to explain. Totally doable!
The importance of trading what you seeThe educational videos we release help traders develop specific trading skills.
In todays video we speak about multiple time frame analysis and just how important it is.
In this example we are using xauusd and mapping out key trading levels, chart patterns such as the reversed head and shoulders and the 5m rounding bottom
We hope you learn something valuable in this video, if you do give us a like and follow for more!
The cost of IGNORANCE: personal example, 10k profit vs 9L profitJust this morning, @AVENUESOFINVESTMENT told me of how he found 50 shares of NSE:BAJAJFINSV that he had sold back in 2013. Those shares would have been worth 9L today! We sold it for 30k, with a profit of no more than 15k or so. But if we had held on to them till date (considering that it's an investment), the position would be worth around 9L! This is why it's important to be aware of basic fundamentals and technicals and, more importantly, to be money-minded. Happy trading and investing!
Winning is easy. What matters is what you do when you loseHey traders!
In this video we go over mindset and what matters more than winning in trading, it is how you deal with losers!
We hope this video helps you form an edge in your trading and help give you growth and development, something every trader should seek!
Good luck trading!
I Just Took a Big Proft - What Should I do?Hi Traders, welcome back to another workshop. This topic is often a big question mark within a lot of traders, wondering should they continue trading after getting a jackpot trade? When it comes to this, again, there's no right or wrong. It is all about your plan, mindset, and performance. Below I've summarized the 3 main highlights of this workshop
1. Identify whether it is a good win or bad win
- If a winning trade is within your trading plan, something that you carefully planned and executed, then it is a good win. Because most likely it is something that is repeatable and duplicable, which can contribute a big part to your long-term consistency.
- If a winning trade is not within your trading plan, then often it is categorized as a bad win. You took the trade based on impulsive behaviour, you jumped into the chart just start taking blind trades. Yes, it is still a winning trade, but as a professional trader we do not determine the quality of a trade based on the outcome. It all depends on the execution of the strategy and the quality of the setup itself. You can have the best setup where everything aligns but still lose money. Think about it.
2. Do a mindset checking - "Is my mindset still clear?"
- Is your mindset still at at peak? If the answer is yes, then feel free to continue trading, because who knows it could be one of those good months?
- But if the answer is no, then probably you should take a step back. You can either trade less size to track your performance or you could perhaps stop trading and focus on something else, then come back stronger.
3. Set a drawdown limit (Very important)
- Always pay yourself first. Active trading is still considered a job. I understand the importance of compounding, but always take a small portion of the money and pay yourself first, then continue growing your account.
- By setting a drawdown limit, it calms your mind as you secured portion of the profits. It always avoid you from performing poorly due to a different mindset approach then eventually give back all of them back to the markets.
Let me know your thoughts in the comments below.
If you enjoy the content, make sure you click the like button and share it with someone who need to read this.
How to Spot & Trade Falling Wedge Pattern | Price Action 🤓
Hey traders,
In this video, I will teach you how to trade a falling wedge pattern.
I will share with you my rules on how to identify the pattern,
how to read it correctly, how to select the target & entry levels
and how to set a safe stop loss.
We will discuss a theory and real market examples.
❤️Please, support this video with like and comment!❤️
Stopped Out - Is It Okay To Re-Enter?Hi Traders, welcome back to another workshop. I believe this is a very common struggle within our community as a Trader. Often when you take a loss on a particular setup, the urge of getting back into the market is intense, and that's human psychology.
Do you realized how focused and how biased you are when you are hunting for a specific setup?
- Get stopped out once, you'd still take it because it doesn't do any damage to your account
- Get stopped out twice, you'd still arguably take it because you allow yourself for a re-entry
- Get stopped out thrice, now your emotion is taking over your rational behaviour. Now all you're focusing is either "How can i make my money back?!" or "I MUST be correct" or "This cannot be ..."
Familiar?
Remember, trading is not so much about Yes or No. It's all about measuring the Risk-to-Reward VS Probability of Success. If a setup is so valuable that you cannot afford to miss it (assume it passed through your trade evaluation process), feel free to take it again and again. But if you're trading the P&L, then i'd suggest you to only allow yourself a maximum of 2 chance entries, meaning that if you're getting stopped out twice in a row in a similar setup, you should probably get some rest or trade the other markets.
Most of the time, when a trader gets stop out multiple times in a row trading a similar setup, the emotion kicks in. Now their trading lens is no longer focusing on finding the best setups, but rather 'this must be it'. That's also how the over-trading and revenge trading behaviour pops out.
Let me know your thoughts below.
If you enjoy the content, make sure you follow my profile and give me a thumbs up for daily fx forecast & educational content.
How To Trade GapsIn this video I cover how you can trade using gaps on the DXY.
Since you cannot trade the DXY directly, you can trade usd cross pairs. In specific, EURUSD.
EURUSD and DXY have a high inverse correlation. Therefore when 1 is going up, the other is going down.. and vice versa.
I hope you enjoy this video!
Hit that thumbs up button!!
How Many Shares Should You Buy? Position Sizing GuideIn this video I go over 3 different position sizing methods you can use to work out how many shares to buy.
Risk management is often overlooked but it's very important to keep a consistent level of risk across all of your trades so that one trade can't blow your account up and you can remove the emotion from your trading when deciding how many shares to buy so you don't get caught up in the moment and put on a trade too big for your account.
Here are 3 examples of different position sizing methods;
POSITION SIZING #1:
- Equal Weighted Position Sizing
With this method we want all positions we open to have the same value, for example on a $10,000 account if we choose 10% position sizing, that would be $1,000 target per position. To work this out simply divide $1,000 / current stock price = shares to buy. For example on $AMC with a current stock price of $33.94 that would be 29 shares (1000 / 33.94).
POSITION SIZING #2:
- Stop Based Position Sizing
With this method we want all positions to risk the same $ amount if the trade hits our stop loss, for example on a $10,000 account a good level of risk per trade is 2%, so that would be $200. To work this out simply divide the target $ risk / size of your stop = shares to buy. For example on $AMC with a stop loss of $5.04 that would be 39 shares (200 / 5.04).
POSITION SIZING #3:
- ATR Based Position Sizing
With this method we want all positions to risk the Average True Range (ATR) * 2, for example on a $10,000 account with a target risk per trade of 2%, that would be $200. To work this out simply divide the target $ risk / ATR * 2 = shares to buy. For example on $AMC with a ATR of 2.92 that would be 34 shares (200 / 2.92 * 2).
At the end of the day it's important to find a method that suits you and your trading strategy that you can stick to consistently.
Trading strategies, Part 1: First stepsWelcome to a series of videos called Trading Strategies. In the next couple of weeks, we'll talk about different strategies one can use to maximize gains: Market psychology, trading tools, trading styles, technical analysis.
Today, the first steps:
1- Defining who you are: Are you an investor or a trader
2- Educating yourself: Knowledge is the best tool someone can have on the market
3- You can't win all the time
4- Don't be greedy
Stay tuned for more content
How To Use Risk:Reward Like A ProWhatsup my friends
In this video I will be covering my risk:reward model and how I can use it to generate an edge in the market.
In this specific backtesting session, I used 0.5:2 risk:reward with TP at 4RR for every trade.
I got pretty good results - but remember this is simulated and it's easier to perform better.
However, don't take this type of training lightly - this is the best way to improve as a trader.
The next step would be to actually start journaling your trades and analyzing everything at a deeper level.
I hope you enjoyed this!
Cheers
Dil