Daily Wisdom 04 - Less is moreSometimes the most beautiful things happen without human intervention.
Success
Daily Wisdom 03 - It's all connectedThose who intently live their life will manifest their intentions. Those who live their life passively will be carried away like leaves in the wind.
What are your odds of making it? How many get rekt?We have all heard anecdotal evidence.
Every one throws random numbers around "be in the 80%", "be in the 91%", 99%, 90%, 75%, all sorts of numbers, usually the failure rate is pretty high and success is low. Day trading, or longer term. Real estate same story. And for long term investing you will hear "90% don't beat the market".
I am looking at speculating here rather, althought alot of numbers take into account long term investors so keep that in mind (I'll repeat it when accurate).
What is very often said is that winners have high reward to risk, and aren't day trading.
From what I have seen around it looks to me that the people that make money day trading pretty much all scalp support levels with level 2 market data, or that sell programs and signals.
No personal and anectode from here on, or maybe a little as bonus, I will look at studies.
1- AMF (french regulator) study of a popular broker clients over 4 years.
The name of the report is "Étude des résultats des investisseurs particuliers sur le trading de CFD et de Forex en France".
Now, let's get into the fun stuff.
Seems small compared to the markets (forex + stocks + indices + more). Do retail traders getting wiped out really change much?
Big institutions make more profit than a couple hundred millions over 4 years...
Large speculators that make money, must be from hedgers and whales mostly. I don't think retail holding bags & gambling adds much.
A large part of the lost money came from idiots placing tons of orders. How much is lost in spreads?
Checking by volumes, those that did 1 to 10 million lost on average 3700 euros.... Say the average volume they did was 4 MM, that's a 0.01% loss...
Looks like they are coinflip warriors that day trade and just lose money with spreads?
My opinion the very few orders ones (losses are quite high compared to very small number of operations) are those that either go "all in" an a hunch and lose and leave, or get lucky, get excited, go in big, get shrekt, get scared, leave. And also those that start and can't stop losing, bad luck streak, disgusts them so they quit.
So ye, the ones taking "big" losses early one are the luckier ones, they give up quick and never come back and don't waste time & take massive losses.
2- UKNF (Polish regulator) reports
"Komunikat w sprawie wyników osiąganych przez inwestorów na rynku forex" (Communication on results achieved by investors in the forex market)
2 reports. Can't find the older one unless this is it.
"The New York Fed’s Foreign Exchange Committee volume survey released in 2016 shows that trading by volume “non-financial customers” in April 2016 was at roughly 7% of all FX trades."
Nice, nice. No, 93% are not making money off the 7% of small fish (just making a little, a rounding error in their profit).
3- FXCM report (they're a broker)
I am so thankful for all of the 16-24 yo Forex experts, I can't help it I always get hysterical when I see their little faces or even just talk about them 🤣
If I meet someone that looks all defeated and tells me he got scammed by such an individual I guess our friendship will quickly be over because I won't be able to help just laughing in their face.
I roasted an "educator" on tradingview & twitter, he threated to sue me + others. After he had already scammed people. And he repeated it.
TV staff correctly banned him permanently, haven't heard from him since. Lots of clients were defending him. All their money is now belong to him.
4- 1999 NASAA report
"REPORT OF THE DAY TRADING PROJECT GROUP" by the "NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION".
As we have seen the vast majority of retail are day traders, so this sort of will tell the same story.
In 1999 the business was not as developped, a largest percentage of participant very likely were more seriously, most no effort get rich quick with my 22 yo educator indicators gamblers joined later.
5- Brazil 2019 study of day traders
I'm just reading an article here. I think the study can be found on the SSRN website. Had another paper from this site but it was a study on a voluntary survey of traders lol, so not worth anything.
"We observe all individuals who began to day trade between 2013 and 2015 in the Brazilian equity futures market, the third in terms of volume in the world, and who persisted for at least 300 days".
Ok so this paper is worth something then.
They quote some old papers when day traders didn't compete with HFT firms, high success rates of course (I don't know if it counts locals, because I mean that's not speculating).
6- Article from Tradeciety (quoting their sources)
7- Do Smart Investors Outperform Dumb Investors?
2009 paper by Grinblatt Keloharju Linnainmaa. From... Some Chicago school of Business?
Found it on Yale department of economics site. Robert J. Shiller personal page (Shiller PE ratio). Seems legit enough.
8- What about non day-trading market participation?
Well, there is absolutely nothing! It's all about day trading. Like not being clinically retarded is extravagant.
So to sum up:
The ~76% money losing rate european brokers display on average, I think is over a quarter.
China literally totally banned leverage with FX (wonderful country), and you wonder why Bitcoin and other ponzi schemes have so much success?
And crypto baghodlers actually expect China to not entirely ban crypto eventually...
They are slow and incompetent but they'll get there.
And this is a classic commie tactic: Let them think you are pro crypto, they pop their head out, you can arrest them.
When they'll have arrested all those involved with crypto they wanted to arrest, they are going to lay a blanket ban on all cryptos.
There is no hope, there is no light at the end of the tunnel, more and more brainlets are treating the markets like a casino, and it might only be a matter of time until it gets completely banned for retail (thanks, always protecting the morons).
Stats are not that bad. 90% lose over a 4 year period? Maybe 90-95% of all those that join end up eventually losing or quit after a short while?
It's not that bad. And remember a whole lot are stupid day traders, and they destroy the average.
In the first year 60% of restaurants don’t make it past their first year and 80 percent go out of business (get rekt) within five years.
In the first year 80% of retail traders don't make it past their first year and 90% go out of business (get rekt) within five years.
Not much surprise here. Lmao at all those celebrities restaurants that fail completely! 😄 Not talking about famous chefs, I mean action movie actors & the such.
Restaurants failure rate isn't counting the recent "min wage raise" in the USA. Good luck with those. Success rate would honestly go to zero. Simple maths. Politicians are really really stupid.
House flipping is a very intelligent activity and has about the same success rate as day trading.
US bureau of labors stats show that small businesses in general have a 50/50 survival rate over 5 years and 25% over 15 years and that's quite high.
Most "educators" are either young or old (uuu the experience right). Studies show middle-aged men start the most successful businesses.
Middle aged men are too busy doing actual stuff? I am between young and middle aged myself if you were wondering.
I could go look for more stats but it's all the same. Success rates are never 100%. And the harder something is (because of hygiene regulations, because of cognitive demand), the lower the success rate.
Medical schools have an acceptance rate of 7% on average, but that's not saying that 7% of all people that apply get in.
"MCAT and GPA Grid for Applicants and Acceptees to U.S. Medical Schools, 2017-2018 through 2019-2020 (aggregated)" ==> 42%
Teens with low scores don't even bother applying thought. And once in school how many end up with a doctorate?
Sooooo... Speculative trading is one of the hardest activities, it is one of the hardest psychologically and most cognitive demanding.
I crack up when people try to cheer themselves up and go "smart people don't make good traders because emmm ego n perfectionists n stuff".
It's really not surprising that the failure rate would be at that level.
Medical schools have a barrier to entry, which is why the failure rate is not as high, but absolutely anyone can start trading or open a restaurant.
Obviously failure rates will be higher, and much higher in the case of speculation.
Just imagine the average person. He's not very smart. Most people are somewhat isolated from the rest of the population. Engineers are surrounded by people with master degrees and doctorates, not janitors that can't add 2 and 2 and think Bloomberg can give 1 million to every one (lol).
The average person is not very bright, and 50% people are dumber than this!
In the 90% failure rate you got all kinds of delusional clows, all the bottom feeders are here. AND! Remember! This includes a big majority of day traders!
I don't know what the numbers are for non day trading, but over a 5 year period the failure rate might only be 70% or so!
Cruel reality is cruel. If you are rather smart, or at least non-retarded. Let's say you are in the top 25% of people (> 110 IQ), you have a real chance of making money if you put the effort into it. Probably doesn't need to be a genius. Just to make some money now I'm not talking about making millions either. 90 to 110 IQ I don't know. Slow people under 90 IQ, it's my personal opinion they can't possible be successful.
Just my personal opinion. Like my personal opinion is that people with (today's) IQ < 90 have never and are never going to solve any math problem, or find some new elemental particle, or build a rocket, etc. If they manage to remember how to lace their shoes and fill a welfare request document that's real good, and that's all society will ever require of them 😉.
Marathons, Chess, stuff where you can't cheat. Masters in those disciplines reached the peak after training for decades.
Musclemen... Activities where you can take steroids...
"The Mountain" became one of the strongest men in the world 2 years after lifting his first weight. Now his face is deformed 🙃
Strongment events that rely on strong joints not just muscles, in other words steroids don't help, interestingly their records haven't been broken in a century+
The public thinks they can get something for free. They think they can have success in something instantly, like it's a web link, just clic and here y a go.
The gall. You got people so stupid they don't even understand how stupid they are, they struggle with the most basic concepts, and they casually think they're the greatest mind of all time, and will become some super hero beating HFT firms and outperforming Jesse Livermore etc.
That amount of delusion is absolutely staggering. What more can I say. Anything other than flipping burgers takes time and effort and brains or brawns and sees some people fail. The competitive activities have higher failure rates. The more competitive, the lower the success rate... Why am I even typing this...
But sure, I'm going to keep seing thousands of newbs land every months, and chase the twitter expert, or look for the person that joined 2 months ago and said "price go up" just before the price goes up (not joking I saw someone like this recently and the update idea after the breakout had literally in the first line "Volume is low not a good buy I am looking to short", literally the first line, and newbs that saw "green candle. price go up" are celebrating the "great call").
Absolute pieces of ****. I don't always read everything, or watch entire videos, I read diagonally and I think every one should, I pick bits in articles I am interested in, and I think that's what people should do but maaan. If you're not even going to bother reading the first sentence and are jsut looking for the traders with the most successful apparent last few calls, you really deserve to lose everything.
It's like the USO buyers that didn't bother finding out what they were buying. Or stock & FX traders that never touched a future and then went all in Oil without learning what it was or anything.
That's really insane to me. They certainly deserve to get wiped out.
If I may give some tips around all this:
🧲If you want to be successful trader, you must read it🧲🌆Good night, guys!👍🏻 Each of us wants to be a successful trader! 👌🏻
🧷Just as a good technique doesn’t make a profit with the wrong tactics , the right tactics wouldn’t succeed if the overall strategy is wrong . 🧷
🏹With the help of tactics , battles are won, and strategy makes it possible to win a war. 🏹
🔗The strategy determines the opportunity: it doesn’t find an advantage on certain days, but establishes a common source of advantage in the market. 🔗
🧿Ideally, tactics are an instrument of strategy , just as technique is an instrument of tactics .🧿
🔺That’s can be imagined as a kind of pyramid.🔺
💪🏿💪🏿💪🏿Here some tips, how to become a successful trader:
📌focus on fully following your system on every trade;
📌think about weekly or monthly profit, and not about the results of individual transactions;
📌 monitor and analyze your performance;
📌at the end of every day, every week and every month, evaluate your actions and strive for greater success;
📌keep a positive mood;
📌avoid the negative effects of fear and doubt about your competence;
📌teach others how to maximize productivity and with the help of this, improve yourself.
If you liked my post, subscribe and put 👍🏻
💋It will be grateful for your feedback🐾
✍🏻Write in the comments topics, that you would like to read💕💕
Stay with me❤❤❤
Your Rocket Bomb🚀💣
Daily Trading Cheatsheet for SuccessThis video explains exactly how we start our trading day and the process we use to condition our mind for trading success every single day.
My top 10 qualities for speculating successHere is my personal list
1- Adversity
This is the biggest one. 1 & 2 are the biggest one.
You know what we call those that have low adversity?
Starts with an L. Ends with osers.
You should not flinch when you get unlucky, when things are working against you.
You should love this! Makes it harder! Great! You should welcome difficulties.
Every year millions of clowns come and "give it a go". They are great for providing liquidity to markets, filling my orders.
And every year millions of clowns do what good little quitters do and never come back.
There should be a rage burning in you. You will not stop until you have reached your objective. NOTHING WILL STOP YOU.
"Awww but life has been so hard to me and bla bla bla" ==> GET OUT THEN! There is no place for those here.
You should be borderline masochist. Each time the market hits you you come back asking for more.
Losses will not discourage you. You will NEVER EVER give up.
You will NEVER EVER break and make a mistake because losses made you feel bad or wins got you excited.
Nothing will stop you except total success.
2- Always want to compete / Will to win
It is necessary to want to win. And think hard (not work hard) about how to stay at the top once you get there. Always maintain a competitive edge as Warren Buffet says.
All you care about is total victory. Every day you obssess about markets, and think about what you need to be the best.
This is true in everything, but especially here, it's a highly competitive game.
You want to know everything about trading (unlike the pathetic clowns crypto hodlers that only care about "will price of my loterry ticket go up" they are really the ultimate example of what not to do).
Gamers that become the best are seen as kids that play all day long non stop and rage at their teammates when they mess up, and rage when they lose.
You have to rage when you mess up. Rage when you have a losing spree. "Trade like a robot beep beep no emotions" PUAHAHA what a joke are they serious?
Rage when you don't succeed and do what it takes to be. Review your trades over and over obssessively. If you have to shoot yourself in the leg and lose 5% of your account to learn you lesson do it (not financial advice).
Winning should matter more than life itself.
Top athletes are taking plenty of drugs that will ruin their lives past 35 and they know it. They do everything to be the best, and accept the sacrifice of their older years.
Luckilly with speculating you don't have to suicide :D
You got to have a competitive mind. You got to absolutely want to win.
You should feel good when you are having success and see the other suckers blow up and quit.
Going on tradingview, myfxbook, checking the profiles of accounts that were active (and usually argued alot) a few years ago, and seing they have been offline for 12 months or more should put you in a state of euphoria. You should feel your heart starting to pump faster, and get a rush off seing other inferior traders fail miserably, while you are approaching the top of your game.
90% of traders will fail within two years, and within five years 99% will no longer be trading.
You need a winning mindset. You are not here to "give it a go" (makes me vomit). You are not hoping to win. You are here to win.
If you remove all the delusional unintelligent, gamblers, "I'll give it a go", and only keep the "I'm here to win", stats are waaaaaaaaaaaay better than 10% and 1%.
3- IQ: Systematic intelligence
Some say it does not matter.
Some clowns even say it is counter productive. I'm going to go to town on them. I'm going to write a lengthy paragraph on this "taboo" subject.
How does the ability to process and understand more make you a worse speculator?
They use really stupid flawed dishonest logic "oh well they overanalyse everything".
Maybe flipping a coin is the best strategy? Just really sad excuses.
People with higher IQ make more money... Income goes up in a straight line with IQ...
Maybe speculating is the big exception?
People with higher IQ are more disciplined... And discipline = much better results.
I have a hard time imagining someone having great intuition and thinking the opposite of every one without being smart and without analysing/reading a lot. Makes 0 sense.
Other studies tell a similar story. At the top there are professors, MD, research (or number 2 after geniusses), finance is around the top but not like "150" on average they are a little high but not crazy high.
A few findings:
We find that low-IQ investors are more likely to herd in their buy vs. sell decisions but IQ has little influence on sell vs. hold herding.
High-IQ investors’ portfolio holdings outperform low-IQ investors’ portfolios.
Low IQ investors portfolio are less diversified.
www.erim.eur.nl
==> Low IQ investors refuse to take losses (baghodlers), herd into hype stocks (I extrapolate), go all in in a few investments. And obviously get not as good returns.
People of low intelligence keep repeating the same mistakes over and over. It's the same in every discipline.
The same patterns repeat over and over and they keep getting scammed over and over and never notice the pattern.
Just like a pattern in an IQ test... It might not be the perfect intelligence test but it sure is the perfect "pattern recognition" test.
Another quote from Warren Buffet:
"Success in investing doesn't correlate with IQ once you're above the level of 125. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing."
See? He never said "Oh ye sure buy total garbage when there is blood on the street and don't worry you can be mentally retarded and reach the top 5% investors".
Bookworms are seen as smart and they don't make good traders. All those "expert bookworms" economists and other, aren't making billions, and this shows it takes more than being a nerd to make money. People that think this implies being dumb is a strength are honestly too stupid to trade.
"High-IQ investors also exhibit superior market timing, stock-picking skill, and trade execution."
papers.ssrn.com
16% of the population has an IQ above 115. 25% has an IQ above 110. That's a good start.
IQ is not all it takes. But if you are under 110, sorry, you're going to have a really hard time. Why not try something else?
In an academic environment, past the first few years, people with an IQ under 115 are considered stupid. You see very little of them.
Finance is not a university, but it is a cognitive intensive activity. As IQ goes up you get diminishing returns, but the flipside is as you go down intellectual abilities become a exponentially growing handicap.
And having some diploma is pretty useless. Being street smart, not gullible, is way more important...
People (especially on the lower end of the scale) really hate this. It's a big taboo. They cannot stand being less intelligent. Always finding excuses and trying to comfort each other.
But facts are facts. Nature is cruel.
From some paper, IQ had a very high correlation with training success in the military and performance at highly complex jobs, but it was much lower for creativity and leader effectiveness. Abraham they say wasn't that bright (the US were pretty small back then thought). Athletes are not exactly famously smart. Probably all of the celebrities climate activists are pretty low too... "Useful idiots" (Lenin quote).
Don't trust internet tests.
The problem here is every one thinks they are borderline genius (I remember reading a study where only 2% of respondents claimed they were below average), and even if they find out the truth they'll be in denial.
I guess we need them to lose & baghold and add to losers so we may get filled and win :)
Someone has to take the opposite side of my trade.
4- Emotional stability
Not caring what others think. Also having a big ego (but that doesn't get in the way).
Includes being self aware (is this emotional intelligence?).
I'll just quote Warren Buffet here:
"You don't need a lot of brains in this business. I've always said if you've got an IQ of 160, give away 30 points to somebody else, because you don't need it in investments. What you need is emotional stability. You have to be able to think independently, and when you come to a conclusion you have to really not care what other people say. Just follow the facts and your reasoning. That's tough for a lot of people. But that part, I was just lucky with. I was born that way."
One of Jesse Lauriston Livermore biggest loss was in cotton when he listened to someone giving him troll advice (guy was selling while advising to buy), he somehow got himself manipulated when he knew, and he said he knew, the facts were telling him otherwise.
Lmao imagine changing your mind on something because some brainfart that thinks he knows something tells you he is 100% sure. LOL! Here ego CLEARLY protects you.
I'm cracking up, I just think of absolutely moronic crypto investors when they try to convince common sense people, with their risible ridiculous logic.
Most often than not they make zero sense, contradict themselves even, and don't even know it.
Ignore the herd mocking you because they are too stupid to understand what you do. They're nothing more than cattle on route for the slaughterhouse where they will be turned into delicious steaks.
5- Discipline
Straightforward...
If you are not disciplined, you will NEVER be a successful speculator. Or investor. Maybe you can (barely) make it as a spread trader or arbitrage that I don't know.
Just take the good setups avoid the bad ones. Get in when you should get out when you should don't get out when you shouldn't.
Idk I am trying to find something to say about this...
Removing a stop loss because "I really can't take a loss now" or moving to breakeven because "I want to feel relieved" or getting out early of a winner sending all the right signs or suddenly going 25 leverage in Apple puts after losing your money to make it back "it's within my personal risk tolerance" is plain retarded. That's it. Nothing more to it. Literally retarded.
6- Logical not "emotional"
It's all about processing clean facts logically.
Funny but a study found that traders with more prenatal T, by checking their fingers ratio (the higher the prenatal hormones the smaller the ratio - index is smaller - the lower the empathy the higher the systemizing abilities).
content.time.com
Empathizing & systemizing abilities are as far as I know exclusive, the more you have of 1 the less of the other.
High systemizing abilities are required to make it.
I will also add the E-S theory is a better predictor than gender of who chooses STEM subjects according to some psychologists.
Obviously, they get alot of hate (from the idiotic "we're all perfectly equal" club).
I mean... it's obviously true. Or let's say very very probably true.
IQ tests are very much designed to test for intelligence & systemizing abilities rather than "all" intelligence, which is all we care about as speculators.
Being able to work quickly with numbers is going to be more useful than being able to detect how someone feels.
7- High appetite for risk
Don't pay too much attention to this, it will make more sense later.
Speculating is literally about taking risks. If you don't want to take risks I don't even know why you are reading this.
Maybe you'll win maybe you'll lose. You have to want to gamble that money on each bet and risk losing it, to sometimes get returns.
And when a great opportunity presents itself, when the conditions are right, you should WANT to risk big. Within reason.
When Stanley Druckenmiller told George Soros about a short opportunity and that he risked more than usual, Soros told him he was crazy and that was terrible risk management - because with such an opportunity he should have gone with way more size at least double what he did. They still only risked 2% there, but it was way more than usual.
Lists of famous traders are full of examples of really big bets (400 leverage against the nzd...), sometimes they go wrong but sometimes they go right.
Jesse Lauriston Livermore is known for making alot of really huge bets. He made - inflation adjusted - 1.5 billion USD when he shorted the US stock market in 1929.
He kept having huge gains and huge losses even going into debt after going from nothing to big multi millionaire. He took it too far XD
8- Being risk averse, reasonable
HAHA!
It really is important to be reasonable, risk averse. You want to avoid losing everything. You want to avoid wasting your capital into garbage bets.
You shouldn't be so risk averse than when an opportunity presents itself your just freeze and cry yourself to sleep.
When the opportunity comes, hit the gaz, become a degen gambler - within reason.
"Contradictions" like this is part of why over 95% don't make it. And here neo-cortex, basically consciousness, is going to make a huge difference.
The more "advanced" a being is the more self aware and can learn to naturally have qualities that are or appear completely opposed.
A smarter mind also is a more agile mind.
A strict set of rules you follow like a machine can help... It's not the ultimate solution, the holy grail. It's a crappy suboptimal fix when all hope is lost.
Machines themselves... They replace humans at hft frontrunning firms that buy orderflow from robinhood, they use algos for market making, they execute statistical arbitrage at quant funds. They're not speculating and they aren't going to anytime soon / ever. Oh good luck with EAs LOL. Big obvious frauds.
9- Patience
There are several aspects to this
First, 7 & 8 continuation, you have to avoid risking money on random movements, and wait for the right setup, no matter how long it takes, you might even completely miss out and not see another setup for a long while.
Second, once you are in, let it run, don't be in a hurry to get out (WHY?). I don't even know why anyone would want to get out. It feels good to be in a winner. It's just dumb & cowardly. WEAK.
Thirdly, it's going to take time to get good and grow an account. Deal with it. Or join the wallstreetbets autists and pray to get lucky, and inevitably end up blowing up and maybe you'll end up on CNBC making anchors laugh.
10- Being interested
Obviously... Is it even worth adding to the list? Yes, because 10 is a nice number.
Haven't seen many masters that were in "for the lulz and lamboz" and were bored to death by markets.
How to be a Successful Forex Trader Segement 8Trading before News
News is a fact of Forex trading and while their are several ways to trade the Actual release and it's aftermath, today I want to focus on trading before the News. Understand that the decision to enter the market before News is a conscious one and you don't have to do it. Prime examples are days where interest rates, for a currency you contemplating trading, or Non-Farm payroll are being released. if you intend on trading before news, you must determine whether you are going to stay in the trade during the release or get out. Personally, I usually do not trade on UK interest rate days because the market, at some point, tends to go flat ahead of the release. I certainly do not want to be in the market at the time of the release. The reason is simple, I have no control!!
My methodology is based upon high probability trades with tight stops (20-30 pips). Having a position on at the time of the release gives up both my probabilities and my stops.
there are 3 possible outcomes:
1) if the release comes out against me, I'm toast, I will take a hit 3 to 5 times what I plan on (as most of you know slippage will cause the stop to be disregarded and or executed at the extreme of the move).
2) it comes out as expected, the trade may be okay but the market may whipsaw and with an expected widening spread, might get taken out anyway.
3) if the news comes out in my favor, I may still get taken out by either a quick whipsaw or widening spread or a combination thereof.
How can we make an informed decision on whether to trade or not to trade. In the last segment I talked about documenting and reviewing your trades. I use my documented trades to make my decision. This week, the UK had News releases on Tuesday, Wednesday and Today. On prior occasions, my trades set-ups were not effected by UK employment and retail sales (Tuesday and today's releases) so I opted to trade on those 2 days. yesterday (Wednesday) UK CPI was being released and historically my trades set-ups did not work, so I did not trade yesterday. (which was a good decision).
The last thing you want to do is be in a trade ahead of news and "Hope" that the news bails you out. Far too often I have been bit by that bug. Please don't find yourself in that position.
Just wait their are plenty of opportunities. In the next segment I will discuss how many trades do you need.
I hope you enjoy this post and find it helpful. I would appreciate if you "like" it and follow me :)
Stay Green my Friends :)
Allen
How to be a Successful Forex Trader Segement 7Trade Review and Documenting
Most successful traders review and document their trades, unfortunately, alot of new traders do not. "what's done is done, can't change it...." while that is true, you can, and imho must , learn from them.
Each afternoon, whether I take a trade or not, I review the market and my potential set-ups, executions, and trade completions. I firmly believe reviewing your trades can help determine what went right, what went wrong and how to improve.
Moreover, I track 2 valuable pieces of information, for me at least, which is DD (drawdown) and PP (Pip potential).
If you follow my trades, you will know that I trade the same set-ups, over and over again...almost boring. You will have also noticed that I use a set pip stop loss and profit target. I can do this because I have documented, literally, thousands of my trades and I have determined statistically, where a trade reaches the point of no return. Understand that I risk 2% of my account on each trade. which means that the tighter my stop loss, the bigger my return will be. And as weird as it may sound, the occasional loss, using a tighter stop, does not matter as it easily covered by the successful trades.
The screenshot above is how I documented Monday's trade in GBPCHF. It was Type 1 trade that was triggered on the breakout. I used a 25 pip stoploss and risked 2% of my account. Once the trade was up +25, I closed 1/2 my position and moved my stop to flat (I actually got +27.4). By doing that, I banked a 1% gain for the day, with no further risk. The trade continued to go my way but found support, retraced slightly, and I closed the remaining 1/2 for +54.8 pips. Very conservative trade management for sure but I ended up banking 3% on this trade. I will take that any day of the week :)
I print the screenshot as well as save it under both trade type and in an all screenshot folder. I review the past week on Saturdays and a full month upon the month's conclusion. I also periodically review them to look for any trends or things that I may have missed.
Moreover I track trades in an excel spreedsheet, that I will attempt to attach a screenshot of. This allows me to compile and easily access my data.
I hope you enjoy this post and find it helpful. I would appreciate if you"like" it and follow me :)
Stay Green my Friends :)
Allen
How to be a Successful Forex Trader Segement 6Measuring Success and Goals
As a Professional trader, you have 1 goal...Make money!!
That said, traders like to measure their success differently. Some use pips, some use wins v. losses, personally I use daily return. Understand my focus is on generating income and my mantra is "keep stacking positive days"
Imho, using pips to measure success can be misleading, I know of traders that will brag about making 300 pips, when they traded 10 micro lots for a 30 pip move. Obviously, the same could have been accomplished by trading 1 mini lot for the same 30 pips. Don't get me wrong, breaking your position down has a strategic purpose, if you have multiple profit targets or another reason to do so just understand that it was a 30 pip move and not a 300 pip move.
Win/Loss Ratio can also be deceiving. if you have an inverted (negative) Risk Reward Ratio (RRR) then win/loss ratio means nothing. You most often see this with advertisement's for EA's where the claim is 95% win rate, or something along those lines, and then you look at the trading history to find out the profit target are small 2-5 pips and the stops huge 75-100 pips. Again, don't get me wrong win/loss ratio is important as long as the RRR is not wildly inverted...(Scalpers for instance will often have a negative RRR but usually not more then 1-3).
Which brings me to daily % return, which, imho, is the best way to measure success. it is the the great equalizer. For example, if I told you Trader A makes, on average $500 a day, while Trader B makes $200, you might say that Trader A is a better Trader. However, if I then told you that Trader A has a $100K account while Trader B only has a 10K, that clearly changes things because now you realize that Trader A although making more money is only generating .5% per day while Trader B is generating 2%. Big difference.
Moving forward, Trader B's account will increase to the point where he will surpass Trader A's account. Hence why, imho, measuring success in daily, or weekly, % return is the best way.
All this leads me to Goals. I am often asked "what should my goals be" and this is the most loaded trading question there is. I say that because it does not matter what I can do, or what any other trader can do, it only matter what YOU can do at Your Current Skill Level . Psychology in trading is so important and permeates all aspects of it. Knowing what other traders can generate can be disheartening, even if, you are a good trader!
I feel the best goals a trader can have are 1) a daily/weekly % return that their current skill level permits and 2) constantly working to improve. It is number 2 that is most important. Their are so many ways to improve one's trading. More precise entries, better exits, smaller stops, larger profit targets, better trade selection, better money management, and the list goes on and on.
Reviewing and documenting your trades is so important in this process (and will be the topic of my next educational post). Today, for instance, I did not have a valid set-up, so I did not trade!
Understand I get up at 1;15 am est., everyday and start analyzing the market. I am up and I am ready to trade, however, their are times when it is better not to. As you know yesterday, we hit on 2 Solid trades, their is no reason to give any money back on a bad trade. I'm greedy that way...lol
I hope this post is informative and helps. If it does, I would appreciate if you "like" it and follow me :)
Stay Green my Friends:)
Allen
Profitable Trading - Tom HallCASINO MINDSET
Casinos consistently generate billions in revenue per year in what many individuals believe is luck.
Casinos don’t exists because of luck, they understand that over a series of events, the odds are in their favour.
As a financial trader you must become the Casino and understand that you will hit drawdown and period of losses, however if your continue to execute your trade plan your profitable edge will play out over time.
Remember, you have no control over when the markets will provide trade opportunities, you do however have control over your capital.
STAND BEHIND YOUR ANALYSIS
Do you experience a feeling of excitement or dread once you execute a live position?
If yes, there are a number of reason why these emotions would be present.
The first is you either have not backtested your strict entry rules, or have no idea what the historical results have produced.
By not knowing your numbers will inevitably cause emotional and impulsive behaviour as you continuously ask yourself whether or not you have a profitable strategy.
The second is your risk is far greater than what you are comfortable losing in relation to your account balance or net worth.
By minimising your risk allows you to have a clearer outlook when approaching your technical / fundamental analysis.
Third, you begin to second guess your technical / fundamental analysis, this could be present because you have viewed a more experienced traders analysis and their thesis was the opposite to yours, alternatively your simply not confident in your ability to read markets.
My advise, analyse the market with a clear and objective approach.
Once you execute your position, sit back and let your profitable edge play out over time.
THE HOLY GRAIL INDICATOR
There are hundreds of trading strategies that provide a profitable edge in the market, so why do traders struggle to become consistently profitable?
Novice traders enter the financial market with the illusion there is a golden indicator that will solve their financial problems.
I’m here to tell you the holy grail indicator doesn’t exist, in-fact implementing an indicator you have not backtested could expose your entire account balance to failure.
Building a profitable edge trading strategy requires significant hours of backtesting and preparation, implementing indicators that provide additional confluence to your thesis.
The more confluence you can build in a small trading zone the higher the probability of success.
Once you have generated a confluence based trading strategy that you are confident to implement, it’s key you fight the consistency and greed demons.
The ability to stay consistent when your strategy enters drawdown comes from the confidence you have in your backtesting data, if you have no historical data of your strategy, how can you build trust and confidence when things are not going to plan.
The greed demons kick in when your strategy is providing some healthy returns, the thought process of a novice trader is to increase risk in the anticipation of retiring quicker than expected, the experienced trader knows that this is simply a period where a strategies profitable edge is playing out, knowing a small drawdown is just around the corner.
Fighting the consistency and greed demons can be the difference between success and failure.
WINNING / LOSING
There is no such thing as winning or losing in a game that has no end, there is only ahead or behind.
Finance is a never ending marathon that requires stamina, just because you’re ahead today does not mean you can’t be behind tomorrow.
- Tom Hall
Humility in trading and lifeWhat's up guys, I am here to share a truth about life and trading (mostly life - it's more helpful)
I was wrong for the first time ever on Tradingview (50% of the time to be fair). Yet, I am still massively up? How can that be? Because I reduce risk and am conscientious of my trades. Being wrong has opened me up to criticism and I more than welcome it. I love criticism as much as praise, even more so. I am not worthy of praise, but I am worthy of criticism as an imperfect being - and so I expect it and anything else would be fundamentally strange.
The title of this article includes humility and indeed that is what I can laud about to you all the most. Someone called me arrogant on here and if I have come across that way, let me deeply apologize. I am not concerned with myself. Indeed, I am far enough along in my spiritual journey that I do not really fear death. I worship life, but I accept that I will die and that the world will go on because there are larger forces at play. Evolution will have more impact on humanity than I, or any human, ever will (Elon Musk is giving it a proper go by making a big leap towards commercial interstellar travel and colonization). Yet, in life, I hope to truly change people's lives and die and leave a legacy that will help all of humanity. It's the yin and yang of my life's philosophy: understanding the degree of infinitesimal value of my life, yet feeling a deep need to change the live's of others around me. You will find understanding reality has a lot to do with being able to be in a superposition yet not implode.
All pain and suffering and joy and pleasure will end. I will be interred into the space we know as nature and truly become one with it. On top of this, the universe is always losing energy - our understanding of physics tells us - and so our demise as a species is as certain as human understanding can make it.
With this knowledge, I can promise to you I am not arrogant. I would have to deny reality to be arrogant. I accept the reality I live in. If I have come across as arrogant, it is the nature of the teacher's role. I have teachers in my life, but for most of you, I am your teacher. You come to me for my authority and I share with you my knowledge. I only do this to help people. I do not do this to show off or fall in love with myself.
To tie this all into trading, I have one simple phrase: your PERCEPTION of reality is NOT reality. The markets are independent of your desires and wills. It is chaotic and unpredictable from our vantage point. Do not feel you have to be right, you do not. Nature is not cruel, it is indifferent. It is indifference that is most terrifying to the masses of humans. Be willing to be humble. Be willing to be wrong. Be willing to learn. These are my lessons for trading and life in general.
If I've been helpful, please like my work and follow me, it will help us both. (read my work if you do not understand WHY it helps you - I've spelled out my goals before)
-YoungShkreli
ps. I really (I say really because we were alone together for the first time) met someone today who is my clear mental superior and yet even I (little ol' me) could see profound gaps in his knowledge. This is why the exchange of ideas is important. We are all but small cogs in a VERY large system. To understand it all, we must confer and make use of the expertise of others. Dedicate yourself to finding the truth and learn. Find joy in the knowledge of others.
Strategy for ALTCOINS VS BTC (Beginners) - How To Split Your BTCOne of the many issues beginners face when trading ALTCOINS, is how to split their money.
Where to invest? How much to invest? How long to wait?, etc.
It happens that in this market, the cryptocurrency market, opportunities are endless, and we are bathed with a wave of new opportunities all the time, everyday, but this can turn into
a problem rather than a solution. A disadvantage rather than an advantage. Why is that?
Well, if we don't have a plan we tend to make mistakes, because of lack of experience.
We might join a trade and buy an altcoin, we feel all pumped up and hyped up, and feeling good and positive. The next minute another opportunity comes, and this one seems bigger and better, and somehow you don't want to wait, you move to the new one, on and on. Leaving loses behind each time you jump from coin to coin, and worst yet, the action seems to start, almost always, as soon as you go.
So how do we deal with this problem?
How can we plan to take advantage of all the opportunities, without worries and end up in success?
That's the question that I am here to answer for you.
THE 10% PLAN
Let's say you have 1 BTC (Or 0.10 BTC), or any amount for that matter, and a awesome, charismatic, helpful and optimistic trader, like myself (:P), posts a new idea and you want to join. How much of your capital will you put in?
Will you put in 100% Of your capital? NO.
"Well this is a huge trade", "This guy knows his stuff", "I will take the chance to recoup my losses", etc.
Remember that we do not, and cannot, predict the market. We look at signals which points to a certain direction, but the market can choose to do whatever it wants. That's why we set targets and also stop loss.
So instead of putting all your money in one place, divide all your trades in increments of 10.
You have 1 BTC, then you have the chance to open 10 trades.
You don't have to join them all at once. You are not losing anything if your money is resting fine.
This new trade I just posted, you can put in 10%. Set it and forget and you will do well.
The next trade, go ahead, another 10%. Now you are feeling good, because you have a plan and you feel strong.
And even if the trade goes wrong, you have 80% of your capital safe, and in the worst case scenario, you will see a 10% loss.
On the other hand, if the trade goes as planned, and you get to earn, you can be looking at a maybe a 100, or even 200 percent.
Follow this strategy wherever you go.
And trust, that in time, you will see your money grow.
NAMASTE.
HOW TO BECOME SUCCESSFUL IN TRADINGHi everyone.
I just wanted to share little bit of my knowledge and learning in the forex market with you all so you can benefit from it too.
I started learning trading 3 year ago. Fundamentals and News trading were what I started with. As a news trader you need to watch the market news on fundamentals (such as central bank decision makings on bank interest rates) and sentiments (such as short term news like geopolitical concerns in certain countries which moves the market for a short term only).... But it did not work out for me, so I moved on to a different strategy.
The next was support and resistance strategy which I am sure most of you are familiar with. It made me some winning trades but in the long term I was in loss.
Next I moved to a strategy called EW (Elliot Waves), I tried to master counting waves 1,2,3,4,5 it helped me a bit but it was also a failed strategy for me, I am not sure if it worked for anybody but it did not work for me.
Till 9 months ago I came across learning a concept called IMPULSE AND CORRECTION. When I started removing all the lines and indicators from my chart and just tried to look at the charts from a bigger perspective, I realised that price forms 2 moves only.
1. IMPULSE (a sharp move to upside or downside with long candles)
2. CORRECTION (a pattern which forms before an impulse occurs)
So to cut the story short, this is what I have been focusing on in the past 9 months and to be honest it has been making me money with proper risk management and PATIENCE.
I will go into details in my next educational posts about this strategy and how to identify corrective patterns so you can catch the next impulse.
For the time being please look at the above chart to learn something new from my experience so far.
Thank you for taking the time to read this as I know many of you are still struggling to make it happen in trading. Hope you learn something new from my posts and wishing you all good luck in this business.
10 Great Trading Quotes
It's always refreshing to hear from some of the trading greats that have made a killing on the markets.
Here are ten quotes that'll make you think twice:
"Volatility is greatest at turning points, diminishing as a new trend becomes established." - George Soros
Soros cemented his position as a trading legend when he banked billions by shorting the British pound ahead of Black Wednesday - the day that traders broke the pound. They didn't really break the pound, but they forced the British Government to pull it from the European Exchange Rate Mechanism (ERM), which it had joined in an attempt to unify European economies.
Soros made a pretty penny from trading volatile markets, opting to use it as an indication of a the beginning of a new trend.
"Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead." - Paul Tudor Jones
Jones is a Tennessee-born hedge fund manager, investor and philanthropist who as of February 2017, was the 120th richest person on the Forbes 400. The market is a living, breathing thing. It is constantly changing and it is always right. Jones understood this, which is why he stressed the importance of being adaptable and capable of changing your trading style to suit market conditions.
As Darwin famously said, it is not the strongest of the species that survives, nor the most intelligent, but the one most adaptable to change.
“You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” - Warren Buffet
A household name in the trading and investing sphere, Buffet has made more money than most of us put together.
You don't need to understand electricity to flick the light switch, and you don't need to understand the physics of a wave to be able to surf it.
“Superlative performance is really a confluence of dozens of small skills or activities, each one learned or stumbled upon, which have been carefully drilled into habit and then are fitted together in a synthesized whole. There is nothing extraordinary or superhuman in any one of those actions; only the fact that they are done consistently and correctly, and all together, produce excellence.” - Daniel F. Chambliss, Professor of Sociology
Here, Chambliss emphasizes the mundanity of excellence. Each factor that helps us make our trading decisions may seem underwhelming on its own, but bundle them all together and it produces some incredible results.
"I was seldom able to see an opportunity until it had ceased to be one." - Mark Twain
Trust your analysis before you miss the move.
Why bad psychology might be stopping you from succeedingYou are a Human. This is good.
You are capable of making complex decisions. You can identify patterns. You can enter excellent trades.
This is also bad. Between your ears is a narcotics factory that will put Heisenberg's mobile meth lab to shame.
You've entered a trade. This is it. The BIG one. A one-way ticket to infinite infinity pools.
Adrenaline dilates your pupils and switches off your digestive system. Suddenly you're not hungry anymore. Endorphins , stronger than morphine, are spewed out of the pituitary gland. Dopamine released from the middle of your brain means you can no longer hold in your excitement. This trade's a winner! Anandoline kicks in, you're hungry again. There's some the leftover beef bourguigion in the fridge. Who needs speed when you've got PEA ? Shit, the trade's gone sour! Suddenly you're anxious. It must be the serotonin .
Being Human is something we can't get away from.
But we can learn to master our mind.
A recent study by DailyFX analyzed 43 million real trades to measure trader performance. They found that across 15 most traded currency pairs, the majority of trades were successful .
Yet traders are still losing.
Why? They lose more money on their losing trades than they make on their winning trades.
So if you're reading this and it applies to you, you're probably very good at identifying profitable trading opportunities. Over 50% of your trades may well be profitable. Because you're Human and you're awesome.
So how can we be more profitable?
If your trading strategy has a high strike rate, then a low risk-reward ratio will suit - but you have to let the trades play out. If you don't do this, it will ruin your trading edge. If you fall into this category, then a 1:1 or 1:2 trade will suit you fine. remember to give the trade enough room to breath. I've seen traders make amazing calls, yet they place a stop loss 10-20 pips away from their entry. This is simply not enough.
If you're not so confident with your trading strategy and you've not been consistently making winning calls, you first might want to learn from people that know more than you. Knowledge is power! The second thing you might want to do is have a slightly higher risk-reward ratio (1:2 or 1:3, even 1:4). If you fall into this category, try identifying excellent setups on the Daily or even Weekly charts. Trading on the hourly charts and expecting 1:4 trades to come in every time simply won't work.
Set your stop and take, and leave it alone.
Close your laptop and enjoy a caipirinha by the pool.
Happy trading everyone,
AvidTrader
