It’s Not That You’re Not Profitable

TVC:SPX   S&P 500 Index
I've made this serious mistake when I started out trading.

I skipped from strategy to strategy, methodology to methodology.

I've tried almost everything. Signals, account management, mentorships, PAMM, expert advisors, bots and paid indicators.

Everything seems to be profitable, until I put my hands onto it. Many times, I found some profitability. After depositing a bit more capital, I encountered large losses.


95% of the traders will not be profitable. Will I be in this statistic? I don't think so. I'm pretty sure I'm better than others!

Realization Of The Issue
The big issue I was facing at the beginning was searching for the holy grail. I don't have a plan. I switched from A to B within a few months of losing money. I was so fixated on getting rich quick through trading. Everything on the marketing material targeted at my desires. Survival, enjoying life, comfort and the perceived status of being rich and successful.

I was invested in the topic of personal development and personal finance at that time. While I was doing my goal settings, I realized that I have been losing close to 5 figures over a course of 2 years. This is bad for me because of 2 key problems.

I wasn't growing my net worth.

I was losing net worth.

At the rate I'm going, I will be working till I'm 65 before I can retire.

I gave myself another chance to do things properly. I read a lot of trading books, joined mentorships and watched a lot of YouTube videos.

I decided to give myself one last chance and one more year.

I started to see changes.

Human Are Emotional
We are all emotional. You are greedy. You fear drawdowns. Did you look at the posts people are posting on social media? Consistent high RR trades that yield them thousands of dollars a day. You aspire to be like them. You want that kind of strategy. You want to learn from them. But have you think about this. If they can produce such consistent high return results, why would they want to teach you how to trade? They can simply trade for big institutional players who will pay them large amount of money. They don't need to pitch to you to buy their courses and mentorship for a mere $99. This doesn't add up.

Trading Plan
If you fail to plan, you plan to fail.

The more I think about this, the more I got attracted to this quote. This is true in life, and even more relatable to traders. If you have a trading plan that gives you 3 RR per trade, stick to it. I know that it feels good to hit a homerun trade. Your trading plan says 3 RR per trade, but you dragged your TP to 10 RR. When the trade ends up in a loss, you scold the market. You could have taken the full profit at 3 RR if you followed your rules.

You deviate from your trading plan. You don't trade based on your backtesting results. You then say that your trading strategy doesn't work. Sounds logical?

Without a plan, you're just going in circles like what I did at the beginning. Circling from strategy to strategy, and methodology to methodology.

Without a plan, you're going to encounter losses after losses. You won't be getting your 6 figure income. You won't get to enjoy life. You won't get to live comfortably. You won't get to be seen as a successful person. What you will get to do is to work for a 9 - 5 until you're 65.

Achieve Consistency
You have to follow your trading plan. But before you even have your trading plan, you have to backtest. You have to have a least 100 trades to say that your trade can give you a certain result. The below tells you what's the win rate needed to be at least break even. If your strategy has a RRR of 1:3, aim for at least 30% win rate. Anything above 30% is a very profitable strategy.

When you follow your plan step by step, you take all the same trades. You leave no room for emotions and irrational behaviors. You wait for the same confirmation and set up every single time.

You don't need to care what other people say. You don't have to care about what people's analysis are. You do you own analysis. Different people view the market differently. You can be trading on the lower timeframe, but they are trading on the higher timeframe. We see different things.

Remember that anything can happen in the market. It take just one big institutional player to take you out, or to swing your trade to your target.

Increasing your profitability comes from 2 angles.

1. Increasing your win rate
2. Don't take bad trades

It seems counter-intuitive to say that you can achieve more by doing less. With a trading plan and a trading journal, you are able to see the pattern over large number of trades. Analyze them and see why do some trades go wrong. Are there similar conditions that happened to your losing trades?

You must be thinking. "But I don't want a strategy that gives me 2 RR. That's not enough. I need higher RR strategy.".

Assuming you're risking 1% a trade, with an above breakeven win rate, you will profit 2% for a winning trade. If you're trading a $200,000 account, that is a $4,000 profit. Is that not enough? Not many people earns this much money in a month.

This is what I'm aiming to achieve. If I can scale my accounts even more, I need even lesser profits a month to achieve a $4,000 target per month.

Holy Grail
I gave myself one last chance to trading. You can call it luck, I call it perseverance. It was a really good mentorship. I learnt a lot from someone who has been there done that and is trading for a living.

I had my profitable trading strategy, but it requires me to trade on the 1 minute timeframe. It’s profitable but I haven't got my consistency in the live market. It was a low win rate and higher RR strategy. I traded live account straight away. Attempted prop firm, got a 200k funded account and blew it before I got my first payout. I discarded it.

My mentor was scalping on the seconds chart. Thinking that sitting down in front of the chart for 1 to 2 hours, I can finish my trading day. I found consistency, but I was lazy and got distracted easily. I soon discarded it after trading live for awhile. (What was I thinking. Where did my motivation went to?)

Another member shared a strategy with decent win rate and high RR. I spent a lot of time backtesting, live trading and saw some results. However, my psychology wasn't good enough to handle the drawdown. it’s not a good strategy for prop firm challenges too. So I gave up AGAIN.

Went back and gave myself another try. I used my original trading strategy. I tweaked it such that I will be trading on the higher timeframe to accommodate my lifestyle. I backtest a lot of course. Finally traded live, and found consistency. This led to my first payout with decent looking equity curve.

I took a long route to come back to where I’ve started. I've finally found my holy grail.

This is the framework of how I trade.

1. Markup your chart. Find the area of liquidity, point of interests, liquidity grab, direction of the market and demand and supply zones. Do your multi-timeframe analysis here. Higher probability trade is to buy at discount levels, and sell at premium levels.

2. Set alert at your point of interests (Where to buy and sell)

3. Write down your analysis on the chart. If the price hits your point of interest, I would expect X to happen. When X happens, I will do Y.

4. When the alert goes off, go back to your chart and see if your analysis in step 3 still holds.

5a. If yes, mark out roughly where your stop loss and profit target will be. See if the RR is decent enough. If yes, then wait for the price to give you a confirmation. If no, either wait for a refined entry on the lower timeframe, or to wait for another confirmation.

5b. If not, repeat step 1.

6. Wait for price to give you a confirmation. Calculate the lot size you need to open based on your risk management and place your order.

7. Once you're in the trade, you can either forget about your trade and let it hit TP or SL, or actively manage your position. This will depend on how you backtested your strategy.

8. Once your trade hits the TP or SL, journal it. Record your entry, take profit and stop loss. Take screenshots. Record your emotions and feelings before, during and after the trade.

This is how a trading plan should look like. A clear plan of action and train of thought. There should be actions taken before, during and after the trade.

Do not follow strictly if your trading strategy is different from me. You need to change it to fit your strategy and lifestyle.

Having someone who has been there done that before is important. A mentor can provide valuable advice that can define and reach your goals faster. A mentor will provide feedback and support you. A mentor will remove all the unnecessary information that you don't need.

A mentor must be able to look at any strategy and tell you what's not working and what you should stop. A mentor should not force you to use his strategy. He must be able share his mistakes. He must be able to show you solid trading results via 3rd party verification. 3rd party verification should be Myfxbook or Fxblue, not screenshots or excel worksheet. He should walk you through development as a person outside of trading.

Stay consistent. Stay safe. Success is just around the corner.

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Happy weekend!

Prop Firm Funded Trader
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