10 TIPS FOR NEW TRADERS

5 giu 2023

Hello new traders

I want to give some tips for new traders,
This is bases on my mistake that I have done in the start of my trading journey

1. TREAT TRADING SERIOUSLY
If you want to become a professional trader, you must approach it with the rigour it demands. You can't live the millionaire lifestyle with a 9–5 work schedule, as I have stated on Twitter.

Check your priorities and make sure they line up with the things you do every day.

2. AVOID SHORTCUTS
There is no getting around putting in the hours if something seems too wonderful to be true.

There is no shortcut to being rich quick, and any that you may do will ultimately cost you far more in terms of time and money.

3. GIVE YOURSELF AT LEAST 5 YEARS
You won't turn into a successful trader in a matter of weeks or months. According to my own experience, it takes years for someone to develop the abilities required to trade profitably over the long run.

And when I say that, I don't just mean having the technical know-how to understand charts and perform technical analysis. How you handle losses, adapt to the always shifting market conditions, and work on your mindset are far more crucial.

4. REVIEW AND ANALYZE YOUR TRADES
Never have I encountered a successful trader who did not keep track of their trades.

Do you recall the last ten trades you made? The obvious response, if you're like me, is NO!

If you don't have a mechanism to keep track of every mistake you make, how can you expect to learn from them? To determine what trades are successful and unsuccessful, you must monitor and analyse them.

You must keep a trading journal if you take trading seriously.

5. DON’T RISK MORE THAN 3%
Losing runs will occur. Plan properly as a result.

When your position size is excessively aggressive, your account will suffer if you suffer 4 consecutive losses.

Before you sit down in front of your trading platform, be sure you have established explicit position sizing guidelines.
DRAWDOWN RECOVERY RATE
5% 5.2%
10% 11.1%
20% 25%
30% 43%
50% 100%
70% 233%
80% 400%

6. NO SYSTEM-HOPPING
One of the worst sins a trader can commit is system-hopping.

There isn't a trading strategy out there that will perpetually start printing you money.

Instead, have the ability to deal with the flaws in your existing trading strategy. Understand how to reduce your losses and let winners run. Learn how to deal with losses because even the best traders have loses occasionally in the world of trading.

7. HAVE A TRADE CHECKLIST

Since reading Marty Schwartz's book on the markets, I have maintained a trading checklist.

Use checklists to make your trading process more objective and to cut down on errors.

You run through your checklist, which contains a list of all your trading rules, before you press the buy or sell button to make sure you haven't forgotten anything.

Trade Checklist
#1 The setup meets all my entry criteria
#2 The trade is in my trading plan
#3 The trade is in the direction of the trend
#4 No news announcements ahead
#5 The risk/reward is acceptable
#6 I feel good emotionally and physically
#7 1 accept to lose

8. PLAN ALL TRADES IN ADVANCE}
You must schedule your trades in advance before you can even think about employing a checklist.

I go through all of my currency pairings every morning to look for any potential trading chances for the day. I create if-then scenarios for trading ideas, update my technical analysis, and set up price alerts. Then I just relax and wait to see if the price moves in the direction I need it to in order to execute my trading strategy.

9. TAKE FULL RESPONSIBILITY

YOU are accountable for anything that transpires in your trading. If something doesn't go as you expected, don't put the blame on your broker, insider trading, the media, or your wife. The only person at fault is YOU.

When you realise that trading is under YOUR control and that YOU have the capacity to change it, you will feel empowered. Blaming external factors will result in the loss of such power.

10. KEEP TRADING FUN
Your emotional capital is more crucial than your financial capital, and most traders would give up completely if they run out of mental capital.

There will be frustration if you keep making the same mistakes, don't see any results, and lose money for years.

As a result, follow all the advice given in this article and allow it lead you on your trading adventure.


This piece is not intended to be financial advice. Before making an investing choice, always do your own research and speak with a qualified advisor.
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6 giu 2023

Nota

Today, I want to provide with you an essay that will clarify just how far you should push your trading perfectionism.

There is no ideal trading technique, to put it succinctly and painfully. Losses will be a part of life. Yes, there are High Frequency Trading (HFT) outfits that have been producing successful days after successful days for the past five years, but let me let you in on a little secret: you are not an HFT outfit. Additionally, these HFTs lose money; it's only that because they execute a million trades every day, their advantages soon disappear.

Therefore, give up hoping and begin understanding that you will lose. The ideal trading strategy is one that generates profits over the long term; a strategy that generates profits on each trade would be utopian. Additionally, you won't begin making money until you acknowledge that you will also lose money. I know it's an old story, but this is one of the factors to consider if you aren't yet profitable. You still believe you are superior to the market, and you are still searching for a trading method that guarantees a 100% win rate, deep inside your reptile brain.

Curve Fitting Is Asking For Disaster
If you still want to develop your trading strategy after it has proven to be profitable, you must proceed with extreme caution. Your winrate and reward:risk ratio will change whenever you alter a parameter in a trading system because it is such a delicate construction. Your variance, average drawdowns, average updraws, and so forth will all increase.


A trading system should only undergo subtle, gradual changes based on reliable data. If you keep trying to improve, curve fitting is what you'll finally do. As a result, there will be no room for any future changes in market behaviour because your approach will be too firmly tied to the past. However, markets are alive and continuously changing, as we all know.

Every backtest faces the very real challenge of costing a lot of money by designing a system that is too tightly based on historical data. In addition, if you have three years of data, create your system on the first two years then test it on the third year without making any alterations, regardless of the third year's results. This is why you should always utilise an outsample while backtesting.

You must eventually decide where you stand as a trader and prepare to lose.


You may already be using a winning trading strategy, but are unaware of it since you constantly try to make adjustments to your system in an effort to minimise losses. This will, however, need a change to your current setup and expose it to new risks of loss.

You will eventually just have to accept that your trading system will occasionally make bad trades because that is how trading works. Nobody would ever think consider trying to win every hand they play in poker; it is a stupid and insane idea.

Most traders ruin good systems by striving to turn them into perfect systems.

Accept this as who you are and your trading strategy, with all of its advantages and disadvantages. Accept that losses are a part of it and learn to love it. What more could you ask for when you know that you have a good outlook on life and that the system generates income for you? You already outperform around 95% of everyone who has ever entered this industry.

You must aim for excellence rather than perfection.

If you cannot fulfill your dream of creating the “Magic Strike Rate Trading System”, what is left? Excellence! It is your job to make sure to follow your system 100%. Not even the slightest deviation is allowed. Make sure you are always trading at the peak of your performance. Strive for excellence and make every trade count!

Every trade that you take outside of your trading system is an insult to yourself, to the time and effort you put into trading, and to your self-respect.

Excellence really comes down to respecting yourself in the end. Once you come to respect yourself and trust your abilities and your system, it will become easier and easier for you to follow your system.

If you go on a losing streak, find out if you completed each trade well, and if so, whether the market conditions changed or something else occurred. When you are on a losing streak, it is crucial to keep going and stick to your plan while also comprehending why you are losing. It's good if there is nothing to be done. This is how a process-oriented approach should be adopted by every professional trader.

You can weather the storm if you take pride in your losing streak, preserve your money, and trade expertly every time.

Instead of endlessly optimising one setup, focus on mastering another setup or the market.

It's really quite simple: If you follow your method perfectly for a time (let's say 50 transactions) and you are still losing money, you can say with a high degree of certainty that the system is the issue. You can then make adjustments, but if you don't use your system in the first place, you won't ever know if it works or not. Demo accounts and backtests are used for just that.

And believe me, the more focus you place on strictly adhering to your system, the quicker it will become a winning system that complements your lifestyle and personality, which is crucial.

But wow, if all of a sudden you are outperforming a sample of 50 trades. This might be it. You might have a successful strategy. Why make a change now? You are getting paid. Trade the system till you can follow it without thinking every day while doing flawlessly. Go for it if your trading log indicates that there is a LOT of potential in a particular location. Naturally, test the modified system first on a demo. If you are successful, though, and you can't locate any significant leaks, leave it alone. Don't curve fit once more.

It's fantastic if you get bored! Monotony is a sign of successful trade. Congratulations, you have mastered your setup. You can now create a different configuration using the same technique to smooth your equity curve and diversify your revenue sources.

Your equity curve will appear virtually perfect over time if you master 2-3 setups to locate trades in all market conditions, but there will still be a lot of losers among your winners, of course. Your strike rate, average risk-to-reward ratio, and risk tolerance are all important factors.

Be disciplined
Be flexible
Never stop learning

I would also love to know your charts and views in the comment section.

Thank you

6 giu 2023

Nota

Hello traders, today we will talk about WHY TRADERS LOSE MONEY

BIAS
WHAT IT MEANS…
HOW IT INFLUENCES TRADERS
Availability People estimate the likelihood of an event based on how easily it can be recalled. Traders put too much emphasis on their most recent trades and let recent results interfere with their trading decisions.

After a loss, traders often get scared or try to get back to break even. Both mental states lead to bad trading quickly.

After a win, many traders get over-confident and trade loosely.

You must be aware of how you react to recent results and trade with a high level of awareness.

Dilution effect Irrelevant data weakens other more relevant data. Using too many tools and trading concepts to analyze price could weaken the importance of the core decision drivers.


I wrote about redundant signals and how to combine the right tools here: click here

Gambler’s fallacy People believe that probabilities have to even each other out in the short term. Traders misinterpret randomness and believe that after three losing trades, a winning trade is more likely. The probabilities don’t change based on past results.


Even after 10 losses in a row, the next trade does not have a higher chance of being a winner.

Anchoring Overestimating the importance of the first available piece of information. Upon entering a trade, people set their whole chart and analysis in reference to their entry price and don’t see the whole picture objectively anymore.


You must always have a plan BEFORE you enter a trade.

Insensitivity to sample size Underestimating the variance for large and small sample sizes. Traders too often make assumptions about the accuracy of their system based on just a few trades, or even change parameters after only a few losers.


A decent sample size is 30 – 50 trades. Do not alter anything about your approach before you have reached this number. And make sure that you follow the same rules to get an accurate picture of your trading within the sample size.

Contagion heuristic Avoiding contact with objects people see as “contaminated” by previous contact. Traders avoid markets/instruments after having a large loss in that instrument, even when the loss was the fault of the trader.
Hindsight We see things that have already occurred as more probable than they were before they took place. Looking back on your trades and fishing for explanations why the trade has failed, even though those signals weren’t obvious at the time.


Do not change your indicator or setting after a loss to come up with explanations or excuses. Accept that losses are normal and always follow your plan.

Hot-hand fallacy After a successful outcome on a random event, another success is more likely. Traders believe that once they are in a winning streak, things become easier and they can “feel” what the market is going to do next.


I wrote about the hot-dand-fallacy in trading before: click here

Peak–end rule People judge an event based on how they felt at the peak of the event. Traders look at a losing trade and only see how much they were in profit at the maximum, but don’t look at what went wrong afterwards.


Do not change your reference point when in a trade and have a plan for your trade management and when to exit before entering a trade.

Simulation heuristic People feel more regret if they miss an event only by a little. Price that missed your target only by a little bit, or a trade where you got stopped out just by a few points can be more painful than other trades.


The outcome is out of your control and you cannot influence the price movements. The only thing you can do is manage your trade within your rules.

Social proof If unsure what to do, people look for what other people did. Traders too often ask for advice from other traders when they are not sure what to do – even when other traders have a completely different trading strategy.


You must take responsibility for your actions and results. And not rely on someone else.

Framing People make decisions based on how it is presented; a gain is more valuable than a loss and a sure gain is more valuable than a probabilistic greater gain. Traders close profitable trades too early because they value current profits more than a potentially larger profit in the future.


Cutting winners too soon is a huge problem. If this is an issue for you, reducing screen time can be helpful. Do not watch your trades tick by tick.

Sunk cost We will invest in something just because we have already invested in it. before Adding to losing trades because you are already invested, even though no objective reason to add exists.


You must define your stop loss in advance and then execute it without hesitation when it has been reached.

Confirmation Only looking for information that confirms your beliefs, ideas and actions. Blanking out reasons and signals that don’t support your trade and just looking for confirmation.


Especially when traders are in a loss, they only look for supportive information. Stay objective!

Overconfidence People have a higher confidence than what their level of skill actually suggests. Traders misjudge their level of expertise and skill. Consistently losing traders don’t see that it’s their fault.


Analyze your results objectively and get a trading journal to add even more accountability.

Selective perception Forgetting those things that caused discomfort. Traders forget easily that their own mistakes and wrong trading decisions caused the majority of their losses.


Do not blame the marjets, unfair circumnstances, your broker or any other outside event. You are the one who is responsible for making it work. It’s totally up to you and blaming others won’t help you make progress.




Which bias is the one that is causing you the greatest troubles? What are you workin on right now? Let me know in the comments below and I will answer with tips and ideas on how to overcome your struggles.

This chart is just for information
Never stop learning
I would also love to know your charts and views in the comment section.

Thank you

7 giu 2023

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7 giu 2023

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8 giu 2023

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9 giu 2023

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