So there is no one magic formula that works in the markets every time. We often see
some of our pro traders being on the opposite sides of our trades. The volatility in the
markets mean that we can both sell and buy the same side of a trade and make money.
BUT other than our pro traders, 90%+ of traders lose and out of those who lose, many
traders lose everything and “blow up”. I know traders in far too many other chatrooms
who have lost 50% or even 100% of their money on just one or two trades due to flaws
with their approach and that just isn’t right. Trading doesn’t have to be like that if you
have the proper mindset and risk management in place.
Rule #1 always has been and always will be CUT LOSSES QUICKLY. How does this
happen? Green, Red, Stubborn. That is how it happens. Why does this happen?
It’s psychological. A trader gets a bit of profit and then becomes attached to the profit.
So when it goes red they feel like they have been cheated or robbed. Many studies show
that people will go out of their way to gain back something they feel they have lost even
if they would not go to the same lengths to obtain the same thing they never had in the
first place. That’s how small losses can turn into big ones quickly. Simply exit the trade
when it stops going in the direction you wanted and place your stop.
No really PLACE YOUR STOP.
2. DON’T GO ALL IN…Where does that phrase come from? Vegas. Vegas is for
entertainment not for making money. IF you do actually GO ALL IN your simply gambling.
Gambling is a sure fire way to blow up your account. NO matter how sure you are on any
trade anything can happen and if anything can happen then it surely will. Maybe not today
maybe not tomorrow but sometime soon and when it does don’t be ALL IN or you will
BLOW UP. Sure this means it will take longer to build your bank but at least you will have a
bank in two years. There is plenty time to use bigger point sizes when you have a
3. AIM FOR SINGLES, NOT A SIX…obviously it’s more fun to try to find a huge winner
than a small winner, but we always aim to make 1%, 2%, 3% gain at a time, we NEVER aim
to make 10%, 20% or 50% like too many newbies and gambling types do, usually missing
their mark and not learning to take singles over and over and over again instead of going
for six and being bowled out. The cool thing is that if you aim small and miss small, sometimes
you will hit the occasional six just by being so dead on with a trade.
4. THE MARKET IS NOT ALWAYS RATIONAL SO ACCEPT IT so even if in the end you
are proven right, why risk blowing up and losing everything just so your ego can feel better?
There’s a famous Wall Street quote that says the markets can remain irrational longer than
you can remain solvent and this holds true for both buys and sells. All time highs and higher
highs are far more common than you think. Never lose track of proper risk management on
your position. Come out of the trade if it isn’t working.
5. UNDERSTAND THE MARKET IS COMPLEX WITH MULTIPLE INDICATORS
INTERACTING AT ALL TIMES
and once you do that no longer will you question or whine about why the market doesn’t do
what you want even though your favourite indicator or pattern is setting up perfectly but still
the market goes against you. Listen to our analysis and over time you will develop a resilience
and understand when your indicators are strong or weak.
6. STICK TO PATTERNS WITH A HISTORY OF SUCCESS…after over two decades of
experience in the markets we only ever teach set ups that have a long standing history of success
AND that will exist for a long time to come as they are all based on market inefficiencies.
7. NEVER SAY NEVER is not just a saying BUT a great way to stay safe in trading as ANYTHING
can happen and the sooner your realise that the safer you’ll be. I can’t tell you how many
newbie traders blew up or risked blowing up on a sure fire trade that has come in
24 times out of 27 it’s that one or two times that will blow up your account and just know it is coming.
Good Luck! and remember just DON’T MAKE A FATAL MISTAKE.