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Trader's Thread 05 (Jan 20 - Dec 26)
by winston » Mon Jan 13, 2020 4:21 pm
Perhaps the best way to get started as a minimalist “coffee shop trader”, is to focus on the higher time frames, and more specifically the daily chart time frames.
Focusing on the higher time frames works to smooth out the price action of the market for you,
by winston » Mon Jan 13, 2020 8:01 pm
The role that having tons of “crap” on your charts plays as a contributor to your trading problems, is often overlooked.
I mentioned above that trader error is the main cause of losing money in the markets, not the particular trading method you use.
The next time you want to put an indicator on your chart ask “Do I really need this? Is this really going to help me?”. “DO I REALLY NEED THIS?”….We want to only trade with what we need …..
After you learn to trade with price action, understand that you don’t have to spend a lot of time analyzing the markets each day.
by winston » Mon Jan 13, 2020 8:15 pm
By trading less… our aim is to make a nice large “meaty” size trade that sustains us until our next trade. Sure we may have a few losses along the way to our big prize, but the goal here remains clear; waiting on the sidelines (or the shores of the river like the crocodile) to pounce on our prey and cop a huge nourishing meal.
I may trade only 3 times per week or even less some weeks.
My own personal experience is that it’s much more lucrative to wait patiently for high-quality trade setups than it is to stay glued to your charts all day and night trying to trade everything you can find.
Crocs tend to have less “losing trades” or failed hunting attempts…because they don’t waste time or energy…they wait and wait and control themselves with precision until their prey almost walks into their mouth…then they feed.
Crocs “…learn quickly and adapt to changes in their situation. They particularly learn to avoid dangerous situations very quickly”.
by winston » Tue Jan 14, 2020 8:24 am
Money management can be one of the most difficult aspects of trading for most traders. Thus, having a “prop” to fill in for your real money, like poker chips or Monopoly money, will add an element of reality to your trading that otherwise won’t be there.
by winston » Tue Jan 14, 2020 9:41 am
As a trader, you NEED to understand how the higher time frame charts work and higher time frame price dynamics before you attempt trading the lower time frames.
A retail day-trader in today’s markets has a much tougher time trying to turn a profit than they did even about 10 years ago before all this high-frequency computer trading was so prevalent.
These high-frequency traders have what is essentially an “unfair” edge because they see the data that we see but a lot sooner.
by winston » Wed Jan 15, 2020 10:24 am
Despite what most people think, good trades often take a longer time to play out than they think or than they would like, often days or weeks.
The market is a slow, cumbersome beast. Today’s lesson is designed to prove this to you and to reinforce the need to hold trades for longer than you might be accustomed to or want to. Let the market do its ‘thing’ and give it room and time to move to your profit target.
You have to trade ‘loose’. Meaning, don’t get too attached or over-involved with the market.
Set your trades up and walk away until the next day and remember that you need to give the market both SPACE AND TIME to move so that it can move in your favour and make you some serious money.
After all, isn’t making serious money the reason why you’re trading in the first place? Well, this is how it’s done; holding trades, having patience and having the ballz to not get shaken out at every little fluctuation against your positions.
by winston » Wed Jan 15, 2020 11:35 am
The main idea of this trick is that when you see a price action trade signal or a trend, you don’t just jump in right away at market price, instead you do what most of the other traders are not doing, you wait for a pullback, retrace or a rest in the market.
This trading trick of waiting for an optimal entry on a trade might mean that you miss a trade sometimes but this should not worry you because that is what sniper trading is all about;
We are waiting patiently for the ‘easy’ targets to simply ‘walk into our sights’, rather than shooting at everything that moves.
by winston » Wed Jan 15, 2020 12:45 pm
Having a big or small account SHOULD NOT change the method and process of your trading.
When they trade, they trade big, they go in with a specific view and opinion on a trade, enter it and then go about their business. What these baller traders are NOT doing is sitting in front of their screens biting their nails over every little tick for or against them.
Having this relaxed / no-stress approach to their trades actually makes them even more money in the end! Reason being, it eliminates temptation to do stupid things like close a trade out prematurely for no logical reason or over-trade.
The money does not make the trader…rather it’s the trader that makes the money!
You are struggling in the markets right now primarily because you are trying too hard and getting ahead of yourself. You are trading too often because you have an intense desire to make money, and you are risking too much.
by winston » Wed Jan 15, 2020 8:32 pm
1. Focus on one single trading strategy or chart pattern until you completely master it.
2. Reduce the time you spend trading, and increase the time you learn about trading.
3. Fix your personal confirmation bias about trades and the market in general.
- 95% of traders will still develop a bias because of these ‘confirming factors’ that unfold.
4. Be aware of and avoid Recency Bias.
5. Write out your big goals as affirmations and read them once every few days to yourself out loud.
6. Slow it all down.
7. Don’t miss trades.
8. Exit trades if they are near your target.
9. Risk the same amount per trade.
10. Avoid trading markets you shouldn’t be.
11. Take stock of what you did right and what you did wrong.
12. Devise a plan to improve.
by winston » Fri Jan 17, 2020 10:47 am
1. Drawing risk / reward levels
2. Trailing stops
Ideally, we want to look for trade setups with a risk / reward of at least 1 to 2, by getting a risk / reward of 1 to 2 on every trade setup, we can lose on well over 50% of our trades and STILL make money.
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