Today's topic is Don't Use Your Brain
Why you’re thinking is costing you money.
So before I move on to the topic at hand today,
I wanna first dispel some of the trading myths, right.
People say buy low, sell high.
Sounds good, buy low, sell high.
But if everybody knew how to buy low and sell high,
wouldn’t everybody make money?
Wouldn’t everybody be rich?
Right, buy low, sell high.
Sounds great, but how?
- How do you know when to buy low?
- How do you know when to sell high?
- What is high?
- What is low?
Right, we don’t know.
So that, please throw it out of the window.
Then people say, you know, go break even,
as quickly as possible, and don’t never
let your winner turn into loser.
And I’m gonna show you how that exact saying
is what’s costing you money.
Costing you being a profitable trader.
Most of you guys are already good at technicals.
You know the charts, you can easily identify a pullback,
you can identify a break out.
So you’re good with charts.
How you manage your trade,
your thinking is costing you money.
And I’m gonna illustrate that today
with some examples, all right.
Then people also say you can’t go broke taking profits,
you know, that is exactly how you go broke, right.
If you might not go broke taking profits, but guess what,
you’re never gonna get rich.
You’re going to be a break-even trader,
cause if you keep taking small profits,
but one loser can wipe away your winners,
then that’s not going to work out, is it?
So again, please, this is a sure fire way
to remain a break even trader.
I know a lot of you guys again.
I get your emails.
I hear your pain in your voice, and your emails.
Through the emails I can sense your pain
when you say, you know,
I’ve been training for XYZ time, and you know, guess what,
I’m actually right on my trades.
My stocks end up doing exactly what I expect them to do,
but somehow I didn’t make any money on it.
I know, right, I’ve spoken to numerous trading firms.
So please, unlearn this as soon as possible, okay.
So you know after 10 years of training,
and, you know, 5 years of coaching and training others,
the biggest issues I saw working with individual traders,
and being asked to speak at proprietary trading firms,
and other trading firms that I’ve gone to,
and given speeches and talks at.
One of the biggest reasons that I saw
that people who were not making money,
here’s some of the four points right.
Number one, they didn’t have a set rule
or fixed the way of managing their trade, meaning,
when they get into a trade,
they don’t know when they’re going to get out,
or how they’re going to get out.
They’re making it up as they go.
They’re making the rules up as they go.
Oh, this looks like it’s extended, let me take a profit.
Oh shit, it went up.
It would have hit my target.
Or oh, this looks like it didn’t get enough volume,
this is not a good break out, this is not a good break,
let me get out some shares here.
Let me go break even, and guess what?
It ends up going to the target anyway.
So they manage it differently and every time.
Sometimes in holding a trade,
they think it’s going to go higher.
Sometimes they’re getting out too quickly.
So they’re doing random things,
and expecting the results to be consistent.
But guess what?
If you’re going to do random things,
your results are also going to be random.
So you know, they did too much thinking
while they were in the trade, meaning,
they’re not doing enough thinking before they take the trade
but then when they take the trade,
they’re always constantly watching that stock.
They just can’t let it go.
They’re looking at that screen, staring at the screen,
trying to make something happen, right.
And often by their thinking, right,
by listening to that idiot inside your ears,
between your ears, they actually messing up that trade,
which was a perfectly fine trade to begin with.
- Their thinking messes that trade up.
So, and that reason that happens is because
they did not have enough faith in their trading plan,
or their management strategy.
And often that is because of lack of back testing
and lack of testing, and tracking your trades, right.
And, you know, a lot of traders that I meet
they’re actually deep down, a winning trader,
but they’re psychology, their mindset, right.
Them listening to this typical trading cliches
results them in losing money.
So please unlearn this as soon as possible, right.
I’m gonna tell you, the number one reason
people lose money is
- A either they don’t have a trading plan
- B they have a trading plan, but they don’t follow it.
- C they’re doing different things, on different trades.
And again, you guys don’t need to let me know.
You guys ask yourself that question.
Comment below and let me know.
Do you manage a trade differently?
- So some days you’re taking it off at 1:1,
- Some days you’re raising your stop to break even.
- Next day you’re managing based on a pivot.
- Next day you’re saying, well if it keeps riding this moving average I’ll hold it.
- Next you’re like this one’s going to go much higher, I’m gonna hold this trade.
So every trade is different.
So again, if you do different things,
how can you expect a, you know, consistent trading plane.
You can’t, right.
Trading is a game of statistical probability.
That is it.
No debates about it, right.
Statistical probability, but if you don’t
have any statistics, or you don’t listen to statistics,
or you don’t follow a strategy
to let the statistics play out,
it’s never going to work, right.
Definition of insanity is what?
Doing the same thing over and over
expecting a different results.
So please stop.
Stop doing and stop messing about with your trade.
Stop thinking, okay.
So unlearn these things as soon as possible….