Reblog: The 6 Stages Of A Trader’s Development Part 2


This is the second part of the article. The first part can be accessed here.

Stage Four: The Determined Trader

  1. This is the stage in which you learn to specialize in certain markets and trading methods.
  2. Without realizing it, you have finally found your style of trading after hours of hard work and research. You stick to your method and you improve it
  3. You realize that you need an edge whether its tape reading or being a Fibonacci expert. The important thing is you are slowly transforming yourself into a specialized trader
  4. You test your methods and they seem to work. You gain tremendous market knowledge.
  5. You reflect back on yourself and you can’t help but laugh at your foolishness.
  6. Although you have not made enough money to call yourself successful you are proud of your journey and accomplishments
  7. You realize that the Holy Grail is not about technical indicators or price patterns
  8. You calculate risk before profits and place strict money management on all your trades.
  9. You cut losses short and learn to scale out on your winners.
  10. You start accept losing as a natural part of the game
  11. You take high probability trades that you have tested and feel confident about your setups because you understand that trading is a game of probabilities
  12. Your psychological makeup has changed from an amateur mindset to a professional one.

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Reblog: The 6 Stages Of A Trader’s Development Part 1


Stage One: The Clueless Trader

Image result for clueless trader

  1. Heard of a day trader making millions, or buying options is safe and can make you rich quickly
  2. Beginner Luck in first few trades.
  3. You will buy just to see the market reverse and you will short just as the market starts to rally. Someone is tracking my trades and making me lose money.
  4. Most of your trades are done emotionally. You buy just because the markets feel strong without any logical reason
  5. You have no clue how the mechanics and psychology of trading works. What’s worse? You are not aware that you don’t know.
  6. Most traders will blow their entire account multiple at this stage.
  7. Mostly you start your trading in fag end of bull market
  8. You will spend more time finding a broker charging least brokerage.Tracking World Markets, Bitcoins instead of making a trading plan for next day.
  9. A big majority of people will leave trading and blame the randomness of markets, or say markets are always manipulated
  10. You don’t know what is short selling or have never tried it, no idea of stop loss as well
  11. You are in the unconscious incompetence stage, at this stage, your capital is at maximum risk

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Reblog: The Secret Ingredient If You Want To Become A Full Time Trader – What Nobody Talks About


Looking back, I now realize that what allowed me to finally establish consistency into my trading was not a better trading strategy or a different method, but something I never expected when I started out as a trader.

In today’s society where the average attention span has dropped to 8 seconds, where 140 character tweets seem too long (#TLDR) and people skip YouTube videos after just a few seconds, we easily lose the connection to ourselves…

The concept of “self-awareness” has a woo woo ring to it and most traders will not listen to you if you start a trading conversation by referring to self-awareness. However, if you really want to make this work and if you want to finally realize your goal of becoming a pro trader, you have to listen and I am 100% certain that you will be able to relate to my story as well.

What is self-awareness? Forget the spiritual mumbo-jumbo

Unfortunately, most people, and especially traders who are often numbers driven and very rational, associate the term self-awareness with something spiritual and connect the wrong assumptions with it. This is very unfortunate because I have never met a successful trader who is not also very self-aware. You’ll see soon that self-awareness is something very different from what you believe it is.

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Reblog: 7 Habits of Highly Successful Traders


There are seven things that I believe are pretty common in the successful traders I have known, read about, and seen in action. Whether it is stock trader Nicolas Darvas in the sixties, commodity trader Ed Seykota in the twentieth century, or Jesse Livermore at the turn of the last century, many of their principles hold true to this day. The closer I get to these principles, the better I trade. The farther I stray from them, the worse I do. In trading, discipline pays. Adopt these seven habits of highly successful traders.

  1. Traders must have the perseverance to stick to trading until they are successful. Many of the best traders are the ones that had the strength to push through the pain, learn from their mistakes, and keep at it until they made it.
  2. Great traders cut losing trades short. The ability to accept that you are wrong and put your ego aside is the key to personal and professional success.
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Reblog: Ten Signs You Are Probably A Terrible Trader


Over 90% over traders will end up losing money in the stock market. Chances are if you are reading this you are probably loser in the Market. In order to encourage you to quit before you lose all your money, I created a list below to make you realize you are terrible at trading and should probably find another dream to pursue.

  1. You follow “professional” traders on twitter. The truth is many on twitter are complete phonies and have built a fake trading persona to end up selling you something in the end. More on this can be found on my guide on how to identify fraud traders.
  2. You look at inspirational quotes or quotes given by “famous” traders as part of your trading regimen. This is non-sense, this won’t help you.
  3. You assume psychology is a major part of trading, much more than an actual system. As such, you constantly remind yourself that you lost money in your last trade because of psychological mistakes and thus you refer to #2 on the list to regain focus (stupid trading quotes). If psychology was such a big part the simple solution would be to write programs that would trade for you (this isn’t a money maker). The truth is, many “professional” traders instill that psychology is big so that they can sell you their products for improving your “weak” psychology. Just to be clear I am sure most of you lack discipline, but even with discipline you still would lose money.
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Reblog: Strategic Investing, How to Setup a Profit vs Loss Ratio


A profit vs loss ratio is something that can by itself help you succeed investing in the stock market. They work wonders for new traders and are used by professionals as well.

This article will explain what a profit vs loss ratio is, how to set one up, and how to stay disciplined to utilize it effectively.

What They Are

A profit vs loss ratio is a plan that you put in place to limit your downside exposure on all your trades to x% while setting a target on your upside to x% return per trade. Depending on how you setup your ratio, you can be wrong more than you are right and still make money in your portfolio.

The whole point of your profit vs loss ratio is to be able to say, “hey, even if I am wrong x times in a row and then am right once, I still am making money”.

How to Setup Your Ratio

There are 2 factors to any ratio: maximum loss % per trade, and your target profit % per trade. Once you know these you know your ratio.

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Reblog: 12 Dumb Things New Traders Do


There are some common mistakes that the majority of traders make as they dive into trading before they have really studied what does and does not work. All new traders will find many of these things familiar. Some of us had to fight our natural impulses hard to overcome these bad habits.

A Dozen Dumb Things that New Traders Do

  1. Being a stubborn bear in a bull market. Continuing to sell short inside a strong uptrend not only causes the loss of money as a market makes higher highs but you miss out on the easy profits made buy simply holding positions or buying the dips.
  2. Being a stubborn bull in a bear market. Some markets are under distribution and keep making lower lows. If a market is not in an established uptrend or trading range then it can go lower if support does not hold. A stop loss gets you out of a downtrend.
  3. Risking your entire trading account on one trade. You should never risk your whole trading account and trading career on one trade. Safety comes in trading a small size so every trade is just one of the next one hundred trades not your whole future on the line. This is a poor choice financially and emotionally. It is also a sign of arrogance believing you can predict a non-existent future.
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Reblog: Stop Loss – Advantages and Disadvantages


Stop loss is one of the three fundamental parts in trading ( the other two are take profit and entry). The subject of Stop Loss (SL) is very important and interesting to discuss thus this article! I would like to go over some of the advantages and disadvantages of using a stop loss as opposed to trading without one. I would love to hear your opinion on the subject below in the comment section – thank you!

So let’s begin:

First of all: An advantage for one trader could be a disadvantage for another one! Remember that, it is all strictly individual and you must find your way and what it works for you. There is no reason why two traders, one who uses SL and one who doesn’t, won’t make money at the same time.

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Reblog: Why I Ditched Technical Indicators (And Why You Should Too)


While the article talks about Forex, the underlying concept applies to stocks as well.

technical-indicators

Technical indicators are no doubt a favorite topic in the financial markets. They can range from a simple moving average to a complex array of algorithms.

It doesn’t matter whether you’re trading stocks, commodities, futures or any other market; technical indicators are a common theme.

Useful? Well, that’s another matter entirely.

But of all the financial markets, Forex is arguably the worst offender of overutilizing indicators. Proprietary languages like MetaTrader’s MQL have made it relatively easy for newcomers to design anything imaginable.

Other trading platforms offer similar languages. There are even businesses that do nothing but custom code indicators for clients.

And if you ask me, it’s closer to being part of the problem than the solution.

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Reblog: How To Use The Reward Risk Ratio Like A Professional


The reward to risk ratio (RRR, or reward:risk ratio) is maybe the most important metric in trading and a trader who understands the RRR can improve his chances of becoming profitable.

A trader who uses the RRR incorrectly will never become profitable on the other hand. In this article, I will show you what you need to know about the RRR.

Busting myths around the reward:risk ratio

Let’s first tackle some of the common misconceptions about the RRR to help you understand what most people get wrong before then diving into the specifics of the RRR.

Myth 1: The reward:risk ratio is useless

You often read that traders say the reward-risk ratio is useless which couldn’t be further from the truth. When you use the RRR in combination with other trading metrics (such as winrate), it quickly becomes one of the most powerful trading tools.

Without knowing the reward:risk ratio of a single trade, it is literally impossible to trade profitably and you’ll soon learn why.

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