Why 99% of traders FAIL?Hello traders! Check out the main reasons why some traders are profitable and the others fail, tell me who you identify with and also your opinion on these facts!
Trading Plan
Why You Shouldn't Feel "FOMO" AnymoreHello to you my dear TradingView readers,
All the below are based on my preferences, I don't give any financial recommendations and I have nothing to sell you with this article.
I'm sharing content because I see a lot of traders being/becoming broke and I don't want you to be one of them.
One reason I don't have fear of missing out is that after 11 years of trading, I've learned that almost no one in this game keeps the money they've made.
A person's 10 minutes of fame does not excite me.
Usually, I'm right in thinking that they'll end with nothing.
👇 Here is Why 👇
My uncle made a fortune trading stocks during the dot-com boom, so I got into it.
He came up empty-handed.
With cryptocurrencies, I've seen young men turn $1,000 into over $100,000 in a matter of weeks.
They've since lost everything and are now penniless and in debt.
Robert, one of the greatest legends to me in my trading journey, was once up $60 million from trading.
He finished with nothing more than a good story.
I've seen it time and time again.
I'm no longer surprised by the rollercoaster of huge gains and losses.
It is my standard assumption.
I don't want anyone to suffer financial hardship.
Even those who appear to be clueless and act like fools.
The market gives and the market takes away.
It is extremely effective in this regard.
So let me say this: if you've made 100,000% in trading, I sincerely wish you the best.
But if you want congratulations, tell me when you’re retired.
The skills to make money are very different than the skills needed to keep that money.
The latter were more difficult for me to acquire...
If you want me to expand more on that topic, please let me know in the comments section.
I'll keep bringing a few articles like this every week because it helps me clarifying my thoughts AND giving back to the community makes me feel good about myself somehow :)
I intend to share all facets of what makes a fantastic profitable trader and how to attain that status.
This is both the most difficult and the most rewarding job.
Thank you for reading
Dave
Correlating PairsFind correlating forex pairs when you've decided on a trading strategy.
You'll have to do less work deciding on your week's trades.
EURUSD and GBPUSD are great pairs, for example.
Smart Money vs Retail traders (How to Think Like Smart Money)😱 There were a few people there talking about their losses, that they had no idea what to do and I wrote this to them:
It's mostly the fault of mainstream media + youtubers + twitterers etc. It's really easy to communicate the simplest approach that everyone understands and subscribes too. Note that if everyone is on the same side... Usually most people are wrong. They take past events too much at face value. But the market is constantly changing. Its to buy on the upside and not during pullbacks + HODL HODL HODL. With that said they really have no idea where they should get out and get in. That's fine by the way. News can be picked up by any of us from the news portals. They don't inform anyone about the negative side of things. It's a tough place to be and you can't take it half as seriously as it is communicated. Unless you are an investor (REAL) you are looking at the market long term. A multi-year perspective. Of course it doesn't pay off here either. The crypto market is still pretty damn small. No one is too late. Now most of you are losing time, but everyone has to start somewhere. I was in the same situation in 2017. I was drowning. Now I'm still looking at these corrections from + xxxxx% profit. Unfortunately we have to give ourselves time in the market and endure pullbacks of -20-30-40-50-60% to see 3000% profits. Realizing upwards during the upswing is not a bad thing. For me, a huge part of my strategy is to have a lot of money on the sidelines. That's why. Especially on 4H trend changes I sell everything that is not bullish. Then I sell others too if they break the trend and just trade.
💡 We are in the best market in the world, but psychologically the hardest market. If you learn to manage these things and use volatility to your advantage rather than your disadvantage, then it's a game changer.
💡 Institutions (fund managers, pension funds, banks and whales) think in long term horizons and monitor price action based on that (Years, Decades) Small investors, retail traders monitor things in low time frames (Minutes, hours, days). Small investors quickly switch between optimism and pessimism based on current price movements and news in the media. It can be a bull market one day and a bear market for a small investor the next. Institutional investors are not sentimental, they assess the growth rate of the market sector, the total market size available, the adoptation/acceptance, the growth of the network, the analysis of revenues (to predict profitability years and decades in advance). If an institutional investor draws a conclusion, they hold it until the underlying financial situation changes. Small investors usually have limited money to invest, so they often resort to leveraging, which typically results in full liquidation. Leveraged trades have "unlimited" potential losses, and therefore small investors (who do not like to buy spot because it is not "cool") can easily "drop out" of trading because of the "unlimited" losses from leverage. Think about it... as a retailer, you have your precious and hard-earned money on the line. Do you have time to lose what you've worked hard to earn, or even more? Why can't you accept that this is a profession? We study in university for 3-10 years to get an average salary afterwards. But here we are not willing to spend a couple of years without constantly taking time away from yourself with losses? Levrage are not bad. The user is the dangerous one.
😱 There is a reason why 90% of retail traders lose money.
💡Institutionalists brazenly exploit those with few resources and fear. Institutional investors have access to billions of dollars worth of resources and have teams of quantitative/statistical experts who control the automated trading algorithms.
Institutional investors have deep pockets and can influence the general sentiment of the market through the press (news, social media and interviews). Institutional investors influence the news that small investors read. Institutionalists are well known for advertising higher prices to retailers to "buy at the top", This is the FOMO factor (Fear of Missing Out). They are also notorious for creating tremendous market fear (FUD - Fear Uncertainty and Doubt), which encourages retailers to "sell at the bottom".
💡 Institutions are also actively involved in futures, options and derivatives markets. They all actively benefit from short-term price cycles as well as longer-term accumulation strategies. The institutions are sophisticated, financially strong and have expertise. Institutions make money by attracting small investors into the market (via FOMO) and then liquidating their positions (via FUD). In the market, one person's loss is another person's gain.
💡 There is a learning curve that 90% of your people want to skip and get rich overnight. Unfortunately, this is not reality. Knowledge is incredibly important. If you want to be a doctor, or a surgeon, you don't just walk into the operating room and say give me a knife and I'll cut this guy open and operate him without any knowledge. You really have to know what you're doing. If you're an engineer or you want to be an engineer, without training or knowledge, it would be very difficult for you to build a bridge or a skyscraper. You need the knowledge. If you want to be a teacher, but you don't know the subject matter, it would be very difficult to teach students in a meaningful way if you don't even know what you are teaching. So it is essential to acquire knowledge, but that knowledge has to come from the right people. So mentoring is also vital. Everyone must also understand the psychological aspects of investing and trading. Because a lot of people lose money in the financial markets. Not because they are stupid, but because their emotions get the better of them. Focusing on learning is incredibly important, it changes your life. Of course, this doesn't just apply to investing and trading. It applies to everything, which is why the financial markets are so incredible in their ability to create meaning in life, if people are open to it, and if they don't focus too much on money, then money will simply be the result of doing things the right way. Over time, if you do things the right way, you will become rich, you don't have to become a millionaire overnight. If you want to do that, you will probably lose all the money you put into the hands of institutions that want your money, want you to be captivated by a fantasy world.
The reality is that you need the knowledge to fight the big players and win.
💡Self-control is also a must. All wealth will pass without self-control. Self-control makes you keep the money you earn. There are many examples of this among people who have won huge amounts of money without earning it. For example, people who win lottery. These people basically give back all the money they made because they didn't really earn it. A lot of times, the money they didn't earn is put back. When you earn money with self-control, you never have to give it back! It is yours and will continue to grow.
💡 The key is to get off your ass and get moving. Remember these things and you'll be fine.
The Lesson From The Biggest Trader I've KnownHello to you TradingView traders,
All the below are based on my preferences, I don't give any financial recommendations and I have nothing to sell you with this article.
I'm sharing content because I see a lot of traders being/becoming broke and I don't want you to be one of them.
I was fortunate enough to work alongside a trader making 7-8 figures a month.
👇 Here is what I learned from him👇
The Pareto law
The Pareto principle or law of the vital few, stating that 80% of the effects come from 20% of the causes.
Took me quite some time to truly understand it
Throughout the years, I've had a sneaking suspicion that a small percentage of my trades were responsible for the vast majority of my profits.
Basically, trades I entered early, in the expected direction and held until the next support/resistance zone.
Such trades, where the next S/R confluence zone is "far" tend to give the best results.
Then I started to wonder if I should prioritise only those setups over others because of how lucrative they are.
Why bother taking the "less easy" trades right I asked to a senior trader at the prop?
His answer was enlightening
He said, "because we don't know upfront if those trades will work... we only know they have a better chance of giving bigger rewards.... though it's not a guarantee"
And that's why we have to take the other trades too because "even those ones could bring a lot of gains even though the initial configuration is probabilistically less rewarding"
This piece of wisdom killed me inside because I'm lazy and as everyone, I want to make the big money taking a few trades per day/week only
I felt some pain to learn there is no guaranteed way to know upfront even if a likely high rewarding trade will finance my future fancy lifestyle....
He told me then "If you want to make a soccer player wage, you'll have to take bigger position sizes for those high reward setups"
Sounds obvious right?
When you know your trading system gives 20% of very rewarding trades and 80% of small gainers, it makes sense to increase one position size for the rare high reward trades.
Very quickly, I learned that any other strategy for making money in trading is doomed to failure.
To balance out my losing trades and have a decent profit at the end of each month, I had to bet big on high reward setups.
Might sounds shocking to most of you but even with a low win rate, as long as your winners size and PnL are far higher than all the other trades, you'll be profitable.
This simple change was one of the main things that helped me become a very successful trader.
Success defined as how consistent I am at making the desired monthly/yearly salary and at increasing it every year.
If you struggle making money out of your trading, take some time to reflect and identify which trades setups usually bring you most of the available gains.
Then backtest visually what you would have made if you'd had 2X, 3X, 4X the position size on those trades, keeping all the rest equal.
I'll keep bringing a few articles like this every week because it helps me clarifying my thoughts AND giving back to the community makes me feel good about myself somehow :)
I intend to share all facets of what makes a fantastic profitable trader and how to attain that status.
This is both the most difficult and the most rewarding job.
Thank you for reading
Dave
If You're Thinking About Giving Up On TradingHello to you TradingView traders,
All the below are based on my preferences, I don't give any financial recommendations and I have nothing to sell you with this article.
I'm sharing content because I see a lot of traders being/becoming broke and I don't want you to be one of them.
If you're thinking of giving up on trading read this 👇
A long time before becoming profitable
Trading is one of the most difficult tasks in the world
It sucks you in and takes your money within minutes
But if you're seriously trying to change your life around, here's why you should stick with it:
I've been trading for 10 years now
For the first 2 years I lost money
The first account I funded with $10,000 I lost in 6 days
The trading journey is mentally tough.
Not only did I lose a lot of money, but I lost a lot of confidence
I had devoted 2 years of my life to trading and still could not get consistent profits.
It was mentally draining.
The light at the end of the tunnel
But sticking with it was the best decision I have EVER made
I get to wake up every day now feeling fulfilled.
Feeling like all those years of hard work and sacrifice were worth it
Trading turned me into the person I am today.
Before I had ZERO:
- Confidence
- Sense of accomplishment
- Happiness
And now I have all of those things
AND...
I also learned a lot about myself.
I learned what it takes for me to become disciplined
I learned that in some scenarios I'm not very patient, in others I am
I learned about how I learn and the best way for me to educate myself
Yes the trading journey was financially and mentally tough but it was also fun.
The process was fun.
At the end of the day, that's what makes people happy:
Setting a goal, working towards it, and achieving it
There is no better feeling than that in my opinion
But here's the kicker:
If you don't give up, you can't lose
It's LITERALLY a waiting game
It's impossible to spend 10,000 hours on something and NOT be successful at it
Don't compare your journey to someone else
It took me 3.5 years to become profitable, and one more year to trade full-time
For some, it took 6 months
For others, it took 7 years
But I can say for every successful trader out there that it was totally worth it
So if you're considering giving up, take a step back
Think.
Are you a quitter?
How bad do you want this?
Sleep on it and see what happens tomorrow :)
I'll keep bringing a few articles like this every week because it helps me clarifying my thoughts AND giving back to the community makes me feel good about myself somehow :)
I want to teach you guys every aspects of what makes a great trader and how to get there.
This is the most challenging and the most rewarding job at the same time
Thank you for reading
Dave
THE POWER OF STOP LOSSHello again! Here I prepared for you what I consider the most important tool when it comes to risk management and developing a discipline, which helped me a lot in my trading journey: stop loss!
At first, I have to admit that I found it truly frustrating to see how 2 pips can trigger the stop loss and right after that my position reaches my target, but in time, I realised that in order to stick to my trading strategy and become profitable, I have to also accept the losses, even when I consider them
"unfair". Using the stop loss order not only that it helps cutting the losses, but can also help you lock in the profits. What helped my account the most was, after a while when the price goes in the desired direction, to move the stop loss at the entry point (so whatever happens, there will be no loss), and it honestly eliminates a lot of stress, especially during night.
Hopefully you will find this information as useful as I did, and feel free to ask anything in the comments section!
Why Your Backtest Results May Not Give Realistic ResultsHello traders,
All the below are based on my preferences, I don't give any financial recommendations and I have nothing to sell you with this article.
I'm sharing content because I see a lot of traders being/becoming broke and I don't want you to be one of them.
Timeframes
A lot of models work on high timeframes on the charts.
They work visually at least and that's why many are only sharing with high timeframes charts greater than 4H.
We all built a backtest based on a moving average cross and got a shooting 95%+ win-rate when running the backtest engine for the very first time.
We all thought we were geniuses right :)
"Way too easy" we all thought
There is a caveat though...
For derivatives trading (CFDs, options, futures, ..) backtests always account for real trading fees.
Let me explain... We all heard/saw those rollover fees that we need to pay overnight.
This is basically how the brokers are forcing the overnight/over weekend traders to pay more fees.
While the explanation longs to pay for the shorts, and shorts to pay for the longs is poetic - those fees could eat out your position capital way before the price action has even moved.
Imagine a range during days/weeks.
You'll end up paying a lot of fees and might end up with a very negative position size way before anything interesting (from a trading perspective) ever happened.
I saw many trades being minus double digits percent PnL only because of fees.
Then, imagine trading contracts with an expiration date - this adds another challenge - and most of backtests don't even account for that either.
Leverage
Leverage increases disproportionally the risk compared to the opportunity.
Leverage 2 does increase the risk by 2 but the opportunity won't be multiplied by 2.
Well.... it would be in case the analysis is good in the first place. (assuming the risk/entry/exit plan is correctly calculated).
Assuming those analyses are made by experienced traders, then using leverage makes sense - otherwise I'd stay away from it.
I surely sound like a broken record with this...
But, I know what you're thinking
You calculated already how many trades and pips you need to earn $1M and you concluded it won't be possible without leverage.
This statement is true if you want to get rich quick which anyway always lead to get poor quick.
"Past performance doesn't guarantee future performance"
Probably the quote we hear the most in trading guys...
Generally in trading, what worked before has a probability to not work anymore the more time has been elapsed.
I don't mean it won't work anymore.
This only means we should be cautious when trading setups valid from a while ago on a specific market.
A way to not get that burden on our psychology is to indeed reduce the position sizing.
Until we are comfortable and not stressed anymore.
That's the sweet spot you guys have to find.
For some, it might be a few hundreds per trade, for others a few thousands.
There IS NOT a well-formulated generic universal valid answer for what's the best position sizing.
Apart of course from starting with tiny baby positions and scaling up from there
But for sure, once we get comfortable with one position size range level, we should go to the upper level direct above.
Direct above means, if we trade 100 USD position sizes, the next one could be in the 110-150 USD range. (and not 1K right off the bat...)
We wouldn't lift 100 kg after getting used to only 10 kg.
Trading isn't different than any skill requiring training and dedication
The challenge is to not change our goals midway after a few wins or a few losses.
And to stick with them for a few months at least.
Literally takes me weeks of training to add a few kg to my chest press barbell or biceps curls.
That's how much it took me also to increase the average position sizing by 10% or so.
Thus the more I increase it, the more time I need to get comfortable with it.
And it gets increasingly difficult from a psychological perspective the bigger the position size gets
Applies in a lot of areas in life, sport, career also.
It takes time!
The worst thing for new traders is getting early very lucky and rewarding trades.
That's what happened with many crypto traders in 2017 and 2021
They got too cocky and made that money too quickly and too easily.
Then, when the market turned bearish... they gave all it back because their experience/backtest/psychology/beliefs weren't ready for a market shift.
We're at a time where markets change constantly.
And perhaps that's why the patterns used by our predecessors 20 years ago aren't relevant anymore.
My father told me that trading 40 years ago was as "easy" stealing a candy from a baby.
Now it’s a lot more complicated due to the noise, trading bots, etc..
Often orders aren't filled
In paper trading or with a backtest, when a Take Profit is hit... well we make profit and that's cool.
But those LIVE trading know that sometimes... the limit orders aren't filled and no one can give us a logical explanation why the F... they weren't filled.
Even though the charts clearly show we should have been filled...
Your broker will say slippage.
Your guru will say "I got a nice 1000% profit - Hope you all exited when I told you so"
You will say "But my backtest claimed that an order should always be filled..."
I'm saying blaming the casino isn't useful and won't bring you anywhere
And that's why trades need to be managed because we're playing against the house (exchange) & competition (i.e. SMART-MONEY - understand bankers/funds with real advanced financial education) that want us liquidated.
I'll keep bringing a few articles like this every week because it helps me clarifying my thoughts AND giving back to the community makes me feel good about myself somehow :)
I want to teach you guys every aspects of what makes a great trader and how to get there.
This is the most challenging and the most rewarding job at the same time
Thank you for reading
Dave
How to increase your win rate in trading.The first three years of my trading career were a nightmare.
I was all alone, trying to study and apply the course material I bought from a guru who ghosted me a few months later. He didn’t teach me anything besides telling me how to study the course and what my future will look like with trading. I followed his instruction, failed, and told him about the outcome. The response I always got was to study again.
After some time I stopped following his advice. I decided to study what other successful traders were doing. And I found the cause of my problem - not taking responsibility.
At first, I didn’t understand how I’m not taking responsibility. Because I forced myself to study the course and apply everything taught. But as I questioned myself and searched for the answers, I bumped into an AHA moment that was a game changer.
It improved my trading performance.
I unconsciously devoted myself to creating and mastering my 3 edges, which are my:
1. Technical edge.
2. Risk management edge.
3. Psychological edge.
Following the steps we'll discuss below, allowed me to become responsible. And made me realize that taking charge of your trading career early on is important. Because it shortens the journey from being an unsuccessful trader to a successful one.
Not Taking Responsibility For Your Trading Results Prevents You From Succeeding
There are other factors that lead to avoiding being responsible, such as:
1. Focusing on the outcome instead of the journey.
2. Not documenting our performance.
3. Blaming the markets and brokers.
Without realizing that it's holding us back.
Taking responsibility creates integrity. Many people have been taught to believe that accepting responsibility weakens their position or causes them to look bad. But in reality, the inverse is true. By taking responsibility and accepting the consequences, we create safe places of trust and learning. We then stay in a learning loop that makes us better traders.
With that said, let me show you how to stay in the loop and become a full-time successful trader.
Step 1: Create a Trading and Risk Management Plan
Having a plan will get you to cut distractions to keep you focused. But it needs to clearly outline all your strategies, rules, and processes for execution, managing, and reviewing to do that.
It will save you a lot of time and allow you to run your trading business smoothly. Like any other successful business, they have the plan to run successfully.
So, take time to create your own trading and risk management (business) plan. It must include your:
- objectives and executive summary,
- trading system strategies and rules, tools, and checklists,
- risk management strategies,
- as well as processes for planning, executing, managing, and reviewing your trades.
Step 2: Document everything you do in your Trading Journal.
Keeping a trading journal that has your thought processes written in it before, during, and after your trades, will allow you to execute the next step.
Thus having it will keep a record of what led to missing, losing, or winning a trade. You need that data. If you don’t have it, you won’t be in a learning loop, which will result in being stuck in the same place.
So, create a simple journal on Notion or buy one on Amazon. If you decide to create it in Notion, it must include your:
- entry, stop loss and take profit details that have reasons behind the trade,
- emotions before, during, and after the trade,
- before and after chart images.
Now with all the data, it's time for the next step.
Step 3: Review your performance 2-4 times a month.
This is where you become responsible for your trading. This is where you start and stay stuck in a learning loop that insures trading success. This is where you become the top 5% who make it.
What you need to do here is simple. Set a time or day to review your performance using your journal and software that’s like (or is) Myfxbook.
You can do this daily, weekly, or monthly. Not quarterly or yearly. Unless you’re a veteran trader who knows what they’re doing, why they're doing it, and how they should continue doing what they do to stay successful.
That’s the stage you should be aiming at. If you haven’t reached it, review your performance daily, either after your trading session or before sleeping time.
Follow the above steps and start molding yourself into one of the best traders in the world who are rich, famous, and free.
Swing-Trading: Real-Time Signals ✅Our swing-trading strategy is based on the timeless and success proven strategies developed by stock market legends like Jesse Livermore, William o' Neil and Mark Minervini - 3x US investing Champion 🍾🍾🍾
In this video, I go through the details of our swing-trading strategy and explain how to get free access to Real-Time-Trading signals.
What Are The Pros And Cons of Intraday vs Swing TradingHello traders,
There is not such a good or bad timeframe.
Like cooking, everything depends on how you use the ingredients for your meals.
Intraday timeframes
Pros
Earlier entries
Earlier exits => losers are smaller compared to losers with SWING trades
You make your daily goals earlier
With Intraday trading, we're not impacted by contracts expiration, rollover, over-weekend, overnight fees
It's rarely boring (especially with indices trading)
Leverage isn't needed
Perfect for beginners or small capital
Cons
More in/out entries => you have to enter, exit, enter, exit until the real move happen
You have to be more reactive and accurate when taking a position or exiting.
Swing timeframes
Pros
More time to react and prepare
We don't need to be too accurate with our entries and exits
You're less impacted by news/events/rumours/tweets - They have a real visible impact on intraday but generally don't change a thing for the swing trend
Cons
Bigger drawdown by design
Forces to hold trades over multiple days/weeks.
In a range, we pay a lot in funding/rollover fees before the real move happens.
Being double digits percent down because of fees isn't pleasant.
Big capital required to afford to lose a few percentages sometimes with those trading fees
1 click takes 5 seconds.
Then you wait and wait and wait and wait, and then look on Twitter for ideas to invalidate your entries.
When your favorite guru shares a contrary setup, you follow his/her call and wreck yourself.
You really need patience with SWING trades.
If the patience for you is an issue, I'd stick with Intraday.
Have a great day
Dave
HOW TO USE TECHNICAL INDICATORS TO MAKE PROFITS IN TRADING
Always combine technical analysis with fundamental analysis
Successful traders always combine the two types of analysis. This is because technical analysis tends to focus on the past events and fundamental analysis focuses on the present and future issues.
In addition, there are certain situations where technical analysis will not provide adequate solutions. For instance, technical indicators are not programmed to predict the outcome.
In such situations, it is important to rely on fundamental analysis and avoid the market because no one knows the exact number and how the market will react.
Understand the indicators
It is also important to understand the indicators to use. Different one have different ways of analysis.
It is important for you to take time to learn these indicators and how they should set up. There are many learning materials which one can use to learn how the indicators work.
I recommend that you take at least 2 months to learn the indicators using a demo account before using real money.
Use Few Indicators
As stated before, many traders make the sad mistake of using very many indicators at a go. Always remember that two is a company, three is a crowd.
Traders who use more than two indicators at a go make mistakes because of poor visibility and poor market data interpretation.
Therefore, I recommend that you use at most 2 indicators per trade.
Patience
In day trading, patience is an important aspect without which no trader can make it. In fact, some indicators are usually require more time before their predictions can come true.
Following these tips, your indicator-trading will go to the next level.
Do you agree with all these tips?
Hey traders, let me know what subject do you want to dive in in the next post?
Do That BEFORE You Start REAL ACCOUNT Trading
Here is the list of thing that you should learn in advance before you start trading on a real account.
1) Open a demo (practice) account and learn to execute trades without making errors
2) Study the methods of great traders and financial minds throughout history - Jesse Livermore, W D Gann, Charles Dow/Dow theory, Paul Tudor Jones,Richard Wyckoff.
Learn their methods and employ them. Learn their mistakes and avoid them.
3) Focus on learning, not winning. Forget about money and profits. Think about developing a winning strategy and a winning trading mindset. Always be open-minded. Observe. Be flexible.
4) I recommend reading the following books. These books will help you to start to think like a trader and realize what you are getting yourself into:
a) "Reminiscences of a Stock Operator" by Edwin Lefevre
b) "Art of War" by Sun Tzu (Not a trading book but an old book on rules of war and how to protect yourself from being outsmarted and defeated by your enemies)
c) "The Trading Methodologies of W.D. Gann" by Hima Reddy
d) "Time Compression Trading: Exploiting Multiple Time Frames in Zero Sum Markets" by Jason Alan Jankovsky
e) "Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude" by Mark Douglas
5) Watch YouTube videos. Absorb all the info you can as the more you know, the more the pieces of the puzzle fit together later on. You can learn the basics of trading on your own and then when you are ready to take your trading to the next level.
To win the game, you need to develop your thinking and how you participate in the game. You are in a market trading against professional traders. The beginning traders in the market are not your competition-they are incidental. You need to trade with the professional traders who run the market.
I wish you luck on a battle field!
Please, like this post and subscribe to our tradingview page!👍
TradingView & Trend-TemplateIn this video I explain how to integrate Minervini' Trend-Template into your daily stock screening routine.
This concept can be applied to all other securities including Commodities, FOREX and Cryptos.
The links to other relevant tutorials in this context (Stage-Analysis and Trend-Template criteria) are shown below.
10 Important Trading LessonsWhat are most useful trading tips you have heard so far?
Today, I am going to share with you 10 important trading lessons which market taught me after years of experience and I wish these tips to help you in your future trades :
1. We should Only do trading whenever we can obey all the following items or we had better leave trading forever.
2. Never enter into a stressful trade. This means you have to set you stop loss and calculate you target before executing a trade and possible loss should be small enough that you can tolerate.
3. If you feel to need to sit behind your laptop or PC to monitor and check your trade after opening a position, you are entering into a wrong one !. Do not open it.
4. Doing an analysis in relax and comfortable condition is necessary before any trade. Opening a position without " an already done analysis " is a great mistake ! .
5. Running an immediate analysis when market has strong momentum and trading based on that is very risky. Try to avoid such trades.
6. Never fade the gain of a good trade with a loss of a bad one. Good here means trading based on pre-defined strategy and bad means throwing it away .
7. Using leverages can be dangerous as much as it can be fascinating.
8. Only use leverages when all elements of your trading strategy are present.
9. Stick to your Stop loss and Take profit which you set and calculated outside of any market excitation.
10. Being optimistic and over pessimistic is forbidden. Trading is all about being realistic.
please share your own experiences as comments. I am eager to learn from you my friends.
Good luck.
What is really up with the Funded Programs?Before we go any further, I want to state that
1) This post is NOT PROMOTING ANY prop firms/funded trader programs,
2) I do not hate or have anything against any prop firms/funded trader programs, I am just sharing my understanding from what I have read and experienced, and
3) Info here is not complete. If you choose to embark on any programs, please make sure you do your own due diligence.
Traditional Prop Firm
Typically refers to a group of traders that focus on buying and selling financial assets with the firm’s capital. The trader uses that firm's money to trade and in exchange receives a small wage and a large percentage of the profits. In practice, proprietary trading firms provide the capital, proprietary technology, training, coaching, and mentoring for you to become an elite trader.
Funded Programs
There has been an ever-increasing number of funded trader programs, marketing to retail traders about the huge profit-sharing potential (75-90%) when they become "a funded trader." And all that is required is paying for and passing an evaluation/testing period. You would pay anywhere from $84 to $184 for a $10,000 account and it could go as high as you want (almost)
A trader in the evaluation/testing period would have
- Profit target of 8-10% in phase 1 (typically 30 days)
- Profit target of 5% in phase 2 (typically 60 days)
- Daily drawdown of no more than 5%
- Overall drawdown of no more than 10-12%
From my experience coaching retail traders, newbie or average trader has an account size of no more than $10,000. This makes the idea of being funded to trade become really attractive, limiting the downside while almost maximizing the potential. However, there has also been a lot of negativity about these funded programs;
- the evaluation and actual trading accounts are demo accounts
- the company makes more money from traders failing than from profitable traders
- some traders claim to have never received their payouts
Are funded programs scams?
Again, I have not evaluated ALL funded programs to say this, but probably not. (Do your own due diligence!)
Companies running funded programs are likely just deploying a good business model, addressing a pain that most retail traders have (funding their account) and filling that gap.
Should you jump into a funded program?
There is a lot more information (more than discussed above) that needs to be considered before you jump in. A brief checklist:
1) Do you have a profitable trading strategy to deploy? ( if you don't have a profitable strategy, keep reading, learning & testing )
2) Have you used it for at least a year? ( avoid using funded programs as a testing ground, it can get costly! do it on a demo or even a $1,000 account first )
3) Does the strategy meet the max drawdown conditions? ( 5% a day, 10% total? For example, a martingale strategy is not likely to work )
4) How likely are you to bend your trading rules? ( rules set by the programs are set in stone, a breach even by the slightest and you would have failed )
5) Is it the right time to start? ( are markets in consolidation, on a holiday period, or super volatile with no clear trend )
Remember that the average annualized return of the S&P500 is 11.88% (1957 to 2021). Trying to make 8-10% in 30 days and then 5% in 60 days just to pass, tends to put the trader under a lot of stress. How do you perform under significant pressure?
What are your views of the funded programs? Share it with me in the comments
I have never thought much about the funded programs. But recently have been considering giving it a shot and live-streaming the trading process daily. Would you join me on the stream?
Stay tuned, it might just happen.
17 Money Rules Everyone Should KnowHello traders,
All the below are based on my preferences, I don't give any financial recommendations and I have nothing to sell you with this article.
I'm sharing content because I see a lot of traders being/becoming broke and I don't want you to be one of them.
1. Pay yourself first
As soon as you get paid, put money into savings.
Automating this is even better.
2. Keep a 6 months emergency fund
If you have multiple streams of income, you can go as low as 3 months.
If starting out on your own, you could need as much as 12 months.
3. Budget using the 50/30/20 rule
50% for needs
30% for wants
20% towards saving/retiring
4. Divide your bonus into thirds
1/3 for fun
1/3 for retirement
1/3 for debt paydown
5. Put a large percentage of your raised into your savings
This helps avoid lifestyle inflation and moves up your retirement date.
6. Avoid high-interest debt
If you have it, use the snowball or avalanche method to pay it off
7. US only: Always take an employer 401K match
Many employers match a percentage of your paycheck.
This money gets an immediate 100% return.
Turning this down is the same thing as turning down ra raise.
8. Your home payment
Mortage + interest + insurance should cost less than 25% of your monthly income
9. When buying a car, use the 20/4/10 rule
20% down
4 years loan
< 10% of your monthly income
10. Save at least 15% of your monthly income for retirement
11. The stock market has a long-term average return of 10%
So, when the CPI inflation of your country is 10%, you're actually at breakeven in term of buying power
12. The rule of 72
Example: The stock market returns 10%, so 72/10 = 7.2 years to double your money
13. The 4% rule
This rule says you can safely withdraw 4% of your starting investment balance each year (adjust for inflation in subsequent years) and not run out of money.
14. The wealth ratio
Take what your spend divided by your income
If it's below 10%, you're "wealthy" because you can live off 10% of your income
15. Have at least 5 times your gross salary in term life insurance
16. Before spending money
Wait 24 hours and ask: do I still want it? If you do, go and buy it.
This will save you from a lot of impulse purchases
17. Value time over money and experience over things
I'll keep bringing a few articles like this every week because it helps me clarifying my thoughts AND giving back to the community makes me feel good about myself somehow :)
Thank you for reading
Dave
How to pick the best Cryptos ??? 😎JS-TechTrading Masterclass
How to pick the Best Cryptos??
The trend is your friend. This is a very old but true quote.
Why is that?
• The vast majority of big winning cryptos and other securities made the largest portion of their gain in a Stage 2 uptrend
• Evidence that institutions are buying
• Increase probability of success
• Know what to expect under specific conditions – point of reference
Your goal is not to buy at the lowest price – It’s to buy at the right price!
Every crypto and other security go through the same maturation cycle - it starts at stage 1 and ends at stage 4 as shown in the chart.
Stage One – Neglect Phase – Consolidation
Stage Two – Advancing Phase – Accumulation
Stage Three – Topping Phase – Distribution
Stage Four – Declining Phase – Capitulation
Our JS-TechTrading strategy focuses on identifying cryptos and other securities in stage 2 uptrends for our LONG-strategies, and stage 4 downtrends for our SHORT-strategies.
By doing that, we create an edge over long-term investors and less proficient traders. By focusing on cryptos and other securities in a stage 2 uptrend (LONG-strategies), and focusing on cryptos and other securities in a stage 4 downtrend (SHORT-strategies) we avoid losing money or breaking even over a long period of time and we are fully invested when cryptos and other securities are in a confirmed up-/downtrend so that we can accumulate money within the shortest period of time.
Example Bitcoin:
But how can we use technical chart analysis can be used to identify cryptos and other securities in a stage 2 uptrend, and in a stage 4 downtrend?
🍾🍾 3x US investment champion Mark Minervini 🍾🍾 developed the so-called Trend-Template which can be used to screen for cryptos and other securities in confirmed up- and downtrends.
TradingView provides all of the relevant tools to automate this screening process. ✌️✌️ The following section summarizes the technical characteristics which must be met so that a stage 2 uptrend for a stock can be confirmed:
Trend-Template to confirm a STAGE 2 Uptrend
1. Stock price is above both the 150-day (30-week) and the 200-day (40-week) moving average price lines.
2. The 150-day moving average is above the 200-day moving average.
3. The 200-day moving average line is trending up for at least 1-month (preferably 4-5 months minimum).
4. The 50-day (10-week moving average) is above both the 150-day and the 200-day moving averages.
5. The current stock price is at least 25% above its 52-week low. (Many of the best selections will be 100%, 300% or even greater above their 52-week low before they emerge from a sound consolidation period and mount a large-scale advance).
6. The current stock price is within at least 25% of its 52-week high (the closer to a new high the better).
7. Current price is trading above the 50-day moving average (exception “Low Cheat” setups
Trend-Template to confirm a STAGE 4 Downtrend
The same logic applies here:
1. Stock price is below both the 150-day (30-week) and the 200-day (40-week) moving average price lines.
2. The 150-day moving average is below the 200-day moving average.
3. The 200-day moving average line is trending down for at least 1-month (preferably 4-5 months minimum).
4. The 50-day (10-week moving average) is below both the 150-day and the 200-day moving averages.
5. The current stock price is at least 25% below its 52-week high.
6. The current stock price is within at least 25% of its 52-week low (the closer to a new low the better).
7. Current price is trading below the 50-day moving average.
We at JS-TechTrading only consider cryptos and other securities for our watchlists which are meeting all characteristics of Minervini's trend-template. This screening process in itself provides us with a significant competitive edge versus most other traders are doing.
In the next tutorials, I will explain how automated trading robots can be applied to cryptos and other securities on our watchlists.
Gambler's Vision VS Pro Trader's Vision 👁
Hey traders,
In this article, we will discuss the perception of trading by individuals.
We will compare the vision of a professional trader and a beginner.
The fact is, that most of the people perceive trading performance incorrectly. There is a common fallacy among them that win rate is the only true indicator of the efficiency of a trading strategy.
Moreover, newbies are searching for a strategy producing close to 100% accuracy.
Such a mindset determines their expectations.
Especially it feels, when I share a wrong forecast in my channel.
It immediately triggers resentment and negative reactions.
Talking to these people personally and asking them about the reasons of their indignation, the common answer is: "If you are a pro, you can not be wrong".
The truth is that the reality is absolutely different. Opening any position or making a forecast, a pro trader always realizes that there is no guarantee that the market will act as predicted. Pro trader admits that he deals with probabilities, and he is ready to take losses. He realizes that he may have negative trading days, even weeks and months, but at the end of the day his overall performance will be positive.
Remember, that your success in trading is determined by your expectations and perception. Admit the reality of trading, set correct goals, and you will take losses more easily.
I wish you luck and courage on a battlefield.
❤️If you have any questions, please, ask me in the comment section.
Please, support my work with like, thank you!❤️
10 Important Tips & Tricks To Improve Trading Skills
In this article, we will discuss ten important tips and tricks that can enable you to improve your trading skills.
A trading plan is a must
Once you have tested the plan developed and it shows good results, that is the time to go full throttle investing in the stock market.
Do not lose confidence
Be a learner
Be a learner and practice trading as a new entrant, even if it has been decades of trading for you. Look at trading as a classroom with much to offer and to be taken one thing at a time.
Don't fall for rumours
Treat it like a Business
It is serious business here and requires precision, patience, commitment, in-depth analysis and cold-blooded research.
A stop-loss is essential
Have technology at your side
Trader must be up-to-date on the happenings in the trading world and use technology to know about stock movements, new products, new trading schemes and pre-empt market movements.
Defend your trading capital
Take risks that you can afford
It enables you to plan well and not overexpose yourself to the risks in share market trading.
Be open to new strategies
Never in trading should there be a time that you follow a trading plan that is outdated or rigid to change.
What do you want to learn in the next post?
How to find High Probability trades?Hi all, hope you guys are doing well.
In this post, we are going to see how we can combine different indicators/concepts to create confluence zones and find high-probability trades.
Introduction
A trade that has a greater chance of success than a regular trade is called a high-probability trade. Obviously, it's our assumption that some trades have higher chances of success as compared to others because they have more supporting factors. Nevertheless, a high probability trade can also result in a loss.
How to find high-probability trades?
There are a few things that you can observe to find a confluence of various important factors such as a support/resistance level, demand/ supply zone , Fibonacci level, moving averages, volume , RSI , etc.
Depending on your knowledge and trading style, the confluence zone can be derived using a combination of various different concepts or indicators. In this post, I am going to share the factors that I look at for finding good trades.
How to find confluence zones?
In order to find the confluence zones, you need to understand the concepts and the indicators, then combine them together to create the whole picture. It's like building a jigsaw puzzle - first, you need to identify the individual pieces, and then you need to put them together.
Let’s dive into all of these concepts one by one.
1. Market structure
Market structure is simply a basic form of understanding how the markets move. The price action is how the market moves based just on price, without the consideration of trends and how they may continue. But the market structure is focused mainly on the trend.
I have covered market structure in various different threads that you can read here:
a) Introduction to Market structure
b) Bullish market structure
c) Bearish market structure
2. Consolidation before Breakout
If a stock consolidates before giving a breakout, there are higher chances that it will be a true breakout. This is because all the residual supply gets absorbed at the resistance zone and most of the pending demand orders get filled.
Ideally, once a stock goes into consolidation, one of the two processes occurs:
Accumulation
Distribution
In layman’s terms,
- If demand is more aggressive than supply, then the price rallies, which confirms accumulation.
- Similarly, if the supply is more aggressive than the demand, then the price falls down, which confirms distribution.
If you are struggling with identifying the breakouts, be sure to read this post.
3. Support-Resistance levels
S/R levels are critical parts of trend analysis because they are used to highlight important zones. The fact that these levels flip roles between support and resistance can be used to determine the range of a market, trade reversals, bounces, or breakouts. These levels exist due to the influx of buyers and sellers at key junctures.
Flip zone acting as resistance:
Flip zone acting as support:
If you are looking for an in-depth tutorial on support and resistance, please check out my old guide here:
4. Supply-Demand zones
S/D demand zones are one of the most important things that I look at while charting. The stronger the S/D zone, the higher the chances of a reaction. Always look for these zones in the direction of the major trend.
5. Location of 200MA or 200EMA
Always observe the position of 200MA/ EMA with respect to price. Once the price interacts with the moving average, study the reaction. If you are looking for a long trade, then look for a positive reaction as the price reacts with the moving average.
6. Overlap with a Fibonacci level
A lot of times, the price will come back to a Fibonacci level. You need to observe the price behavior near these levels.
If you are not familiar with the Fibonacci tool, please check my old guide on Fibonacci retracement and extension.
7. Candlestick pattern and the size of the candles
The candle spread plays an important role in determining the strength and mood of the underlying trend. In layman's terms, big-bodied candles indicate strength and small-bodied candles act as noise.
In any case, the candlestick pattern and candle spread should only be viewed at an important level. The context plays a crucial role.
8. Chart patterns
This is pretty self-explanatory. If you trade patterns, you can combine them with other factors to strengthen your analysis.
9. Volume expansion
Ideally, at the time of the breakout, the volumes should rise. The volume can be deceiving and we need to see orderflow for a clear picture. Obviously, the majority of us are not looking at the orderflow and hence the volumes can be deceiving. But, for a normal trader, the simple volume indicator is more than enough.
So, these are mainly all of the factors that I look at while analyzing the charts. Please note that the usage of the concepts will vary with charts. Sometimes only 3-4 factors may be at play and the other times, 6-7.
High Probability trade checklist:
1. Market structure
2. Consolidation before the Breakout
3. Support-Resistance levels
4. Supply-Demand zones
5. Location of 200MA or 200EMA
6. Overlap with a Fibonacci level
7. Candlestick pattern and the size of candles
8. Chart pattern
9. Volume expansion
In the example above, you can notice the following things:
1. The market structure was bullish before the breakout, which was evident from the formation of higher highs and higher lows. Don't confuse the internal structure (Low time frame structure) with the external structure (High time frame structure).
2. The price was consolidating in the rectangle / parallel channel for a good amount of time.
3. When the price reached the previous demand zone, the selling pressure started to decrease and the buyers started to step in.
4. When the price interacted with 200MA/ EMA, there was a strong reaction to the upside. This means that the buyers want to take the price higher.
6. The buying interest can be seen by an increase in the volume in the last few sessions before the breakout. The volume can be deceiving and we need to see orderflow for a clear picture. But in general, you do not need to complicate this, just use volumes in conjunction with other factors.
7. We always look for some reversal or indecision candlesticks in the confluence zone. In the chart above, at the point of interaction with the moving average and the demand zone, we can see the formation of exhaustion candles.
Again, we need to look at these patterns only at specific important levels (like support or resistance levels) and disregard the formations in between the levels.
8. When the price broke above the previous major resistance with a massive bullish candle, there was a heavy volume expansion.
More examples:
You can read and revise this post until you understand all the concepts.
Thanks for reading. I hope you found this helpful! 😊
Disclaimer : This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk.
Happy learning. Cheers!
Rajat Kumar Singh (@johntradingwick)
Community Manager (India), TradingView
How to differentiate a fake-out from an actual break-outHappy Friday, sorcerers. Welcome on another educational post by Investroy!
The trading and investing industry is a difficult one to succeed in as it has various complex details that you need to dig into both from technical and psychological perspectives. Predicting the price movement and understanding the logic behind it may be challenging at first. But as time passes and you gain experience, you understand the science behind price action and make more logical decisions.
Today, we will talk about a rather puzzling issue faced by many beginning and experienced traders: the theme of differentiating fake price movements from real ones. Although, it is not always possible to separate the two to the full extent, it is feasible to build a plan around it and stick to it on a consistent basis.
A fake-out is a failed attempt of the price to break above/below a key zone. Very often, it is associated with liquidity grabs and Stop Loss hunts. To demonstrate, looking at the illustration pictured on the chart, you can see how the price attempts to continue its bullish moves, but fakes out from the sideways-moving range and re-enters the borders of it instead.
On the contrary, a breakout happens when price successfully penetrates a key level and continues its impulsive moves in the same direction
Now, the question is: how to distinguish a real breakout from a fake one?
Firstly, it has to be kept in mind that what goes up, must come down. In trading terms, after an impulsive move, a correctional one should come; after a breakout, a re-test should happen before continuing impulses. In order to identify whether a breakout is a fake or a real one, we should always look for a re-test of the penetrated zone after a break is completed. However, you have to keep in mind that it is not a 100% fact that a re-test will happen every time. Sometimes, breakouts will be so impulsive that price will not retrace back to re-test a penetrated zone.
Nothing is 100% accurate in trading. Not every breakout will lead to a re-test before impulsive continuations. Not every fake breakout will seem like a fake-out at first. However, waiting for a re-test of a broken zone is a good way to evade fake breakouts and capture high risk-to-reward trades and opportunities.
To conclude, if you want to make sure you don’t get faked out and liquidated, always wait for a re-test of a penetrated level before forming biases and executing positions.
What Kind of Person You Need to Become to Be ProfitableHello traders,
All the below are based on my preferences, I don't give any financial recommendations and I have nothing to sell you with this article.
I'm sharing content because I see a lot of traders being/becoming broke and I don't want you to be one of them.
Why have I been sharing so many articles so far?
I’ve shared one educational post a day because being a trader is a job.
And a job is the sum of many skills to acquire.
Each skill taken individually won’t make you a profitable trader.
Talking about me and the guys from my trading community, only all those skills applied altogether give us a shot at making money.
Trading is one of the most challenging and one of the most monetary rewarding activity.
Work on yourself first
Your trading profitability is a direct reflection of who you are as an individual.
It’s just is.
If you’re not profitable, it’s because you made some mistakes.
And if you made them, it’s because you didn’t work enough on yourself yet.
Having great trading signals is indeed an essential tool among the stack of tools to have but… this is not enough.
And I’m saying this as someone selling trading signals (and a trading course).
In a past life, when I worked as a back office Quant, we were strongly encouraged to workout, meditate, eat healthy, sleep 7+ hours, having some social life, etc…
Being a trader is first being a human with great habits leading him/her towards nothing else but excellence.
How can someone expects to perform well at such a tough job while being fat and/or sleeping 4 hours a night and/or not controlling his mind/emotions,…
YOU JUST CAN’T.
Trading is hard enough already and the market knows damn well how to take the hard-earned money from people who didn’t work on themselves enough.
Your skills stack
As an entrepreneur owning online businesses, I had to learn about sales, marketing, negotiation, copywriting, accounting, taxes optimisation, coding, hiring, building a company culture, …
Each skill taken separately isn’t enough to bootstrap a business.
All of them used together gave me a shot at succeeding
The same goes with trading.
The reason any very profitable trader I know became profitable after some serious time is because the stack of skills to acquire is consequential.
And I’m not talking about skills we can learn in a short timeframe.
I had to learn how to: (non-exhaustive list)
- Meditate
- Refrain myself from trading when I’m tired or sick or frustrated
- Put my ego side and time to time get back to trading with smaller position size
- Take my profit for the day and get out of my place and go outside
- Eat/sleep properly
- Relax and breath and do some NSDR (Non-Sleep Deep Rest)
- Working out properly and building muscles -> I’m so sure there is a direct correlation for men between our Testosterone level and the courage to enter and manage difficult trades.
- Not be greedy -> One needs to get slapped hard in the face a few times to understand that
- Never anticipate -> many times I cut a trade before the stop-loss or I entered too early front-running some signal(s) - in retrospect, was really a stupid behaviour
- Psychology and Game Theory
- Code trading scripts and trading bots in multiple programming languages
- Listen to the right mentors aka traders way ahead of me in term of net worth
- …
Those skills used altogether compound and made me a very disciplined person - those are my daily non-negotiable behaviours.
If you’re not profitable yet, it isn’t necessarily because the signals you have are bad.
And to figure out if they’re bad or not, you need some trading experience… which comes from….. taking a huge amount of trades for an extended period of time.
Your lack of profitability, comes for most of you from some work you still need to do.
And by the way, each trade you take works on you.
Your trades work on you more than you work on them.
What I mean by that, the more trades you take, the more skilled you get as you keep learning about yourself.
A virtuous feedback loop.
Many traders who lost everything due to a big mistake knew how to make it all back and beyond because…. they already had the required skills.
Conclusion
A red-pilled trader could decide to put his/her money into a 100% trading bot because… learning all those skills is time-consuming.
My advice to that person is…. “Good luck with your endeavour, you’ll likely wreck yourself”
If you don’t trust me… well… I worked as a back office Quant coding trading bots for about 5 years in NYC.
I tested and built more bots than 99.99% of people.
Retail trading bots sellers are selling a concept, a dream which by definition doesn’t reflect the reality.
Regardless of the strategy, it’s unlikely a 100% automated bot performs well overtime as market conditions keep changing.
We’re now in uncharted territory with a very high inflation rate, extreme tensions between countries, an extreme defiance of people of their governments, the WEF, WHO, … (and how could we not blame them seeing what they did to us those past 2 years)
Anyway, what I’m strongly recommending as someone who built non-retail trading bots for a living: learn to trade manually first and then learn how to pilot a bot.
Quotes of the day
- “Never chase opportunities. Let it come to you by creating value and building rare skillsets.” ― Johannes Larsson
- “The ability to make wise choices is the most valuable skill a person can develop.” ― Abhishek Ratna
“Skills don’t die; only people do.” ― Anas Hamshari
“A good trader converts his skills to cash.” ― Michael Bassey Johnson
I'll keep bringing a few articles like this every week because it helps me clarifying my thoughts AND giving back to the community makes me feel good about myself somehow :)
Thank you for reading
Dave
