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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
When to PAUSE Trading – NOT Stop – 4 TimesThere is a time where you might need to PAUSE with your trading. It will save you from a potential portfolio crash. And it happens either when – The market environment isn’t playing nice with your system. And there are moments when you need to step back from your trading. But even when you halt trading, it doesn’t mean you can just take a vacation and chill. No! The key is to track your performance each day, until the conditions improve. This will make sure, you’re poised to leap back in when the time is right. Let’s dive into the signs that it might be time to hit the pause button. Big Drawdowns Over 20% Picture this: Your portfolio is sliding, and suddenly, you’re staring at a 20% drawdown. It’s VERY rare – and I haven’t seen such downside since I started trading. But this applies to new traders who try to do too many things at once. Anyways, 20% is Ouch. If this ever happens, it’s a signal to halt trading and reassess. Then you’ll need to analyze and see what is going wrong. See if there is a flaw in your system. See if the market is the right one to trade your system with. Is it a market anomaly or is it psychological where you keep making silly mistakes. Remember, it’s about surviving to trade another day. Feeling Very Emotional with Trading Losses Trading is a game of numbers, not emotions. Now losses do sting. But that’s only when the risk is too high or you’re psychologically unable to handle them. The trick is to manage emotions and take countless trades (wins and losses), to lower the effect of the losses. But, if you find yourself riding an emotional rollercoaster with every loss, it’s time to halt. Trading with a cloudy mind, over emotions and fear is a recipe for disaster. Emotions can lead you to take impulsive and revenge trades. And this will lead to EVEN bigger losses. So, take a breather. Step away from the screens and give yourself time to cool off. Recenter your focus until you feel you have a clear, rational mindset for trading. A trader who controls their emotions controls their destiny. No Confirmed Strategy Trading without a plan is like navigating a minefield blind. If you’re unsure about your strategy or it’s not delivering consistent results, halt. Spend time to refine and optimise your approach. Backtest, analyze, and validate your strategy until you’re confident it can withstand the market’s ups and downs. Only then should you resume trading LIVE. A solid strategy is your roadmap to success. Do Not Trust Trading Trust is the cornerstone of trading. If you find yourself doubting the entire process, it’s a red flag. Maybe it’s because of repeated losses, unreliable signals, or just plain bad luck. Whatever the reason, if you don’t trust your trading, halt. You will manifest a very negative outlook on what trading can help generate you during your career. Remember trading is all about probabilities, risk and reward. Use this time to rebuild your confidence. Educate yourself, seek mentorship, and engage with the trading community. Trust isn’t rebuilt overnight, but with patience and perseverance, you’ll get there. Once you regain your trust, you’ll trade with renewed vigor and clarity. FINAL WORDS: The Power of the Pause Hitting the pause button isn’t a sign of weakness. It’s a powerful strategic move to know when something is NOT working. When you HALT trading you recognize when you need to protect your capital, preserve your mental health, and prepare for a stronger comeback. Always track your performance and be ready to adapt. Remember, the market isn’t going anywhere, and neither should you—just be smarter about your approach. Let’s sum up the times when you should HALT trading. Big Drawdowns Over 20%: Pause to reassess and prevent deeper losses. Feeling Very Emotional with Trading Losses: Step back to cool off and regain a clear mindset. No Confirmed Strategy: Refine and validate your approach before resuming. Do Not Trust Trading: Rebuild your confidence and trust in the process.
JSE:J200Education
by Timonrosso
2
DON’T Look at a screen all day! - Here's whyStop Watching Your Trades All Day Have you ever found yourself glued to your screens, watching every tick of the market, and feeling the stress levels rise? If so, you’re not alone. You might find it productive and what is essential but it’s actually a more dangerous habit than you might think. Watching every tick will rise your cortisol (stress) levels. It might cause you to take impusive trades. And you might adjust your trading levels when you shouldn’t. And so in this piece of writing I’m going to show you why you should stop watching the screens all day. The Cortisol Rush Every time you check the market and see a fluctuation in your trades, your body responds by releasing cortisol, the stress hormone. While cortisol is useful in fight-or-flight situations, in trading, it can lead to quick and unnecessary decisions. And you’ll end up taking more lower probability trades than you should. It’s time you lead a more balanced, stress free and calmer trading life. Distraction from Higher Priorities Trading should be a part of your life, not the entirety of it. You shouldn’t obsess over every market movement. Your job is to wait for high probability trades to line up, take them and then let the market take over. Also, you the trick is to focus on other vital aspects of your life like: family, health, and even your full-time job if you have one. Balance is key to sustain success in both your personal and professional life. Now there are a number of benefits when NOT looking at a screen all day. Benefit #1: Beter Decision-Making When you’re not constantly reacting to market volatility, you have more time to analyze your strategies and make more informed decisions. This way you can priortise in what is absolutely needed to act on when you do trade. Benefit #2: Improved Quality of Life Life is NOT just about trading. So once you’ve taken a trade and reduced your screen time, you will be able to free up time for other activities that enhance your well-being. I’m talking about things like exercise, hobbies, and time with loved ones. A well-rounded life supports better mental health, which in turn can improve your trading performance. Benefit #3: Increased Productivity Believe it or not, spending less time watching your trades can actually make you more productive. You will also have the right amount of energy and focus to set specific times to check the market and stick to a trading plan. Time management is everything. This disciplined approach can lead to better outcomes than erratic, all-day monitoring. So how do you use your time for when you trade? ACTION #1: Use Alerts Wisely: Analyse and set up your trading alerts for specific price levels, when your strategy lines up or wait for my trading ideas where I do all the work for you. Let technology or a mentor help you t so you don’t have to watch the markets to do the monitoring for you. ACTION #2: Create a Balanced Schedule: You should also take the time to Incorporate other important activities into your daily schedule. This could include exercise, reading, or spending time on a hobby. It’s all about creating a healthy work-life balance. ACTION #3: Check and review your Trading Plan Regularly: When you review and check your trading track record and journal, this will tell you whether you’re on the right path to growing your portfolio. You need to base this time on looking at the stats, metrics, seeing the mistakes you made. And where you are with your trading in total. This only requires you to do this once a week or so. And it will reduce the time you think you need to constantly check the markets. FINAL WORDS: As I always like to say sometimes less is more. Drop the screen time and focus on what is important. Lower your stress and keep to a well-balanced trading life. This way you’ll be able to integrate trading in a more effective and profitable way. Trade well, build wealth.
JSE:J200Education
by Timonrosso
1
Why it PAYS to be a PATIENT trader - 5 ReasonsPatience isn’t just a virtue. Patience is your portfolio’s best friend. Now you might think that patience is just sitting on your hands and doing nothing. It’s not! It’s about taking the time to prepare, analyse and wait for when the moment arrives. And that’s why you have to keep your eyes peeled and ready to take on the big bad market. So here are 5 reasons why it pays to be a patient trade. 🚦 #1: Stops You From Making Impulsive Decisions Ever caught yourself hitting the ‘buy’ button for the sake of taking a trade? You’re not alone. Impulse is the enemy of reason, and in trading, it’s the fast track to a thinner wallet. Remember, the market will always be there tomorrow, but the same can’t be said for your capital. Impulsive decisions normally yields LOW probability trades. And that’s a reason in itself to STOP doing it. Why take the risk? 🔍 #2: Helps You Spot High Probability Trades The markets speak to those who listen. Patience gives you the superpower to cut through the noise and hone in on high-probability trades. It’s like having a financial crystal probability ball. Instead of predictive qualities, you’re armed with analysis, trends, and a likelihood of how a trade is more likely to play out. Remember, more trades from all types of markets don’t mean more wins. Often, they just mean more fees, more stress and more losses. 🤲 #3: Hold Onto Winners Got a winner in play? Cool… Patience says, “Hold it, let’s ride this wave a bit longer.” It’s the difference between a quick sprint and a marathon. Sure, locking in profits feels good and it looks promising on the portfolio. But in the medium to long run, it’s a traders kryptonite to defeat. Trading patience whispers in your ear, “There’s more to come,” and more often than not, it’s right. 🧠 #4: Takes Away Fixation Obsession is a trader’s Achilles heel. Patience frees you from the chains of market fixation. This will allow you to take a step back, focus on other things and not get hung up on every markets ticks. Stop fixating on your trades once you’re in. You have the strategy in play, you have risk and reward levels setup. Let them be and follow your strategy (regardless of whether it’s a winner or a loser). 🐆 #5: Wait for the Prey In the wild, the most successful predators are those that can wait, watch, and pounce at the perfect moment. A leopard will wait for hours in the tall grass. But when the probability is high and the leopard has done its instinctual calculations – it will pounce and WIN. You’re not chasing every gazelle; you’re waiting for the right one, the one that’s worth the energy. It’s about being proactive, not reactive. You set your terms, your entry, and exit points, and then you wait. The market will move; it always does. And when it moves into your crosshairs, that’s when you strike. So let’s sum up the reasons it pays to be a patient trader. 🚦 #1: Stops You From Making Impulsive Decisions 🔍 #2: Helps You Spot High Probability Trades 🤲 #3: Hold Onto Winners 🧠 #4: Takes Away Fixation 🐆 #5: Wait for the Prey
JSE:J200Education
by Timonrosso
EGO NO GO Traders’ Downfall: Six Actions to AvoidThere is NO place for ego and bravado with trading. If it falls under your personality, you have been warned. Do you know why? Because ego and emotion are traders’ kryptonite. In this piece, we’ll dive into the egotistical trader’s playbook and shine a light on six actions that could be crippling your trading game. EGO NO GO #1: Overtrade: More is Not Always More Overtrading is like trying to sprint a marathon; it’s unsustainable and a fast track to burnout. You need to pace yourself or you’re going to get a spasm or a stitch. As a trader, you’re not a machine-gun trader, firing rounds at every shadow. You need to only look and wait for the highest probability trades. Remember, it’s about the right trades, not just more trades. Solution: Quality Over Quantity as I always tell my MATI Traders! EGO NO GO #2: Revenge Trade: The Emotional Spiral After a loss, I know it feels tempting to jump straight back into the markets in order to recover your funds. But let’s face it… Revenge trading is about as effective as using a leaky bucket to bail water out of a sinking ship. Solution: Keep Cool and Carry On Clear your head. Take a walk, grab a beer – The market will always be there for you the next day. And it will probably dish out even better trades. Remember, the market doesn’t know you, and it certainly doesn’t owe you. Stick to your plan, not your pride. EGO NO GO #3: Ignore Risk Management: The Silent Killer If you ignore risk management, it’s like skydiving without checking your parachute. What if you jumped and instead of a parachute you’re wearing a backback? Don’t laugh, these things happen. With trading you need your risk management measures: Stop loss of less than 2% Drawdown management when the portfolio goes down. Risking money you can emotionally handle to lose. Making sure of your trade size. Checking your risk to rewards. Ensuring you’ve protected your positions. Solution: Plan Your Risk Decide on your risk parameters before you enter a trade, and then—this is key—stick to them. Your future self will thank you. EGO NO GO #4: Dismiss Market Analysis: Gut Feelings vs. Hard Data You also need to check the weather. By weather I mean, look at the news events coming out for the day and week. Is it NFP (Non Farm Payrolls)? – The day when you DON’T day trade. Is it CPI (Consumer Price Index)? – The day you DON’T Trade Is it FOMC where the federal committee talks and causes volatility? Solution: Check the news events and be vigilant. EGO NO GO #5: Blame Everything: The Pointless Game When trades go south. They look to blame. They point fingers to their mentors, their strategy, themselves. There is NO blame game with the markets. If you followed your rules, strategies, risk to reward and everything else – You did the best of your ability for that trade. Solution: Own your trade to Hone your trade It Accept responsibility, learn from your mistakes, and grow stronger. It’s the only way. EGO NO GO #6: Fail to Adapt: Evolve or Be Left Behind The market is a beast that’s always changing. I always say adapt or die. Feel the general market’s environment. Know whether it’s in a favourable or unfavourable period. Tweak your system to improve your metrics. Change the markets by adding or removing ones that aren’t working. Take ego out of the analysis. Solution: Stay Sharp, Stay Updated FINAL WORDS: I’m sure you already feel less egotistical when it comes to trading. And that means, this article has done it’s job. Whenever you feel ego creeping in, remember this article save it and store it. In fact go through all the articles that resonate, print them and store them in a file. It will be your guide to trading well! Let’s sum up the ego tendencies and how to avoid them… Avoid Overtrading: Less can be more. No Revenge Trading: Act with strategy, not emotion. Stick to Risk Management: It’s your safety net. Conduct Market Analysis: Never trade uninformed. Stop the Blame: Learn and move forward. Adapt to the Market: Evolve your strategy to stay relevant.
JSE:J200Education
by Timonrosso
6 INEVITABLE Stock Market DownturnsIn the world of stock trading, and crypto trading, volatility is as much a part of the landscape. Whether you’re a day trader or a long-term investor you’re bound to undergo different degrees of stock market downturns, drops and crashes. And each level of downturn has its own set of characteristics, challenges, and strategies for recovery. Let’s dive into the nuances of market downturns, so you can navigate these stormy waters with confidence and savvy. DOWNTURN #1: Down -2%: A Ripple of Volatility Think of a -2% drop in the stock market as your morning coffee spilling over a bit—it’s unpleasant but hardly the end of the world. This level of decline is typically seen as a blip of volatility, a common occurrence in the stock markets that often corrects itself in the short term. DOWNTURN #2: Down -5%: The Pullback Perspective When the market drops by 5%, it’s is often referred to as a pullback and, while it might cause a bit of concern. However, if you look at the bigger time frame, you’ll see it might not signify a long-term trend. DOWNTURN #3: Down -10%: Entering Correction Territory A 10% drop is a clear signal that the market is in a correction phase. This is where the uptrend will come to a temporary halt and the market will drop and correct itself. You’ll see moving averages will cross down and the medium term trend will be showing downside. You’ll also most likely look for shorts (sells) and take advantage of the correction. DOWNTURN #4: Down -20%: The Bear Market Looms Now we’re in the territory of the bear market. This is generally characterized by a 20% or more drop. It might be time to look into more defensive stocks or sectors, such as utilities or consumer staples, which tend to be less affected by economic downturns. DOWNTURN #5: Down -50%: The Market Crash Crisis A 50% plunge is the equivalent of a financial earthquake, causing widespread panic and uncertainty. It’s quite rare, but when it happens, it’s all hands on deck. We saw this in the financial crisis. We saw this during the tech bubble. We saw this with the oil crisis. Silver Linings: Even in the darkest times, opportunities can be found. And whenever we’ve had a crash with world markets, they have turned up, made a come-back and moved to all time highs. DOWNTURN #6: Prolonged downside: The Depression This one I don’t have a number for you. Unlike recessions, which are typically shorter and less severe, depressions are rare and can last for several years, causing long-term damage to a country’s economic health. The most famous example is the Great Depression of the 1930s, which started with the stock market crash in 1929 and lasted for about a decade in most countries. During this period, unemployment rates soared, reaching as high as 25% in the United States, while industrial production, prices, and incomes plummeted. Conclusion: Steady as She Goes As I like to say. It’s important to know that the downtrends, downturns and downside will come. We need to be clued up and prepare for these situations. That way we’ll take advantage as traders of what to do. With the right approach, you can not only survive these downturns but emerge stronger and thrive profitably on the other side.
TVC:SA40Education
by Timonrosso
HOW to SPARK New Trading IdeasToday I want you to use your imagination. I want you to ignite new, profitable and powerful trading ideas. Let’s embark on a journey to ignite your trading creativity, transforming the mundane into the extraordinary. Speak to Traders – The Power of Conversation Nothing beats the raw, unfiltered insights you can gain from chatting with fellow traders. It’s like opening a portal to a universe brimming with unique strategies and perspectives. Whether it’s a casual coffee meet-up or a spirited discussion on trading forums, the exchange of ideas can light up that creative spark within you. As you know I’ll be doing a lot more videos and live events, you’ll have the opportunity to share your ideas, analyses and ask questions! Remember, every trader has a story, a battle scar, or a victory dance. These are not just tales; they are potential blueprints for your next big trade. Let Your Mind Wander – The Art of Creative Thinking In the hustle of tick charts, Bitcoin rallies, and economic news, your best trading idea could be waiting in the quiet. It’s time to get your creative juices flowing. Take a walk, meditate, have more showers or simply gaze out the window. It’s in these moments of apparent idleness that your brain connects the dots, craft strategies that you wouldn’t have thought of while staring at screens. Give yourself permission to dream, and watch as those dreams morph into actionable trading ideas. Explore Online – The Digital Goldmine The internet is a goldmine for traders seeking inspiration. With endless resources at your fingertips, from real-time market analysis to historical data, the possibilities are limitless. Take the opportunity to dive into financial news websites, scrutinize market trends on social platforms, or get lost in the vast ocean of trading blogs. Each click can unravel patterns and opportunities. And it will help propel you towards your next trading venture. Remember, the digital world is your trading oyster, and every piece of information is a potential pearl of wisdom. Trading Podcasts – Voices That Inspire In today’s fast-paced world, trading podcasts are the lighthouses guiding traders through the fog of information overload. They provide not just market insights but also foster a sense of community. Whether you’re on your daily commute or taking a break, tune into a trading podcast. Let the voices of experienced traders be the wind beneath your wings, propelling you towards new horizons. Write Down Ideas – The Might of the Pen An idea, until it’s written down, is like a spark that risks being extinguished by the slightest breeze. The simple act of writing can turn this spark into a flame. Keep a journal of your trading thoughts, no matter how fleeting or outlandish they may seem. Over time, this journal becomes a repository of your trading evolution, a place where ideas can be nurtured and refined. This practice not only sharpens your trading acumen but also serves as a beacon during times of doubt. FINAL WORDS: Remember, every great trader was once a beginner, armed with nothing but a passion for the markets and a willingness to learn. So, let your ideas flow, for in the world of trading, today’s whimsy could be tomorrow’s windfall. Let’s some up ways for you to ignite and spark new profitable and powerful trading ideas. Speak to Traders – The Power of Conversation Let Your Mind Wander – The Art of Creative Thinking Explore Online – The Digital Goldmine Trading Podcasts – Voices That Inspire Write Down Ideas – The Might of the Pen
TVC:SA40Education
by Timonrosso
The Trading Matrix: 14 Vital Lessons DecodedThe Matrix is a movie where no matter what age you watch it, you’ll gain a different perspective from it. And there is a wealth of knowledge and ideas that you can unlock when you dig deep into the movie. A world where the line between reality and illusion blurs, much like the iconic film. The Matrix, with its deep philosophical underpinnings and action-packed storyline. It isn’t isn’t just a cult classic; it’s a treasure trove of lessons for traders. Let’s decode a few trading lessons you can learn from The Matrix. Building Confidence: The Neo Path Remember Neo’s metamorphosis? From Thomas Anderson, a man riddled with doubt, insecurity and worry. To Neo, the confident savior of humanity. This journey is similar to one that a trader takes. You begin with uncertainty, doubt and worry. You then develop greed and ego. The market disciplines and humbles you again and again and again. But then you develop the edge. You adapt to the trading world with gains, losses, drawdowns and different streaks. And then you develop self confidence and resilience as a trader. Like Neo, you might stumble, but remember, every setback is a setup for a comeback. Confirmation Bias: Dodging the Bullet Much like Neo’s iconic bullet-dodging scene, traders must learn to dodge the deadly bullet of confirmation bias. Neo created some form of movements and hand gestures in order to stop the bullets. But what he truly did was create confirmation bias that he was beyond the physics and laws of the universe. And this system is how he was able to go beyond the normal. Create or adopt a trading system that with Confirmation bias, you can identify high probability trades. And even though, you’re using some pseudo system that no one knows about. You’re simply turning chaos into financial order, to have a mechanical process involved – to grow a consistent account. Only by actively seeking diverse viewpoints can you dodge the bias bullet and make decisions that are truly informed. Take the Red Pill: Embrace Reality Taking the red pill is about confronting the brutal truths of the market. The trading world is not a bed of roses; it’s volatile, unpredictable, and sometimes harsh. Those traders who take the blue pill – Only look to win. Only look to build their portfolio with an insane win rate. Only look to go all in on certain positions. When you take the red pill, you take on the realities of trading. You acknowledge the risks. You prepare for the drawdowns. You know you’re going to take inevitable losses. You understand that your past trading does not indicate future results. Those oblivious traders – get destroyed. Like Neo, when you choose the red pill, you choose to see the market for what it truly is, warts and all. There Is No Spoon: The Power of Perspective The “There is no spoon” scene teaches us the power of perspective. In trading, the market isn’t your enemy; it’s your perception that needs adjusting. Bend your mind, not the spoon. Adopt a system which has a flexible mindset. Be ready to pivot your strategies in response to market dynamics. Success comes not from forcing the market to your will, but from adapting your will to the market. Understand the Code – Understand the Matrix Trading involves deciphering patterns, much like understanding the Matrix’s code. The market moves up, down and sideways. Given. But with Price, Volume and probabilities – there is a proliferation of world of opportunities with each market. Develop the ability to read charts, trends, and indicators. Recognize that behind every market movement, there’s a code to be cracked. Agent Smith and Market Manipulators Just as Agent Smith represents a threat within the Matrix, market manipulators pose real dangers. Stay away from markets with: Too much volatility Too many gaps Unusual trading activity Stay vigilant, and don’t be swayed by pump-and-dump schemes or misinformation. They will disrupt your trading journey. Training Simulation: Practice Makes Perfect Remember the scene where Neo was practice fighting in simulations with Trinity and Morpheus? He was testing, improving, adapting and learning. You should do the same before you risk your hard earned money. Test, Test, Test, Forward Test and Real Test. Use demo accounts and simulations to hone your skills. Make mistakes where it’s safe to do so, and learn from them without risking your capital. Morpheus’s Faith: Belief in Yourself Morpheus believed in Neo before he believed in himself. Cultivate self-belief. Trust in your analysis, your strategy, and your decisions. Without belief, fear and doubt will cloud your judgment. The Architect’s Plan: Strategy is Key Understand the market’s architecture. Develop a trading plan and stick to it. Adjust as necessary, but always with the structure of your overall strategy in mind. Free Your Mind: Emotional Control Neo’s journey was as much about freeing his mind as it was about saving the world. In trading, emotional control is paramount. You need to learn to let go of Ego, Fear and Greed. These are your greatest enemies. You can do this by: Having a strong back tested track record to prepare for what is to come. Risk even less until you don’t feel the losses. Real trade with the smallest positions to get an idea on how the markets work and will operate when you incorporate costs. Train yourself to remain calm and objective, regardless of the market’s ups and downs. FINAL WORDS: The Path to Financial Awakening Trading, is much like deciphering the Matrix. It is an ongoing journey fraught with challenges, revelations, and the need for constant adaptation. The key points to remember with the Trading Matrix are: Building Confidence: The Neo Path Develop self-belief through education and resilience. Confirmation Bias: Dodging the Bullet Seek diverse viewpoints to make informed decisions. Take the Red Pill: Embrace Reality Embrace the reality of the markets with all its risks. There Is No Spoon: The Power of Perspective Adjust your perspective and adapt to market dynamics. Understand the Code – Understand the Matrix Understand the code behind market movements. Agent Smith and Market Manipulators Stay vigilant against market manipulation. Training Simulation: Practice Makes Perfect Use simulations to hone your trading skills. Morpheus’s Faith: Belief in Yourself Cultivate self-belief and trust in your decisions. The Architect’s Plan: Strategy is Key Develop and stick to a well-thought-out trading plan. Free Your Mind: Emotional Control Master your emotions to remain calm and objective.
TVC:SA40Education
by Timonrosso
Is trading really gambling? Yes and no!I know why you’re NOT trading. You think trading is nothing more than gambling. I get emails every day from members saying things like. “Timon trading seems like going to the casino”. “Timon I don’t want to put money into something that’s gambling” “Timon thanks but I don’t gamble” So you’re not trading because you think it’s like gambling. Well, before you send me another email like this – Please make sure you read this carefully. Let’s dive into the heated debate and let’s see if I agree whether trading is just gambling. Does Timon think trading is just gambling? YES! I do believe trading is a form of gambling. BUT – hold on… Gambling exists in two realms. Chance vs. Strategy There is chance gambling and strategic gambling. Chance gambling is similar to playing slot machines, lotteries, and coin tosses. It’s 50/50. And it’s all up to chance. Have you ever heard of a professional slots player or coin flipper? I don’t think so. Then in the other realm of gambling is known as strategic gambling. The strategic domain is where skill, knowledge, risk management, methodology, probabilities and decision-making play crucial roles. And that my friend, is why I believe trading is a form of strategic gambling. You do get professional and successful poker and black jack players, sports bettors and of course traders. Right? And that’s because you need skill, strategies and the right techniques to WIN as oppose to mere luck. So before you quit trading because you think it’s nothing more than gambling, allow me to go one step further. Let’s talk about the similarities between certain strategic gambling games and see how we can learn from them with trading. Strategic Game #1: Trading and Poker – The art of strategy and risk management Poker and trading share a few similarities. They both emphasize skill, strategy, and a sprinkle of luck. But you need a deep understanding of the rules. You need keen observation of the competitors. You need adeptness at risk, reward and money management. Poker players and traders alike must know when to hold their ground and when to fold. Poker players put their cards down when the probability is low. Traders either don’t take the trade, risk little in medium probability trades and use tools like stop losses to risk little. Poker also teaches the importance of emotional control and patience. And these as I have written many times before, are crucial in trading. Because emotional decisions can lead to significant losses with both poker and with trading. Next game… Game #2: Trading and Roulette Playing the probabilities It may seem at first that roulette leans more towards chance. Red or black, odd or even etc… But the fact that you have a choice, means that it offers you some form of probability. A fundamental concept in trading are probabilities. Traders, like professional roulette players, use statistical analysis to help make informed and better decisions. It is unpredictable what the ball will land on. Just like it is unpredictable which way the market will go. But if you have a sound system, proven track record and winning strategy – you will be able to base the probabilities and tilt the odds in your favour – over time. In trading, while certain market movements can’t be predicted with absolute certainty, we rely heavily on technical, fundamental, statistical analysis and probabilities to make trading decisions. Trading, much like roulette, is where you need to diversify your positions and bets. And you can WIN in the long run if you follow your high probability strategy. Game #3: Trading and Blackjack How a maths boffon can win overtime In blackjack, players make strategic decisions to outmaneuver the dealer. The main goal is to try and get the cards we’re dealt to hit 21, be close to 21 or be closer to 21 than our opponent’s hand. Bet too high past 21 and you burn (lose). This is similar to trading. You need to be able to analyse the marker conditions. You need to be able to calculate your position sizes and risk management according to your trade line up. Both games need you to have a balance of risk, strategy, and knowledge to succeed. Game #4: Trading and Horse Racing Know your horse! Now this is a game that has turned many statisticians into multi millionaires. Horse racing is where you need to know and choose the right horse that will win based on its: Form Characteristics Conditions of the race Weather on the day and other factors. They study the characteristics, and race conditions to a T. They calculate based on past performance on which horse has the higher probability of winning. Traders need to know their horses (markets) too. Every market you choose to trade, has its own personality, form, movements, and style. You need to check to see if the chosen market has worked for your trading system and portfolio over time. And you need to choose the right time, market environment and other factors – before you take on the trade. In horse racing, experienced bettors also diversify their bets across multiple races and horses to spread risk. With trading we diversify our portfolios over different accounts, markets, sectors, instruments and types. Finally let’s talk about the last game: Game #5: Trading and Sports Betting The power of predictive analysis Sports betting, much like trading, relies on predictive analysis to almost see potential outcomes. If you understand a team’s performance, strategy, and conditions – You will be able to make better betting decisions for the next game. As a sports bettor you definitely need to know how to analyse a team’s or player’s form, weather conditions, past scores and more to predict an outcome. Whether it’s football, rugby or cricket – you need to have your winning game plan to increase your chances of winning the bet. Traders do the same. They have different markets like sports bettors have different games. Traders also conduct similar technical, fundamental, sentimental, volume analyses to help predict potential market movements. Both activities involve calculated risk-taking, aiming for high-probability successes based on thorough research and analysis. Final words: So, as you can see trading is MORE than just gambling. Unlike games of pure chance, trading is a disciplined, analytical pursuit that shares more in common with skill-based gambling. It does require you however to have the right knowledge, strategy, and strong risk, reward and money management. Let’s sum up the games and sports vs trading so you can remember what we’ve covered today: Game #1: Trading and Poker – The art of strategy and risk management Game #2: Trading and Roulette – Playing the probabilities Game #3: Trading and Blackjack – How a maths boffon can win overtime Game #4: Trading and Horse Racing – Know your horse! Game #5: Trading and Sports Betting – The power of predictive analysis DO YOU THINK TRADING IS LIKE GAMBLING?
JSE:J200Education
by Timonrosso
STOP asking this dangerous two word questionWhat if? This simple two word question is a psychological trap that traders often encounter. And it does nothing more than undermine their decision-making process and overall trading performance. This question will open a box of doubts, hypotheticals, and second-guessing. This can paralyze action, distort risk assessment, and divert focus from the present to an endless maze of unrealized possibilities. Let’s look into the psychological effects and what you can do to stop it from creeping in. Psychological Impact #1: Doubt and Hesitation Constantly questioning “What if?” introduces doubt into the decision-making process. For traders, you need to make decisions quickly and with confidence. If you have any hesitation when you take a trade, it can lead to missed opportunities or entering positions at less than optimal prices. #2: Fear of Missing Out (FOMO) “What if this stock skyrockets after I sell?” “What if this stock isn’t ideal?” What if this trade hits my stop loss?” This type of questioning can lead to either: ~ Holding positions too long. ~ Not holding positions long enough. ~ Not taking the trade. ~ Or missing great opportunities that come your way. #3: Overtrading Conversely, the fear of missing out can also lead to overtrading. “What if this is the next big opportunity?” Regardless on whether the trade lined up or not. You might be compelled to jump into trades without proper analysis or strategy. This will increase your trades, costs and your exposure to risk. #4: Regret and Rumination Traders who focus on “What if?” scenarios may dwell on past decisions, and this could lead to regret and rumination. This backward-looking perspective can hinder the ability to learn from mistakes and make more informed decisions in the future. So let’s try prevent the WHAT IF? Scenario. Don’t you think? Managing “What If?” in Trading #1: Develop a Trading Plan Make sure you have a clear, well-thought-out trading plan. This will help you to minimise second-guessing. If you have pre-defined entry, exit, and risk management rules in advance, you’ll be able to reduce the temptation to ask “What if?” and instead focus on executing your strategy. #2: Embrace Risk Management When you understand and accept the inherent risks of trading can alleviate the stress of “What if?” questions. Effective risk management will help ensure you to prepare for all types of outcomes. And you’ll handle your losses without deviating from your strategy. #3: Stay Present You need to be in the NOW moment. This way you’ll be able to avoid the trap of hypotheticals. Ask the questions: Has my trading system aligned? What is my daily and weekly bias? #4: Accept Uncertainty Recognise that market conditions are inherently unpredictable as I’ve mentioned many times. The only thing you should have your mind set to are the probabilities and possibilities of trades lining up. No outcomes can be foreseen or controlled. All you can do is follow your strategy accordingly and forget about the prompt “WHAT IF?”. Final words: I think I have covered all the ways you need to stop worrying about the unknown. You need to stop asking “WHAT IF?”. And start saying “NOW DO”. Let’s sum up why we would ask the hypothetical question when we trade: #1: Doubt and Hesitation #2: Fear of Missing Out (FOMO) #3: Overtrading #4: Regret and Rumination Managing “What If?” in Trading #1: Develop a Trading Plan #2: Embrace Risk Management #3: Stay Present #4: Accept Uncertainty
JSE:J200Education
by Timonrosso
STOP Overtrading with these easy stepsDo you ever get caught in the whirlwind of overtrading? You’re taking a ton of trades because you’re bored, to make up for losses, for the sake of trading and to maybe feel productive. It’s like Netflix really. You’re watching your favorite TV series; before you know it, you’ve devoured the whole season in one sitting. Time lost and you get deep withdrawal symptoms. Well, you need to seriously stop overtrading. It’s one of the BAD habits that you can find yourself repeating. And over time, it will lead to a ton of losses, a blown account and you looking for the “next” best thing. Let’s get into it. Recognize when you’re overtrading and then simply – STOP! TO put it blunt. Overtrading refers to the excessive buying and selling of financial markets that are often driven by emotional decision-making rather than a strategic approach. This leads to low returns and increased risk. First off, it’s crucial to recognize when you’re overtrading. There are a couple of times when you could find yourself overtrading: Chasing losses This is where you try to recover from a losing streak by getting into more lower probability trades. The gamblers overconfidence The opposite can happen. You might feel invincible and the king of the trading world, after a series of successful trades. And this could get you to take on more trades, without proper analysis. And it could lead to you losing all your wins for the day. Market FOMO (Fear of Missing Out) You might see a NEWS event come out. Your buddy might have taken an enticing trade. Or you just feel there is more profits you believe you can take off the table. And so, you jumping into more trades due to the fear of missing a profit opportunity. Boredom Fever Your trader and time is passing and, you are getting bored. In fact, you’re probably feeling unproductive just seeing on your hands. And so you get into other positions to pass time or for the excitement. And you disregard, your sound market analysis. Attempting to meet unrealistic profit goals Most traders have a maximum loss per day, before they stop trading. The dangerous players try to have a minimum goal of a % win they want to achieve per day. This is dangerous. And this can lead to overtrading and more loss taking. Peer pressure Like I said, you might hear from a buddy who’s taking trades. You might hear from some economist or analyst who’s diving in. And you’ll feel peer pressure if they get you to the point to follow them. You have your own strategy, system and risk management analysis. You don’t need anything else! Got it? Top of Form So what do you do when you feel the sense of overtrading? Here are some ideas. How to stop overtrading with easy steps Take a break It’s like stepping away from a heated argument to cool off. It helps clear your head. Pick your best times and days to trade Not all hours are created equal. Know the market rhythms and dance to the beat that suits you best. Keep to your plan only Your trading plan is your roadmap. If your plan is to follow a mentor – so be it. If your plan is to follow your own strategy – Go for it. If your plan is to intraday trade, day trade, position trade or core trade – Just follow it. Don’t venture off into uncharted territory. Quality over quantity Focus on making a few high-quality trades rather than a bunch of haphazard ones. Think of it as choosing a super healthy meal over a fast-food binge. Engage in other activities Go enjoy other aspects of life. Trading isn’t EVERYTHING. Go for a walk. Play with your dog or cat. Do other business. Distract yourself with hobbies or exercise when you feel the urge to overtrade. You’ll thank yourself for not taking any unnecessary trades. Because you won’t set that dangerous precedent, which can continue at a later stage. Final words: Overtrading is doing exactly that. Taking too many trades without following your sound principles, strategy and analyses. This can lead to taking low probability trades, increasing your losses and destroying your mechanical mindset and trading strategy. Let’s sum up WHAT causes you to over trade. Chasing losses: The gamblers overconfidence: Market FOMO (Fear of Missing Out) Boredom fever Attempting to meet unrealistic profit goals Peer pressure And we covered ways to STOP overtrading by things like: Take a break Pick your best times and days to trade Keep to your plan only Quality over quantity Engage in other activities Now you know what to do to STOP OVERTRADING. Go and don’t do it!
JSE:J200Education
by Timonrosso
4 Golden Trading Lessons: Your Roadmap to SuccessAre your ready to elevate your trading game? You’ll need these 4 golden tickets to have a chance. You might have two or three of them, but it’s important to make sure so that you’re set for the rest of your trading career. Have a read and let’s refine your trading skills. Lesson 1: Follow a Proven Strategy and Never Deviate Ever heard me say, “A rolling stone gathers no moss”? That’s your trading strategy in a nutshell! The key to success isn’t just having a strategy; it’s about taking every high probability trader, weathering through all environments and sticking to it. Why? Consistency is king. Markets move up (You profit) Markets move sideways (You lose) Markets move down (You profit). So you might as well enjoy the full journey and trading process you’re your one and only strategy. So, stay the course! Lesson 2: Only Risk What You Can Afford to Lose Here’s a tough love moment: Can you afford to lose what you’re risking? Can you take the money – cut it up – throw it to the ground and you’ll be fine? GOOD! Then you know that emotions and emergency life savings is NOT going to make the cut (no pun intended). If you are feeling highly attached to the money, step back. By only risking what you can afford, you keep emotions in check – win or lose. It’s not about fear; it’s about smart, sustainable trading. Remember, it’s a game of patience and discipline. Lesson 3: Adhere to Strict Money Management Rules This is your financial seatbelt. What are your rules? Here are some: Risk MAX 2% per trade Know where to place your stop loss and never move it when you’re losing Halt trading when the drawdown is over 20% down Never expose more than 20% of your overall portfolio Always have a plan to deposit more money to grow more money Lesson 4: Have a ‘Worst-Case-Scenario’ Plan What’s your plan when the market throws a curveball? Having a worst-case scenario plan isn’t pessimism; it’s smart trading. You know you’re going to be in drawdown around 4 months a year. You know there are consecutive losses to come with any trading strategy. You know the market environments are not always to your favour. So you need that umbrella to know when to halt trading. Whether it’s diversifying, hedging, risking less or having a cash reserve, be ready for when the market isn’t your friend. This isn’t about fear; it’s about being prepared. FINAL WORDS: These 4 Golden Trading Lessons are more than tips; they’re the pillars of successful trading. It’s about building a trading practice that’s not just profitable, but sustainable and resilient. Here are your 4 golden trading lessons. Lesson 1: Follow a Proven Strategy and Never Deviate Lesson 2: Only Risk What You Can Afford to Lose Lesson 3: Adhere to Strict Money Management Rules Lesson 4: Have a ‘Worst-Case-Scenario’ Plan
TVC:SA40Education
by Timonrosso
Draining Trading Habits: The Pitfalls to Avoid for Market SuccesYou know that trading is a mental game. And if you play it wrong, it can be very draining on the mind and the soul. Your aim is to make trading effortless and not overstressing. And to do this, you need to avoid making these draining trading habits. That’s what we’ll cover in this piece. Personalise Losses: The Emotional Pitfall Ever felt like the market is out to get you? Go look at any chart and you’ll see there were times where you would have won and would have lost. It’s a common trap. Losses are not personal attacks. And winners are not personal appraisals. They’re part and parcel of the trading game. Remember, the market is as impersonal as it gets. When you personalize losses, you cloud your judgment, making it harder to learn from mistakes. Instead you need to: Shift Your Perspective: View losses as the trading costs of doing business. And if you’re still learning, then you can see losses as tuition fees for your trading education. Keep a Trading Journal: Document your trades and reflect on your overall track record. This way you’ll see both losses and gains as part of the process. Cling to Long-term Trades: The Hope Trap Ah, the classic ‘hold and hope’ strategy. It’s easy to fall in love with a trade. It’s also easy to marry a trade or even an investment. But as a trader, you must NOT get married to a trade. See them as short term conquests where you take one – lose one win one. But know that the next one is on the way. So, how do you break free? Set Clear Exit Strategies: Before your enter a trade, know your exit points for both profit and loss. Practice Detachment: Treat each trade as just another business transaction. Or like I said – Conquest. Always checking your trades: The Anxiety Generator Checking your trades every five minutes? ‘ This can turn into an obsession. I must say. This is not a good for your stress levels and your trading performance. This habit can turn trading into a nerve-wracking obsession. So instead: Set Alerts: Use technology to your advantage. Set alerts for price movements. Schedule Check-ins: Limit how often you check your trades. Discipline is key! Overstress about trades: The Health Hazard Stress is the silent killer in trading. It not only harms your health but also impairs your decision-making abilities. So, how do we keep our cool in the heat of the market? Practice Mindfulness: Meditation and mindfulness can work wonders for stress management. Maybe even self-hypnosis at night to manage your worries, stress and to compartmentalize them. Physical Activity: Regular exercise helps in reducing stress and improving focus. You’ll be surprised what a simple walk, exercise or even punching the old bag can do to calm your mind. The complaint department: Trading’s Emotional Baggage Complaining about trades is like carrying around a bag of emotional bricks. It’s exhausting! It’s heavy on you! And it’s just plain unnecessary. This habit breeds negativity and affects your mindset. Focus on Solutions: Instead of complaining, channel your energy into finding solutions through your track record and money management strategies. Seek Constructive Feedback: Engage with a trading community for support and advice. FINAL WORDS: Your job is to manage stress, worry and to make trading as effortless and as easy as possible. This requires some physical and mental activities. And not just once off. On an ongoing basis… Let’s sum up the draining trading habits so you know what NOT to do. Personalise Losses: The Emotional Pitfall Cling to Long-term Trades: The Hope Trap Always checking your trades: The Anxiety Generator Overstress about trades: The Health Hazard The complaint department: Trading’s Emotional Baggage
JSE:J200Education
by Timonrosso
5 Hidden Dangers of Trading with FOMOIn the previous TradingView article we spoke about FOMO (Fear of Missing Out). And why it is really not necessary to deal with. There is always the next trade coming. There is always another opportunity coming your way. There is always time to take the next one. No we are going to unpack the five hidden dangers of trading with FOMO and how to sidestep them like a pro. The Emotional Rollercoaster: Stress & Anxiety Remember when I said. “Trading is not just a financial challenge, but an emotional marathon”? That’s never more true than when FOMO kicks in. When you miss a trade, I know that you could feel stress and anxiety creeping in. You feel like you’ve missed the most important trade of the year. Well guess what, you might have missed one trade – but that’s it. Success is based on 1,000s of trades not just one. So the key is to remember this, so you eradicate the feelings of stress and anxiety next time you miss a trade. The Short-Term Mirage: Losing Sight of Long-Term Goals FOMO pushes you to focus on short-term gains. Yes it’s important to try and spot high probability trades on a daily basis. But, if you miss the trade – just go on and look for another. There is bound to be more ready for you to execute or at least prepare for. And while you’re at it, remember these are lessons to help you to be more punctual and vivid with your trades. Following the Herd: The Danger of Sheep Behaviour Ever heard the saying, “If your friend jumps off a bridge, would you do it too?” That’s FOMO in a nutshell. YOUR job is NOT to take a trade based on what your friend, foe, analyst or stranger tells you to buy or sell. Your job is to either follow your own trading plan and strategy or your mentor’s. Resist the urge to follow the flock and rather, trust your own research, strategy and instincts. You’ll form Bad Habits Each time you give in to FOMO and you take a trade for the sake of it, you’re not just making a bad trade. You’re also cultivating bad habits for the future. And once the bad habit forms, it then cultivates and becomes harder to escape from it. Break the cycle by sticking to your disciplined trading routine. You’re better than that! Ignored analysis When you have that FOMO you want to then take impulse trades. And all your hard work and analyses and discipline is thrown out of the window. It’s like trying to navigate yourself without a map or GPS. And you’re depending on your instincts or your “memory”. It’s a very risky gamble and it could take a LOT longer to find your way. Don’t go against the strategy. Don’t take trades for the sake of it. Don’t have FOMO because you missed one or two trades. Just keep to your strategy and move on. It’s your trading compass for a reason. FINAL WORDS 🚀🌟: Trading with FOMO is like sailing in stormy seas – it’s risky, stressful, and often leads to nowhere good. Let’s go other the 5 danger of trading FOMO Stress & Anxiety: Keep emotions in check and stick to your trading plan. Short-Term Focus: Remember your long-term goals and don’t get distracted by short-lived trends. Sheep Behaviour: Be an independent thinker, not a follower. Bad Habits: Avoid developing harmful trading habits by maintaining discipline. Ignored Analysis: Trust in your research and analysis; they are your best tools for successful trading.
JSE:J200Education
by Timonrosso
No FOMO when you trade - 5 ReasonsSo you missed a trade. Or you are you often gripped by the fear of missing out (FOMO) in the trading world? It’s a common feeling. But let me tell you. You might miss a train, but the next one is always on the way. And the stock market will always be there for you to pump out more profit opportunities for you. Today, I want you to not worry to much about FOMO. And I don’t want you to kick yourself and here’s why… Impulsive Decisions: The Enemy of Rational Trading Ever jumped into a trade just because it ‘felt right’? It’s like grabbing a chocolate bar at the checkout – it’s tempting, but not always a good idea. You need to get rid of the idea of wanting to impulse trade (trade for the sake of it). Rather have your trading plan and stick to it by all means. If you miss a trade – LOOK for the next one. Not a low probability trade. Wait for the next high chance of success trade and you’ll be happy you did so. Research: Your Secret Weapon Trading without research is like driving with your eyes closed. You might get lucky and not crash, but it’s a risky gamble. You need to put in the time to research and analyse the markets accordingly. Understand the why behind your trades. Research is your crystal ball in the trading world. Chasing the Market: A Fool’s Errand Ever seen a stock skyrocket and felt like you’re missing the party? You might feel the same with Bitcoin or a stock that has underperformed in a while. The worse you can do, is try to chase the market. If you missed the trade. Move on and find the next perfect trade that is linin up. Patience is your ally. Precision analysis is also the key. Remember, markets move in cycles. Wait for your moment. Big Risks: Big Rewards or Big Regrets? It’s like betting all your chips on red. It can pay off, but it’s a rollercoaster ride. So you need to remember that risk and money management is key. Balance optimism with realism. Use stop-loss orders, adjust with trailing stop losses – get out with time stop losses. And most importantly – Protect your capital – it’s your trading lifeline. High Emotions: The Trader’s Kryptonite The infamous emotional rollercoaster might make you take the wrong trades. It will result in you making rash, quick and irresponsible decisions. So try to keep emotions at bay, stay calm to trade. Develop a mindset that is calm and collected. Remember, the market doesn’t care about your feelings. Final words: So you know that FOMO is another dangerous habit to develop as a trader. Rather, say to yourself this mantra. There is always another and better trade on the way, and I don’t have to catch every single trade that presents itself. Let’s sum up the reasons why FOMO is dangerous. Impulsive Decisions: The Enemy of Rational Trading Research: Your Secret Weapon Chasing the Market: A Fool’s Errand Big Risks: Big Rewards or Big Regrets? High Emotions: The Trader’s Kryptonite
JSE:J200Education
by Timonrosso
What LOSER Traders Say – 6 PhrasesI like to say… Go where winners thrive and excuse givers die! If you’ve ever uttered the following phrases below – I urge you to stop saying them from today. And when you do utter these below phrases, you’re going to manifest losing, despair and hopelessness. But it’s not your fault. It’s the conditions and echo of amateur traders – that other traders listen to. I don’t believe for one second you want the loser mentality. I believe you want to embrace the mindset of a true trading champion. So let’s stop saying the below: The Market is Wrong: A Blame Game for the Weak Newsflash: the market isn’t out to get you. Another newsflash, the market is NEVER wrong. It goes up, down and sideways. What you’re seeing in the charts is HISTORICAL. So, what comes out in the future is untold but the truth. There should be NO ego for ever saying – The market is wrong. Take control of what the market is currently doing and what it has done and analyze your approach. I Suck at Trading: The Pity Party Pitfall Negative self-talk is the fastest route to trading mediocrity. We are ALL bad at something when we start. We continue to be bad at something if we don’t practice hard, work at it and have persistence. If you’re convinced you suck at trading, it’s time to silence that inner critic. Trading is no different from picking up another skill, vocation, endeavour and hobby. Maybe I Should Just Give Up: The Quitters’ Anthem Throwing in the towel is the easy way out. In fact, I don’t believe traders lose. They simply quit. But winners persevere. If thoughts of giving up dance in your mind, consider this: Success often comes to those who refuse to quit. Risk less. Tweak your strategy. Have your game plan with a solid back tested journal. Reassess your goals. Take a deep breath and remember that every setback is a setup for a comeback. Damn, This is a Slow Process: Impatience, the Silent Killer Trading success is not a sprint; it’s a marathon. Complaining about the slow process won’t expedite your journey to financial triumph. Whether you’re holding gold and waiting for the market to rally to new highs – It will come – you just need patience. Winners understand that patience is a trader’s virtue. So either you run the marathon, or give up trying knowing it’s going to be a long road. I Can’t Do It Your mind is a powerful tool. And when there are challenges and doubts, you’ll find that you’ll keep telling yourself – you can’t do it. Think of thoughts as tiny branches of a tree. The more you think a certain way, the bigger the tree becomes. And this will set yourself up for failure. Random thought: This is why when a woman says I’m fat 1,000 times. No matter how thin she is, you can’t convince her that she is thin. Because of the tree she has build in her mind about her self-image. Same with trading. Stop saying negative thoughts. Be kinder to yourself and who you are. Winners replace “I can’t” with “I will.” Winners replace Should, Would, Could with DO! Cultivate a positive trading mindset, believe in your abilities, and watch how your confidence transforms your trading outcomes. I’ll Start Tomorrow Procrastination is the biggest thief of success. Tomorrow is the favorite day of the loser. If you constantly push your trading plans to the next day, you’re delaying your success. You’re delaying profit opportunities. You’re delaying your learning process. Winners take action today. Start now, stick to your plan, and relish the progress you’ll make. Tomorrow’s victories are earned through today’s actions. FINAL WORDS: So from today, say and manifest a more optimistic and positive mindset. Don’t say any more loser phrases. And let’s cultivate a winning mentality and tree of positive branches to your mind. Let’s sum up the phrases you must NOT say: The Market is Wrong: A Blame Game for the Weak I Suck at Trading: The Pity Party Pitfall Maybe I Should Just Give Up: The Quitters’ Anthem Damn, This is a Slow Process: Impatience, the Silent Killer I Can’t Do It I’ll Start Tomorrow
TVC:SA40Education
by Timonrosso
6 More Trading Time WastersWith trading, time is money. And every wasted moment is a missed opportunity. Every day you skip. Every high probability trade you miss on whatever market you’re trading. Even every loss you take according to your strategy, is one step closer you’re missing to success. I wrote about time wasting in the previous article. And I can’t stress enough how important it is to get yourself into gear. It’s time to take control of your time and trading actions. Here are 6 more trading time wasters. #1. Chasing the News Turn on Bloomberg, CNN or BBC. Flicking lights. Loud sounds. Entertaining drama, drama, drama. It’s like watching Netflix. And if you become obsessed, it’s easy to fall into the trap of chasing the latest news headlines. Breaking news is inevitable. And staying informed is great. But it’s NOT necessary to adapt the news into your trading strategy. In fact, the hyped up news will lead to impulsive and emotional decisions. Don’t fall for the news mania. Save that for AFTER your trading. And watch it for entertainment and education. Nothing else. #2. Checking the Portfolio Often Ahhh! The Perils of perpetual monitoring. Listen… Your portfolio is not a ticking time bomb that requires constant supervision. As a young trader I get that it’s tempting to check your gains and losses every few minutes. But this is a long term game. So if you adopt this checking bad habit, you’ll see it can breed anxiety and cloud your judgment. Maybe check your portfolios once a day. Or even every few days. But lose the obsession please. You’re wasting precious time and energy on unnecessary stuff. #3. Analysis Paralysis Another mistake is drowning yourself in data. Too much analysis can lead to paralysis. Endless charts, intricate patterns, and an abundance of indicators might make you feel like a trading virtuoso. But you’ll quickly learn that, it won’t necessarily translate to profits. Rather stick to the K.I.S.S – Keep It Simple Stupid. Simplify your approach, focus on key factors. And please make decisions based on a clear understanding rather than drowning in a sea of data. #4. Procrastination Procrastination is the silent killer of trading success. To leave it to tomorrow. As they say. Tomorrow never comes. All you have is NOW. So, if you want to trade – Get a coffee and sit down and take action. Delaying decisions can mean missing out on lucrative opportunities. Set clear goals, establish a solid plan, and execute it without succumbing to the siren call of procrastination. Time wasted is money lost in the dynamic world of trading. #5. Overcomplicating – Don’t be a trading jack of all trades! Trading doesn’t need to be a convoluted puzzle. It doesn’t take a rocket scientist to trade well. You don’t need a degree or even a complicated strategy. In fact, if you overcomplicate your trading, it will lead to more confusion and poor decision-making. Be a master of a few effective markets, time frames, strategies, money management and techniques. #6. Fear of Taking Action This my friend is the stagnation trap. Inaction out of fear is a formidable enemy for traders. You need to remember that fortune favors the bold in the world of trading. Those who: Deposit money. Learn all about trading well. Practice with a demo account. Adapt a winning trading strategy. Keep persistent with their trading. Are the ones that will win…’ FINAL WORDS: So stop wasting time and start doing more to achieve your trading dreams. Let’s sum up the 6 trading time wasters. #1. Chasing the News #2. Checking the Portfolio Often #3. Analysis Paralysis #4. Procrastination #5. Overcomplicating – Don’t be a trading jack of all trades! #6. Fear of Taking Action
TVC:SA40Education
by Timonrosso
6 Top Trading Time WastersYou need to stop wasting precious time. I have had members who’ve been with me for 15 years and haven’t even taken a trade. I have written this article in a way that you can relate to the problems with traders wasting time. Ready? #1. Wait for Inspiration Trader A: “I just can’t trade today. I’m waiting for that magical moment when inspiration strikes!” SOLUTION: Waiting for inspiration in trading is like waiting for money to rock up at your doorstop. It doesn’t happen! Successful traders create their own inspiration, discipline and integration by TAKING ACTION. You want a sign. Here’s a sign. Start today, do not delay and don’t wait for another sign. #2. Complaining Trader A: “The market is so unpredictable and complicated! I can’t catch a break.” SOLUTION: Stop complaining and start acting, adapting, growing and evolving. Markets change, that’s the only constant about it. And they move up, down and sideways. So, instead of moaning about it, embrace the volatility. Complaining won’t make you a better trader, but adapting to change will. #3. Doubting Trader A: “I’m not sure if I can make this trade. It’s going to be a loser.” SOLUTION: Doubt is the enemy of success. Trust your analysis, track record and your stats. Stick to your strategy just keep at it. This is a long term game to success. When you doubt yourself, you manifest a deeper element of self-failure. You need to stop wasting precious time and opportunities. Confidence, certainty and trust is key! #4. Comparing Trader A: “Look at their profits! I wish I could trade like them.” SOLUTION: Comparison is the thief of joy and the delayer of self success. You should only focus on your own journey. You are running your own marathon. It doesn’t matter how much money you have. It doesn’t matter how long you’ve been trading., It doesn’t matter if others are doing better. You need to focus on your trading time line. #5. Excuse Giving Trader A: “I didn’t trade well because the market was too volatile.” SOLUTION: Excuses won’t make you a better trader. I don’t have enough time. I don’t have enough money. I don’t have enough experience I don’t have enough patience. I don’t have enough anything. I repeat – Excuses won’t make you a better trader. Take responsibility and take accountability for your decisions, good or bad. Learn from your mistakes and use them to refine your trading strategy, stats and track record. Excuses only waste time; accountability fuels improvement. #6. Fear of Failure Trader A: “What if I lose all my money? I can’t handle the risk.” SOLUTION: As I always like to say. You ONLY fail when you quit. Fear is natural, but letting it control your actions is a mistake. You need to manage your trading and risks better. You need stay laser focused with tunnel vision. With trading you should not AVOID losses – as they are inevitable. You should embrace both winners and losses to come with the trading venture. You can’t win them all. But you also can’t lose them all. Keep that in mind when you trade. FINAL WORDS So, by now you should have one thing in your mind. Stop wasting time with your trading. Every day you delay is another profit opportunity you’re letting go of. Let’s sum up the 6 Time Wasters with trading. #1. Wait for Inspiration #2. Complaining #3. Doubting #4. Comparing #5. Excuse Giving #6. Fear of Failure
TVC:SA40Education
by Timonrosso
I'm done with this!We’ve all had this moment. Where we stare at our screens, scratching our heads, wondering a bunch of stuff. Why is this so slow? Why can’t I press the button Where am I going wrong? We’ve chased trends, hesitated when we should have acted, and let our emotions play puppeteer with our portfolios. Today is the turning point. For you! It’s time to say… “I’m done!” This read could be what you need to win this year. #1: I’M DONE: Making Excuses Enough is enough! No excuses this time. Open your trading account Deposit more money Adopt strong trading strategies Have the right calculators and journals to follow Keep at it. No more blaming external factors; it’s time to own your trading career and learn from them. #2: I’M DONE: Feeling Emotional Trading with emotions is like juggling dynamite. Sooner or later, something’s going to explode. Whether you have been on this rollercoaster of euphoria and despair for far too long. If you celebrate winners or get angry over losers – The emotions will only enhance and will develop into emotional turmoil. It’s time you take a more rational approach. Risk less – If the amount is too emotional to handle. No more “I know better trades” than my trading strategy. No more fear, greed and definitely NO MORE EGO! It’s time to trade with a clear head and a steady hand. #3: I’M DONE: Rushing the Process Patience is not just a virtue; it’s a survival skill. Have you been guilty rushing into trades without proper research, hoping for quick wins. Have you been irritated how slow the progress is to build an account. Have you felt the need to quit during drawdowns. Guess what? No body fails with trading. They quit. The market doesn’t care about your impatience. From now on, adopt the mantra: “Slow and steady wins the trading race.” #4: I’M DONE: Doubting Myself Self-doubt is the silent assassin of trading success. It creeps into your mind, sows seeds of uncertainty. Before you know it, you’re second-guessing every move. Stop! Remember, you are the BOSS of your trading account, strategy and results. So act like a boss. Get rid of self-doubt and embrace more confidence. You have got the skills, the knowledge, and the experience. It’s time to trust yourself and let your trades reflect that trust. #5: I’M DONE: Missing Great Opportunities Regret is a bitter pill to swallow. Especially when it comes to missed trading opportunities. I’m sure you’ve kicked yourself one too many times for hesitating when you should have pounced. I still kick myself when I miss trades! We are human. We can’t see everything all the time. But remember this. The next trade is always on its way. You don’t need to feel FOMO (Fear of Missing Out). Always try improve on spotting and taking advantage of better trading opportunities. And know that taking trades (no matter how good they look) are always difficult. But they need to be taken. They need to be followed. From now on, be bold, seize the moment, and make the most of every chance the market throws your way. FINAL WORDS: It’s all on you! Every financial decision you make, is your responsibility. So remember to say out loud what we are DONE THIS YEAR. #1: I’M DONE: Making Excuses #2: I’M DONE: Feeling Emotional #3: I’M DONE: Rushing the Process #4: I’M DONE: Doubting Myself #5: I’M DONE: Missing Great Opportunities
TVC:SA40Education
by Timonrosso
1
What Makes a Trade – Unveil the pillars of profitable tradingTo trade well is nothing more than a calculated dance on the trading floor. You need to navigate the volatile seas of markets and understand the essential elements of a trade. And whether you’re a newbie or the MOST experienced trader out there, you need to adopt the same quintessential factors with your trading. And that is, the elements that make a trade. Let’s get into them… Position Size Imagine building a mansion without a blueprint. That’s what trading without considering position size feels like—chaotic and prone to collapse. The cornerstone of any robust trading strategy is for you to figure out the right amount of exposure to each position. It’s not just about the quantity of trades but the quality of each. You need to be precise in the position sizing with each trade. That is to maintain your risk and money management. That is to make sure you will only deposit a certain amount into your trade. And it is to ensure you have enough money to take on new and even higher probabilities of trades. Precision in position sizing is the silent architect behind the towering fortresses of successful traders. Entry: The art of timing of execution Whenever you enter into a market, 98% of the work is done. You have everything lined up according to the criteria, strategy and plan. You already have your idea on whether a market is likely to rally on up or fall off its horse. It’s not just about being in the market; it’s about being in the market at the right moment. Risk Level: Taming the market beast In the wilderness of financial markets, risk is the untamed beast that can either devour or be tamed. You need to be able to recognize the risk levels you’ll set to contain the beast. Where to place your stop loss The calculations of where you are NOT most likely to be hit Your risk per level and what you can stand to lose. Your risk level is your shield to protect from unexpected peril. You have to have all your calculations to lose a battle but NOT the war. Reward Level: Harvest your fruits Yes a MAJOR element to trading is RISK. But it’s also about reward, or else why would we be doing it? You need to meticulously set realistic reward levels that mirror the potential gains of a successful trade. Your reward must ALWAYS be more than your risk. You need to see the potential and likely future for the price to hit the take profit. Profit and Time Protection Levels: Safe-guard your winners and cut your losses Trading unfortunately is NOT always 100% mechanical. You need to safeguard your positions at times. What if the position becomes a non performing investment?’ And you’re losing daily interest? Well you need some type of time stop loss. This will get you out of your trade at a certain period so you can look for better positions. Worst case scenario you lose less than expected. Or you even bank a bit of profits as the trade remains in the money. FINAL WORDS: Trading is a game of calculated strategy and skill. But there are pillars of trading, you can’t avoid including: Position size, entry Risk level Reward level and Profit and time protection levels. These will help you form the bedrock upon which the palaces of prosperous trading are built. As you embark on your own trading odyssey, remember: mastery of these elements is not just a choice; it’s the key that unlocks the doors to financial triumph. So make sure you have these elements ready to execute to make a trade happen.
TVC:SA40Education
by Timonrosso
7 Monopoly Lessons for TradersYou can learn a lot from the classic board game we all know and love: Monopoly. And as a trader, if you decide to play it again with your spouse or children – you’ll find the game to be very different. That’s because you have a better sense of risk, reward, probabilities and money management. You have the patience to grow a sizeable portfolio and eventually WIN! But before you do delve into your past, I want to share 7 important lessons I learned about trading from Monopoly. Hold Cash: The higher earner has the upper hand In Monopoly, the richer always has a stack of cash at the ready. Just like the Casino (where the house holds most of the money). And where the money is, is where the advantage lies. Similarly, in the trading arena, the money you have on hand is your golden ticket to seize profit opportunities. You know when they say, we are still counting our money? It’s because you have cash in hand rather than tied up in different assets. So with trading and with Monopoly, cash is king. You always need money to: Have funds to buy or sell more markets Be able to control your risk and money management Work on your Drawdown control methods Peace of mind you’re in it for the long haul No matter how many trades or positions I take, I always make sure to have at least 90% of cash in the portfolio at any one time. Be Patient: Not every roll is a winner Impatience is the enemy of traders. In Monopoly, you don’t win by making reckless moves at every turn. It’s about waiting for the right moment to strike. It’s about being patient to wait for the right property to buy and take advantage of. It’s about waiting for your opponent to land on your property for you to get paid. All in good time my friend., Apply the same philosophy to trading. The market will throw its share of doubles and snake eyes your way, but success lies in patience and strategic precision. You need to be patient for: The high probability trade to line up The markets to play out The drawdowns to end eventually Your portfolio to grow at a slow but steady rate Patience is EVERYTHING. Monopoly teaches us the value of holding onto our hard-earned cash. Similarly, in trading, preserving your capital is the name of the game. Avoid risky moves that could bankrupt your portfolio, and remember, sometimes the best move is not the flashiest one. Don’t blow on the most expensive stuff Just because Boardwalk has an expensive hotel doesn’t mean it’s the winning move. Similarly, the most expensive stocks or markets like Brent Crude or Indices like JSE ALSI 40 aren’t always the path to success. First, you might not have enough funds to accommodate the positions. Second, the markets might not have aligned perfectly to your strategy. Third, a high price market might be in a BUBBLE which is ready to pop. Fourth, it might be stressful putting in a large margin of funds to hold a more expensive stock i.e. Facebook, Berkshire Hathaway, Apple etc… Astute traders know that value can be found in unexpected places. You might find even better profit opportunities in other Blue Chip stocks that don’t even cost 1/10th of the price. Diversification and Opportunism: Building houses on every colour Monopoly teaches us the power of diversification. There are different properties with a variety of prices and conditions. You need to learn how to spread your investments wisely, and be opportunistic. Just as building houses on every color can secure your Monopoly victory, diversifying your portfolio across sectors, markets and positions can mitigate your risk and boost your chances of success. Strategic planning trumps luck I have to admit that, luck does play a role in both Monopoly and trading. It is luck to not roll the dice and land on “Go to Jail”. It is luck to not pick up a Chance card saying “You have to pay rates and taxes”. Same with trading. It is luck getting into a high probability trade and then the market actually playing out. It is luck being in a strong and favourable market environment for your trading system. It is luck having the market price shoot up past your take profit due to some external event. But trading and Monopoly are both very much strategic planning processes. You need to plan your moves carefully. You need to act on your moves, based on probabilities. You need to risk accordingly to not go bankrupt. You need a strong and well-thought-out trading plans. Conduct thorough analyses, and stick to disciplined strategies. And this is how strategy and luck will help you increase the chance of success. Negotiation mastery Monopoly is not just about rolling the dice; it’s about negotiation. You are playing against opponents of different advantages and styles. You need to learn how to negotiate, aid and help each other – before you beat them! I don’t know how else to explain this :D. Trading also involves striking deals. You’re hitting bids (when selling) and offers (when buying). You’re betting against your counterparty (investor, trader or market maker). You’re negotiating prices and moves. The choices you make will give you the significant edge and help streamline your profitable journey. Passive Income Key: Collect $200 as You Pass Go The exciting and genius of Monopoly lies in the sweet reward of $200 every time you pass Go. You know that feeling of waiting and playing your turns. Going through the good Chance cards and the Bad (going to jail). But when you are out and you pass Go, you can to collect your wage of $200. This is your special passive income secret weapon. You don’t just stick to what you have, you build on it and use what you newly have to grow your portfolio. The same works with trading. Each month, you receive a salary. And you spend, save and invest. So if you want to grow your trading portfolio using the compounding strategy, you might as well build on it. You might as well accelerate your trading journey. You might as well let your money work for you! Embrace the power of compounding, re-investing and depositing, and you might find yourself collecting much more than $200 as you navigate the trading board. Let’s sum up the Monopoly Lessons Traders Can learn: Hold Cash: The higher earner has the upper hand Be Patient: Not every roll is a winner Don’t blow on the most expensive stuff Diversification and Opportunism: Building houses on every colour Strategic planning trumps luck Negotiation mastery Passive Income Key: Collect $200 as You Pass Go FINAL WORDS: The trading board is yours – now go bankrupt the market, one strategic move at a time!
TVC:SA40Education
by Timonrosso
5 Important Trading Protection LevelsREMEMBER No matter what stock, index, Forex or other markets you’re trading, every trader needs 5 protection levels. Stop loss to stop yourself from furthering losses Time stop loss to get you out of non-performing trades Adjusted stop loss to lock in profits when the market moves in your favour. Risk % per trade to only lose a certain amount of your portfolio % of Drawdown before you HALT trading – when the market is not in a favourable environment to your strategy. Short and sweet but VERY powerful to apply to your trading. Do you have any other protection levels?
TVC:SA40Education
by Timonrosso
1
Are we in LAZY FEBRUARY traders? Q. "I heard that there is a phenomena called “Lazy February”. Could you explain why it’s called that and what I should watch out for as a trader?” A. I have not heard that term in eons! Here’s my 10 cents on how Lazy February got this name. Short month effect February is the shortest month of the year. And because so much happens in February, many investors like to play it safe and observe. Most investors tend to wait for March when the markets have chosen a direction, earnings are out, taxes are paid and they are ready to invest again. Year-end position squaring Traders often close out their positions at the end of the year right through to January. And this is for accounting, performance evaluation and tax purposes. This process is known as "position squaring”. But the big influencer is tax. Closing off the tax year In many countries, February is a time when individuals and corporations start preparing for tax filings. And this can influence investment decisions which can lead to either selling their positions or adjusting their portfolios for tax efficiency. After February and going into March, we should see a higher volume of buying and investing in the markets. Earnings season February is also known for major earnings releases – Especially in the U.S. Investors during this period prefer to watch and observe. This way they’ll be able to see the forecasts versus the actual results. Once the numbers are released, that’s where they’ll have more of an idea of what they want to invest in and what to buy or sell in March and the coming year.
TVC:SA40Education
by Timonrosso
1