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6 Rules of Successful Trading Once you become a trader. Once you think about trading every day. Once you have set your mind, soul, and heart into trading. There is no going back. You’ve reached the point of no return! And it’s thrilling and exhilarating once you’ve mastered this element to your life. So you might as well harness the true nature of what it takes to be successful. Here are 6 key rules every successful trader lives by. Always have a trading plan One hallmark of a successful trader is an effective trading plan. This is a self-journey and only you can endure it through different endeavours. Your trading plan acts as a roadmap and your game-plan, to guide you to your daily trading activities to help you make informed decisions. This plan should detail your system, risk and reward management along with your financial goals, risk tolerance, criteria for entering and exiting trades, and strategies for managing your trades. Every trade you execute should align with the objectives outlined in your plan. Also, evolve and adapt to your plan along with the ever evolving market world. Don’t procrastinate In the world of trading, timing and persistence is everything. Successful traders understand the im portance of making swift, decisive moves when the right opportunities arise. Procrastination, on the other hand, can lead to missed opportunities laziness and potential losses. So, get up, make your coffee and get to it. Also, remember to always keep a close eye on market trends, economic indicators, and relevant news events. This proactive approach will ensure you’re well-prepared to act promptly when your defined trading criteria are met. Remember, the market won’t wait for you, so you must be ready to seize opportunities when they present themselves. Be patient While it’s essential to act decisively. It’s also our goal to just….. WAIT. Be patient and only strike when you see that golden opportunity present itself. Sometimes, the best action is inaction. Sometimes, you have to just wait it out and stay out. Neutral is also a position. And you need to know when it is best to protect and preserve your portfolio. Successful traders don’t let impatience force them into suboptimal trades that fall outside their strategic plan. Just take the trade I’m seriously going to have a mug or a t-shirt saying. Trade well and just take the trade. When your plan indicates it’s time to trade, you need to overcome your hesitations and execute the trade. Traders must realize that not every trade will result in profit. So you might as well take the trade that lines up when it’s a high probability one. Even the best traders face losses. Even the best trades take losing weeks, months and even quarters! What matters most is your overall performance across many trades. As I always say, it’s not about the 1 trade but the hundreds of trades later. So, when the conditions of your trading plan are met, take the trade, and maintain your risk management strategies to limit potential losses. Keep learning and evolving Financial markets are dynamic and ever-evolving. As a trader, it’s crucial to keep learning and adapting to these changes. Stay updated with market trends, new trading strategies, and changes in regulations. Consider continual education a part of your trading plan. See what other successful traders are doing. See what other strategies they’re adapting to. See what new markets are available and what sectors are outperforming. Learn to earn. This ongoing learning process will keep you on top of your trading game and help you adapt your strategies as markets evolve. Don’t give up No matter what you do, remember. You only lose when you quit. Trading is a long-term game filled with ups and downs. The key is to view these setbacks as learning experiences, not reasons to quit. When faced with losses, successful traders analyze their decisions, identify mistakes, and learn from them. They maintain a positive mindset and understand that perseverance is crucial. Stay focused on your trading plan, refine your strategies, and remain resilient on your path to trading success. By incorporating these six rules into your trading routine, you’ll be well on your way to a profitable and sustainable trading career. Always have a trading plan Don’t procrastinate Be patient Just take the trade Keep learning and evolving Don’t give up
TVC:SA40Education
by Timonrosso
Cut out Useless Trading Data - 6 Points There is a curse of knowledge in the world of trading. And it comes a time where a new trader believes the way they can WIN is through… Knowing and applying as much info and data as possible. I’ve been there. In 2008, you should have seen my charts. They looked like Christmas Trees. Cut out the conflicting indicators. Cut out ANYTHING that does not make logical sense. Less is more with trading. Let’s explore some factors that can help you cut out the unnecessary data. Find One or Two Systems Only Trading systems are a collection of rules and parameters that traders use to determine their entry and exit points. With myriad trading systems available, it’s really tempting to dabble in different ones. And as a beginner trader, I understand it’s crucial for you to find yourself and your trading personality. However, once you find what system works for you. Once you find the ones that match your trading style, risk tolerance, and financial goals – Stick to them. Adapt, evolve, improve and optimise your strategy. When you absolutely master your strategy and your focus, you can gain deep expertise in those systems and utilize them more effectively. Minimize the Number of Markets Each market is unique, with its own set of rules, trends, and volatility. If you diversify into too many markets, it can dilute your focus and make it harder to understand the nuances of each market. Instead, find the markets that most definitely work you’re your strategy. Whether it be stocks, indices, Forex, commodities or crypto. Break them up into watchlists and the ones that don’t work with the system, well don’t include them obviously! Choose Only One or Two Time Frames Just as with trading systems and markets, time frames also require careful consideration. Whether you prefer day trading, swing trading, or position trading, it should tell you the time frames you should be focusing on. Select one or two time frames that align with your trading style and stick with them. I like daily for stocks, commodities and crypto. I like 15 minutes for Intraday trading indices and daily for identifying the Daily Bias. By doing so, you’ll avoid the confusion and contradiction that often comes from analysing multiple time frames simultaneously. Cut Out Unnecessary Indicators The year was 2008. I had 5 Moving Averages, 1 Bollinger Band, 1 MACD, 1 RSI, 1 Stochastics, 1 William %R, Volume, and even the ATR (Average True Range). The problem was. These signals were conflicting each other. Do you have any idea how difficult it is to back and forward test a strategy like this? And yes, all the information is at our fingertips. But it can also be the doom of our portfolios. Why? I realised one thing. Indicators, volume, price action etc… Is all based on ONE constant. Historical data. The data and information you see is all based on the past. There are no predictions, no certainties only probabilities. So you need to cut out the unnecessary information. Don’t fall for “analysis paralysis,” where excessive data hampers your decision-making. Choose a few key indicators that provide the most valuable information for your trading strategy. Focus on One or Two Financial Instruments Diversification is a key principle in finance, but it’s possible to overdo it. When I say instruments I mean CFDs, Lots, Spread Betting, Options, Futures etc… You know what a schlepp it is to have different journals for different instruments, trading the same things? Ye… Choose 1 or maybe two instruments (if your one broker doesn’t offer some markets you wish to trade). But there is no benefit in trading a whole bunch of trading instruments at once. Also when you spread your capital too thinly across multiple financial instruments, you’ll find it can complicate your trading strategy, portfolio and risk management. And it will make it difficult to keep track of your investments. Only Have One or Two or Max Three Trading Accounts Managing multiple trading accounts can be a logistical nightmare. Similar to what I mentioned above. It can lead to unneeded complexity in tracking performance, managing tax liabilities, and maintaining a balanced portfolio. Instead, limit your trading accounts to 1, 2 or max 3. This is so you can monitor your trading performance across different markets. For example. Forex is a completely different ball game to stocks (in my opinion). And so, I like to have two different trading accounts for each. Final words. Let’s focus on less rather than more going forward. Cut out unnecessary and useless data when you trade. And remember these point which is what we have covered today… Find One or Two Systems Only Minimize the Number of Markets Choose Only One or Two Time Frames Cut Out Unnecessary Indicators Focus on One or Two Financial Instruments Only Have One or Two or Max Three Trading Accounts
TVC:SA40Education
by Timonrosso
Important Trading Terms YOU need to KnowSorry but the truth is… You can’t get away from the trading lingo. There are at least 7 terms you need to deal with a day. But fortunately, they repeat and before you know it – they’re second nature. Let’s start with the most important terms – you’ll face every day as a trader. Symbol – Name of market you want to trade: The symbol represents the unique identifier of a specific financial instrument or market. It is the special name that is given for each market. For example, in the stock market, symbols are typically a combination of letters that represent a particular company’s shares. In the forex market, symbols are currency pairs such as EUR/USD or GBP/JPY. In the commodity market each have their own symbol i.e. Gold = XAU/USD, GCI Go to TradingView head over to Symbol search and start searching and adding to your watch list. Side: Buy (go long) or Sell (go short): The “side” refers to the direction of your trade. Buying (going long) means you believe the price of the instrument will rise, and you aim to profit from the increase. Selling (going short) means you anticipate the price will fall, allowing you to profit from the downward movement. The choice of the side depends on your market analysis and trading strategy. Quantity: No. of CFDs or lots: The quantity represents the number of Contracts for Difference (CFDs) or lots you want to trade. This is all dependent on your risk profile and portfolio size. CFDs allow you to speculate on the price movements of an underlying asset without owning the asset itself. The quantity determines the exposure and potential profit or loss of your trade. It’s important to consider your risk tolerance and account size when determining the appropriate quantity to trade. Order type (Market or limit): The order type specifies how you want your trade to be executed. A market order is executed immediately at the most current market price. This type of order guarantees execution but does not guarantee a specific price. So there might be slippage (where you get in versus where you wanted to get in) which can interfere with your Risk to Reward. A limit order allows you to set a specific price at which you want the trade to be executed. So basically, you LIMIT The price you wish to enter. The order will be executed only if the market reaches or exceeds your specified price. Validity: How long to hold: Validity refers to the duration for which your order remains active. Common options include: GTC: “Good Till Cancelled” where the order remains active until you manually cancel it. FOK: Fill or Kill: This type of order requires immediate execution of the entire order quantity. If the full amount is not executed, it is then cancelled. GTD: “Good Till Date” (GTD), where you can specify a specific date until which the order is valid. MIT: Market if Touched: This order is triggered when the market price reaches a specified level (trigger price). It then becomes a market order and is executed at the best available price. LIT: Limit if Touched: If a Limit if Touched order is triggered when the market price reaches a trigger price. However, it becomes a limit order with a specified limit price and will only be executed at or better than the limit price. Levels: Entry, Stop loss, and Take profit: These levels are essential in managing your risk and potential profits. Entry Level: The price at which you enter the market by opening a trade. Stop Loss Level: A predetermined price level at which your trade will automatically close to limit potential losses if the market moves against you. Take Profit Level: A predetermined price level at which your trade will automatically close if the market moves in your favour. What trading term do you want to know more about and let us know if this was useful!
TVC:SA40Education
by Timonrosso
Just Don't Trade When...Just Don’t Do It Trader By now, you know what to do as a trader. I’ve pretty much drilled in your mind. You can hear my voice echo the 4 Ms. But one overlooked thing that’s also important… Are the things not to do. Let’s crack into the 5 things… #1: DON’T fear losing – It’s just the cost of trading Losing trades are an inevitable part of trading. So why fear losses if they are going to come. And it’s not just one or two losses. You’re about to take thousands of losses in your life. But don’t see them as losses. Instead, view them as the cost of doing business in the markets. Every trade carries a level of risk (hence we use stop losses in every trade). And losses are opportunities to learn and refine your strategies (if need be). So make it natural to embrace your losses as a part of the trading process. This way you’ll cut the ego, and take on each trade with a more objective and focussed point. #2: DON’T dwell on past failures – You are only as good as your last trade While it is essential to learn from past mistakes. If you dwell on them, they will excessively hinder your hard worked progress. Trading is an ever-evolving journey, and each trade presents a new opportunity. Instead of fixating on past failures, blown accounts, big drawdowns and times you just F*ed up with your trading system and mentality… Rather focus on the present and future. There is only NOW and what is to COME. So apply the past time lessons and focus on improving your decision-making performance in the next trade. You are only as good as your last trade. #3: DON’T expect fast riches – This is a slow and gradual process Trading is not a get-rich-quick scheme. If you expect to make it big in the first three years, I have news for you. Unless you already have a million rand portfolio to grow and bank from, this is going to take take. Cut out these unrealistic expectations because it’s going to be an emotional ride with excessive risk-taking. Instead, adopt a long-term perspective, set realistic goals and understand that trading success is a gradual process. Let the power of compounding work in your favour over time. #4: DON’T compare yourself to others – Your personality & risk profile shape you Each trader is unique. You are unique. Therefore, you have different risk tolerance levels, trading styles, and market perspectives. If you compare yourself to others, you’re going to feel inadequate and you’re going to enter into temptation on imitating their portfolios. It is essential to embrace your own strengths and weaknesses as a trader. Understand your personality, risk profile, and trading preferences, and align your strategies accordingly. Find what works for you and develop a personalized approach that suits your individual needs and goals. Trading is a self-learning journey that takes time and effort to master. #5: DON’T give up – You only lose when you quit! Persistence is key in trading. It is natural to face challenges and setbacks along the way. But the only time you truly lose is when you give up. Stay committed, maintain a positive mindset, and keep pushing forward. You still being in the game is what will differentiate you between failure and success. So let’s conclude what you must NOT do… #1: DON’T fear losing – It’s just the cost of trading #2: DON’T dwell on past failures – You are only as good as your last trade #3: DON’T expect fast riches – This is a slow and gradual process #4: DON’T compare yourself to others – Your personality & risk profile shape you #5: DON’T give up – You only lose when you quit! Just don’t do it, trader!
TVC:SA40Education
by Timonrosso
1
Revenge Trading is Lethal - 5 Reasons Why!Do you feel it in your bones. Where do you want to: Take trades to make up for losses? Take trades for the sake of trading? Take trades out of emotions and gut (gat feel)? Take trades to make a quick buck? If so, you have felt the power and dangers of Revenge Trading. TO put it blunt. Revenge trading is detrimental, dangerous and just plain stupid for any traders to succumb to. I feel like I can finish the article already as I have said what I needed to. Not just yet! You need to understand why Revenge Trading is to your downfall. Let’s start with these: #1: Impulsive decisions are dangerous In the heat of the moment, you just want to take an impulsive trade. This can lead to disastrous outcomes. Revenge trading happens when you want to try recoup losses quickly. And so traders abandon their strategies, systems and rules. And they take on unwarranted risks. This will stop you from making good, calculated, logical and well-informed decisions based on sound reasoning and market research. Don’t do it! #2: Trading on emotions is deadly Emotions such as fear, greed, and frustration have no place in trading. Revenge trading is fueled by these emotions. And this causes traders to deviate and steer way from their plans by instead acting irrationally. What then? Bigger losses, unnecessary risks to the portfolio and skewed results on your trackrecord. Your hard earned and timely worked on journal! Is it worth it? I think not. Cut out your emotions and work at being calm and take on the more logical approach, devoid of emotional interference. #3: Violating trading rules is damaging Every trader should have a set of well-defined trading rules in place. Not just rules but also a list of criteria. Revenge trading typically involves disregarding these rules and just going against everything you should do. Basically, what the average dumb retail trader does which results in 98% of traders losing in this financial endeavour. Violate your rules and there will be severe consequences. Loss of confidence. Bigger losses More losses Erratic wins (which make you want to do it again and again and again) Not worth it. Don’t do it. #4: Too much unnecessary risk You know you’re using your hard earned cash to trade and build a portfolio right? So why are you burning it and cutting it up like it’s nothing? This reckless behavior can lead to bigger drawdowns and can even wipe out trading accounts entirely. Don’t do it! #5: Creates an ongoing cycle of doing it again Great! Once you have violated your rules, gone against your strategy and pretty much gone ape or rogue on trading – it takes a lot to gain ones integrity and discipline back. One of the most dangerous aspects of revenge trading is its cyclical nature. Break the rule, you’ll break it again. Cheat, you’ll cheat again. Enter a gambling mentality and you’re in trouble. Bank a winning rogue trade and you’ll succumb to the trading world of discretionary action. However, if these subsequent trades result in further losses, the cycle repeats, trapping traders in a never-ending loop of revenge trading. Breaking free from this destructive pattern will then need a ton of discipline, self-awareness, and a commitment to sticking to one’s trading plan. So please be careful. Trade well! Don’t trade like gambler. Avoid the perils of revenge trading by all means, starting from today. And when you feel the need to do it (like a junkie), come back and read this article. Had to be said.
TVC:SA40Education
by Timonrosso
5 DANGERS of Trading Penny StocksJust so you know. I believe if you’re following a world renown and successful Penny Share expert, you’re in good hands. They are able to spot low risk investments and guide you through the process of owning great Penny Stocks. But as a trader , who only looks at charts – THIS IS DANGEROUS TERRITORY. Remember, Penny Shares are high risk, high volatile, low credible companies that are LOW prices i.e. Under $1.00. And so, I just want to write as a trader point of view five key reasons why penny stocks can be dangerous to traders. DANGER #1: High Volatility (Jumpiness) Penny stocks are notorious for their high volatility. These stocks tend to experience rapid and drastic price fluctuations, often without apparent reasons. I’m talking about companies that can jump 10%, 30% and even 70% in a day. The lack of stability and price predictability can make it very difficult for traders to make informed decisions. Sudden price jumps or drops can result in significant gains or losses within a short period, amplifying the risk factor. And if you place your stop loss within a tight range, there’s a bigger chance you’ll get stopped out. DANGER #2: Low Liquidity (Less Volume) Think of Liquidity like the flow of water. It tells you the ease of being able to BUY or SELL a market, without impacting too much of the price. Once again, we look for low to medium volatility. Penny stocks typically have low liquidity due to limited trading volume. With fewer buyers and sellers in the market, it can be difficult to execute trades at the prices you want. And this leads to slippage and even higher transaction costs. Also, low liquidity may also prevent you from even entering or exiting your positions quickly. And this can even TRAP you in an unfavourable market environment for an extended period of time. DANGER #3: Not Established Businesses Penny stocks are often associated with small, early-stage companies that are not yet established in their respective industries. These companies may lack a proven track record, have limited financial history, and face various operational and market risks. So if you want to invest in these type of companies as a trader, it’s better you do it with fundamentals, research, business models and future prospects. If you do it purely on speculative purposes, this could be very risky for your portfolio. DANGER #4: More Likely to Head to Zero Yes all trading requires levels and degrees of risk and rewards. But it is not worth it, if some petty company is doing really badly and is showing signs of going to 0.00. Penny stocks are more susceptible to declining in value and potentially heading towards zero. I mean, South Africa has witnessed instances where penny stocks have experienced substantial losses, which took out a ton of investors. For example, companies like African Bank Investments Ltd (ABIL) and Oakbay Resources and Energy Limited serve as cautionary tales, where investors lost huge amounts as these companies approached or reached bankruptcy. Talking about bankruptcy. DANGER #5: High Chance of Bankruptcy and Liquidations Penny stocks are also more likely to go bankrupt or get liquidated compared to a Blue-chip stock. This is because of the nature of the companies, the inexperience, the lack of funds and structure, as well as its credibility. Financial instability, mismanagement, or unfavourable market conditions can lead to the collapse of these businesses. We saw this also in South Africa with the liquidation of Sharemax Investments and the bankruptcy of Pamodzi Gold Limited. This lead investors with little to no value for their investments. So remember this as a traders We want low volatility, high liquidity (volume), credible companies with great reputations, track record and credibility. And we want attractive charts that work with our trading strategies. If you want to be a savvy Penny Share investor that's fine. But as a trader, I have given my precautions.
TVC:SA40Education
by Timonrosso
Optimal Guide to Action Trades BetterThere are only a few decisions you need to make as a trader. When you actually need to press buttons to action trades. To enter, to adjust and to exit. It’s crucial for you to know when is the right time to do so. You need to consider certain factors and criteria to enhance the chance of profitability. And at the same time to mitigate risks. So here are four optimal actions you’ll need to take. When the Trading Signals Line Up – ACTION! This one is a given. When your trading system, strategy and signal all align. This refers to the convergence of multiple indicators or technical analysis tools, such as breakout patterns, Smart Money Concepts, moving averages, trend lines, or oscillators. When these signals confirm each other, it presents a higher probability trade setup. You need to wait for the confirmation though and the go ahead. This way, you’ll gain the competitive edge for when to enter and to avoid premature trades. Adjust the Stop Loss or Take Profit Levels – ACTION! During a trade, it is essential to monitor the market closely and be ready to adjust the stop loss or take profit levels (according to your strategy). This should NOT be guess work. This should be calculated on probabilities and in a way that you can optimise the strategy in a mechanical fashion. The stop loss is a predetermined level that limits the potential loss on a trade. While the take profit is a predefined level at which a trader intends to exit the trade with a profit. As the market evolves, price action and new information may necessitate revising these levels to protect profits or minimize losses. Which we often do as traders to increase the win rate and lock in potential and minimal profits. Traders should remain flexible and make timely adjustments to ensure their trade is aligned with the prevailing market conditions. When the Time Stop Loss Hits – ACTION! In certain trading scenarios, there may be a need to exit a trade before it becomes a long-term investment. This is particularly relevant in markets where overnight positions incur daily interest charges, such as in some derivative or forex markets. Traders must set a predetermined time stop loss i.e. 7 weeks holding a trade. You don’t want to incur too many interest charges. You don’t want to MARRY a trade. You don’t want to have capital tied up in stock during nonperforming trades. This is an opportunity cost where you can choose better trades to line up. If this time stop loss is reached, it is prudent to exit the trade (no matter what time of day it is), even if it is still within the specified stop loss or take profit levels. Either you’ll take a less than desired profit or less than expected loss. By adhering to the time stop loss, traders can avoid accumulating excessive interest charges and maintain your trading strategy’s integrity. When a Freak Anomaly Spooks the Market, like a Black Swan – ACTION! In rare instances, unforeseen events or anomalies, often referred to as Black Swan events, can greatly disrupt financial markets. These events are characterized by their unpredictability and magnitude, causing extreme market volatility. Normally when a market or index moves 10 times the standard deviation of it’s normal move. When such anomalies occur, it is crucial to act swiftly and exit the trade. Trying to ride out these events can lead to substantial losses. By recognizing the abnormality and promptly exiting the trade, traders protect their capital and avoid unnecessary risks associated with highly volatile market conditions. That’s it. A few but powerful times you need to take action to lock in, protect, manage, bank and call it quits. Master this and you’ll make better and well-timed decisions and adapt your positions to changing market conditions.
TVC:SA40Education
by Timonrosso
4
5 QUESTIONS Before you Take your TradeWith each trade you take… There are these 5 standard questions you’ll need to ask an answer. Jot these down and have them ready… Do I Have a Trade Lined Up? When you go through your watchlist. You need to see any opportunities in the market that align with your trading strategy. These should stick out like a sore thumb. If it’s not, then it’s probably not a high probability trade. It’s important to analyze the market trends and indicators to identify potential trades. This will help you to make informed decisions and avoid taking unnecessary risks. Do I Have a Trading Strategy? Once you have identified a potential trade, it’s important to have a solid trading strategy in place. Your strategy should outline the rules for entering and exiting trades, as well as risk management guidelines. Follow your strategy and avoid making impulsive decisions based on emotions or market rumors. Where Should I Place My Trading Levels? You got the strategy so now you have to set up your trading levels. (Entry, Stop loss, Ghost level, Take profit levels) Are you using Order Blocks, key support and resistance levels, patterns, indicators or trend lines? Whatever you use, keep consistent to determine where to place your trading levels. This will help you to choose your trading levels based on the R:R for each trade. How Much Am I Trading? Trade size is crucial. You need your calculator to work out your risk per trade. This will help you to manage your risk effectively and avoid making emotional decisions. Your risk management plan should outline the maximum amount you are willing to lose on any given trade, as well as the maximum percentage of your trading account you are willing to risk. What Is My Exit Strategy? exit strategy should outline the conditions under which you will exit a trade. So you’ll know where to cut your small losses, ride your winners, lock in profits, or even adjust your take profit levels when the markets move well in your favour. Also, make sure you stick to your exit strategy and avoid making emotional decisions based on market fluctuations. THEN YOU’RE READY TO EXECUTE! Once you have gone through the five questions… It’s time to ask yourself whether you are truly ready to take the trade. Focus your mind, clear the distractions, confirm everything is ready to go… That takes emotional discipline. You got the questions, now go start asking and answering them with your trading…
JSE:J200Education
by Timonrosso
When you’ve taken a trade – Let It Go!One of the key principles of successful trading is… Once you have taken the trade to just let it go and allow it to run its course. The system lined up – tick. The entry orders are all in place – tick. It matches your risk and reward criteria – tick. You know your trade size – tick. Now let it go. You may get the urge to interfere, change the levels and lock in profits early or limit losses even more. You need to resist the urge. Here are some factors to consider… Don’t Interfere… When you’ve taken a trade, it’s important to have a plan in place for how you will manage it. This means you’ve got your entry, stop loss and take profit in place. These actions may seem like a good idea at the time. But they can often lead to bigger losses, smaller profits and even missed opportunities. But then there are times where you need to adjust the course. You might even have a time stop loss. Or a strategic and mechanical criteria for when to adjust your levels. But other than that, you need to have the discipline to stick to it and resist the temptation to interfere with your trades. Don’t Get Excited When It’s in the Money One of the most common mistakes that traders make is getting too excited when they’re in the money. You might feel overconfident and “know-better” about a trade. Or you might have this irrational decision-making idea to quickly move your stops and take profits, which can quickly erase any gains that you’ve made. It’s essential to remain level-headed and stick to your plan, even when your trades are performing well. To avoid getting too excited when you’re in the money, go back to your journal and look at how your trades have played in the past. It’s important to have a clear idea of your risk tolerance and profit targets before you enter a trade. This will stop you from making any quick and unnecessary decisions along the way. Don’t Fear When It’s Going Against You Another common mistake that traders make is letting fear dictate their decisions when a trade is going against them. It’s natural to feel anxious when you’re losing money. But it’s important to remember that losses are a normal part of trading. We all take them and we are all bound to take them more times than we wish to think. To overcome the fear of losses, it’s important to focus on the long-term goals of your trading strategy. One way to do this is to maintain a positive mindset and view losses as “costs of business” and as learning opportunities rather than failures. Stay calm and level headed. Also stop risking so much that it interferes with your psychology. When you feel emotional take a step back or it could lead to even bigger losses. Don’t Watch Every Tick Finally, it’s important to resist the urge to obsessively watch every tick of the market. This can lead to overtrading and emotional decision-making. And you’ll find it will quickly derail your trading strategy. Instead, it’s important to focus on the big picture and have a long-term perspective on your trades. Close your computer once you’ve taken a trade. Or close your trading platform and move onto something else. You’ve done your job now stop watching every tick the market moves. By doing so, you’ll be less likely to make rash decisions based on short-term fluctuations in the market. I hope this helps and if there is one thing to remember out of them all. When you’ve taken a trade, just let it go and let it run its course.
JSE:J200Education
by Timonrosso
1
Gym Well - Trade Well!When you gym well, it’s like trading well. You gym to tone, to lose weight to build muscle and to build discipline. With trading you trade to build your portfolio, build confidence, create a secured financial future and work on your mindset for life. Both pursuits require consistent effort, perseverance, and a strategic approach. Gym is an important element in my life and so I want to explore the similarities between trading and gymming, and how each can lead to success in their respective domains. You Put in the Work Every Day: Gymming and Trading Like a regular gym routine, successful trading requires dedication and consistency. You can’t expect to see results overnight – you need to put in the work every day. As a trader you must constantly educate yourself on market trends, stay informed about global events, and analyze past performance to make informed decisions. Just as gym-goers must adhere to their workout schedules, traders should establish a daily routine that involves researching and analyzing the market. You Pick Up the Portfolio (Weights) as You Make More Money When you gym, you gradually increase the weights you’re lifting to build strength and endurance. Similarly, as you become more experienced and successful in trading, you can gradually increase your investment portfolio. As your confidence and financial gains grow, you may choose to diversify your portfolio and take on a variety of different assets to spread risk, lower risk, optimise and maximize your returns. Don’t Overtrain – Don’t Overtrade Overtraining at the gym can lead to injury and burnout. And if you over trade in the market, it can result in financial losses and emotional exhaustion. It’s essential to strike a balance between staying active and giving yourself time to rest and recover. In trading, this might mean you: Set your limits on the number of trades you make each day or week Identify the goldilocks zone risk per trade Know when to hault trading or lower risks during a drawdown period. And most importantly. Remember, trading is a marathon, not a sprint. So pace yourself accordingly which is crucial to long-term success. It’s a Forever Process (Takes Time) Both gymming and trading are long-term commitments. You won’t see immediate results in either pursuit. It takes time and dedication to achieve your goals and to identify your trading risk and personality. In the gym, you can expect to see gradual improvements in your strength, endurance, and overall fitness. In trading, you’ll gain experience, knowledge, and a more refined strategy as time goes on. So stay dedicated, and you’ll be well on your way to achieving your goals. Let me know if you gym and if it helps your trading :)
JSE:J200Education
by Timonrosso
2
STOP Impulse Trading at once – 5 Actions to takeOne of the most dangerous traits a trader can adopt is… Impulse Trading. This is where they take trades mainly on emotions and gut rather than sound financial analysis. This means, more risk, more irrational choices and that can lead to steering away from what works. Your proven trading strategy! And the end result, you’ll lose in the long term and end up with less confidence for your future endeavours as a trader. So let’s come up with certain ways for you to STOP the impulse trading. ACTION #1: Give it an hour When you feel the urge to make a trade based on emotions, it can be helpful to step back and take a break. One great way is to wait for an hour before you make any decisions. Go get something to eat, grab a beer, go walk your crocodile or go do something other than trading. Close your computer if you feel you’re about to impulse trade. This break can help you regain a sense of perspective and avoid making impulsive decisions that you may later regret. ACTION #2: Remember your long term goal I always say… Financial trading is a long-term game. You need to have a clear and specific long-term goal in mind that guides your decisions. When you feel the urge to make an impulsive trade, take a moment remember your trading record, journal and what works. Also, remember it’s not about the one trade but the hundreds of trades later… Ask yourself whether this trade aligns with your overall strategy or whether it’s just a momentary impulse. This can help you stay focused and disciplined in your trading. ACTION #3: Revisit your journal Your journal is pretty much your game-plan. It foretells of the most probable outcome when you follow it. And it should include a record of all your trades, your thoughts and feelings at the time of the trade, and the results of the trade. When you feel the urge to make an impulsive trade, take some time to revisit your journal. Look at your past trades and the results they produced. My favourite… Go look at your drawdowns. Go look at your biggest drawdowns. Then go see how you came out of the drawdowns and your portfolio headed to NEW all time highs. There is no better feeling than that. Do this and I doubt you’ll want to take any impulse trades again. ACTION #4: Read more trading psychology Mind is everything with trading. It’s a great way to develop your discipline and avoid impulse trading. Either go read trading books, articles, watch YouTubes or just save this article. I can almost guarantee… If you read this article, when you feel like taking an impulse trade – You will stop that primitive way of thinking. You’ll stop that inner conscience from trying to ruin your trading performance. ACTION #5: Avoid Overtrading If you find you take MANY trades at a time… You’ll be more inclined of taking impulse trades, because you feel you need to take more. Try and have a cap when it comes to the number of trades you hold. I used to never hold more than 5 trades. But over time, with adopting into new markets and evolved markets – that number gone up. Now I make sure I never have more than 12 trades opened at any one time. Remember to give yourself time to reflect, keep your long-term goals in mind, revisit your journal, and read more about trading psychology. Let’s bring back the 5 actions to avoid taking any impulse trades. ACTION #1: Give it an hour ACTION #2: Remember your long term goal ACTION #3: Revisit your journal ACTION #4: Read more trading psychology ACTION #5: Avoid Overtrading Let me know if this was useful in the comments.
JSE:J200Education
by Timonrosso
7
Don't listen to your inner NINNY! I can't swear on TV :(Traders have 1 JOB!. To just take the trade. All the other stuff is semantics. But most times you’ll find your inner B I mean Ninny takes over. And it tells you: ~ Don’t take the trade. ~ You’ll lose money. ~ The stars are not aligned! ~ Blah blah fish paste! You need to stop listening to your inner F - inny, or it will destroy your chances of success. So let’s talk about the 4 common excuses traders make and how to overcome them. Excuse #1: I’m not in the mood The markets are awake with or without you. People are making money and doing things in this world. Others are taking ice baths, cold showers, hitting the gym twice a day. They are doing the hard. You need to stop the excuses of not in the mood, get off the couch and take action for your life. You are in control of your life, what you do and what you make. Do what you need to. Create a schedule that includes time for exercise, meditation, and of course trading. Excuse #2: External news event kicked in Financial markets are subject to external events that can impact trading decisions. These events can include political developments, natural disasters, or major economic announcements. The problem is. These events come daily. Every day there are new news announcements, GDP numbers, employment and jobs reports, Interest rates, inflation rates etc…If you’re not taking a trade because of one of these announcements, I’m sorry but. That’s just an excuse! If you must. Write down a few IMPORTANT news announcements that you want to watch for when you trade. Maybe interest rates in America. Maybe NFP reports, Maybe during FOMC meetings. But do the research and find out what news events are worthy to NOT take a trade. I’ve been in the markets for 20 years and I haven’t found one worthy news announcement other than NFP for Forex trading. Excuse #3: Market doesn’t feel right To you it doesn’t feel right. To you, you think the market is some sentimental machine that feels healthy or sick. To me, I see prices, risks and probabilities. I see a robot and mechanical processes with billions of dollars streaming in and out at any one second, the market is opened. You need to develop an objective criteria for assessing market conditions. Have tunnel vision and stop trying to predict the temperature of the market. It’s not human. There is buying. There is selling. There is a repetition of that every day. Market doesn’t feel right, is an excuse. Excuse #4: System lined up but it’s not perfect Ok so you have a system good. You have a strict strategy to follow, great. But the system lined up and it’s not perfect. As I mentioned before. You need to write down the rules and criteria that you can use to identify opportunities and risks. There are only three types of trades in this world. HIGH probability trade – Market lined up perfectly according to the system. MEDIUM probability trade – Market almost lined up perfectly but I will still take the trade and risk a little less. NO trade – Market did NOT line up and therefore I’m not taking a trade. So, are you going to continue to listen to your inner Busy Ninny or are you going to start making money the right way?
TVC:SA40Education
by Timonrosso
GLOSSARY Smart Money Concepts - Complete Terms!It's taking the world by a storm. Smart Money Concepts is what has become famous lately. Now I've been trading for 20 years and even I have learnt to adapt and adjust SMC to my trading strategy. I guess we have to evolve and adapt with what there is. Anyways, Today, I've written a complete Glossary on Smart Money Concepts terms for you. Enjoy! SMART MONEY CONCEPTS GLOSSARY Break Of Structure (BOS) (CONTINUATION) A BOS is when the price breaks above or below, and continues in the direction of the trend. (CONTINUATION). Break Of Structure Down When the price breaks and closes BELOW the wick of the previous LOW in a DOWNTREND. Break Of Structure Up When the price breaks and closes ABOVE the wick of the previous HIGH in an UPTREND. Buy Side Liquidity (Smart Money SELLS) Where an Order Block forms where Smart Money SELLS into retailers (dumb money) BUYING orders - Pushing the price DOWN. Change of Character (CHoCH) (REVERSAL) Refers to a much larger shift in the underlying market trend, dynamic or sentiment. This is where the price moves to the point where there is a change in the overall trend. (REVERSAL) Change of Character Down When the price breaks and closes below the previous uptrend. Change of Character Up When the price breaks and closes above the previous downtrend. Daily bias Tells us which direction, trend and environment the market is in and what we are looking to trade. Daily bias Bearish When the market environment is DOWN and the trend is DOWN - we look for shorts (sells) in the market. Daily bias Bullish When the market environment is UP and the trend is UP - we look for long positions (buys) in the market. Discount market <50% The market is at a discount when the price trades BELOW the equilibrium level. We say the price is at a discount (low price). Equilibrium Equilibrium is a state of the market where the demand and supply are in balance with the price. We say the price of the market is at fair value. Fair Value Gap (FVG) A 3 candle structure with an up or down impulse candle that indicates and creates an imbalance or an inefficiency in the market. Fair Value Gap Bearish A 3 candle structure with a DOWN impulse candle that indicates and creates an imbalance or an inefficiency in the market. Between candle 1 and 3, do NOT show common prices. The price needs to move back up to rebalance and fill the gap. Fair Value Gap Bullish A 3 candle structure with an UP impulse candle that indicates and creates an imbalance or an inefficiency in the market. Between candle 1 and 3, do NOT show common prices. The price needs to come back down to rebalance and fill the gap. Levels of liquidity The area of prices where smart money players, identify and choose to BUY or SELL large quantities. E.g. Supports, resistances, highs, lows, key levels, trend lines, volume, indicators, psychological levels. Liquidity The degree, rate and ability for an asset or security to be easily bought (flow in) or sold (flow out) in the market at a specific price. Liquidity sweep (Liquidity grab) Smart money buys or sells (and sweeps or grabs liquidity) from traders who enter, exit or get stopped. Market down structure When the price makes lower lows and lower highs. Market structure Indicates what a market is doing, which direction it’s in and where it is more likely to go. Market Structure Shift (MSS) MSS shows you when the price is breaking a structure or changing the direction in the market. Market up structure When the price makes higher lows and higher highs. Order block Large market orders (big block of orders) where smart money buys or sells from different levels of liquidity. Order Block Bearish A strong selling or a supply zone for smart money. Order Block Bullish A strong buying or a demand zone for smart money. Order block events Large market orders where smart money buys or sells from certain events i.e. High volume, supports, resistances, highs, lows, key levels, Break Of Structure, Change of Character, News or economic event. Point Of Interest (POI) POI is an area or level in the market where there is expected to be a large amount of buying or selling activity i.e. Order blocks. Premium market >50% The market is at a premium when the price trades ABOVE the equilibrium level. We say the price is at a premium (high price). Sell Side Liquidity (Smart Money BUYS) Where an Order Block forms where the Smart Money BUYS into the retail (dumb money traders orders - Pushing the price UP. Smart Money These are the smart, informed, and savvy financial institutions that invest (buy and sell) their large capital into different financial markets. Smart Money Concepts SMC is a more sophisticated method of price action to spot, identify and locate where smart money is buying and selling their positions Sweep Buy Side Liquidity (Smart Money SELLS) Smart Money SELLS into positions (and sweeps liquidity) from retail traders who are short (get stopped) and for long traders who buy and enter their trades. Sweep Sell Side Liquidity (Smart Money BUYS) Smart Money BUYS into positions (and sweeps liquidity) from traders who are long (get stopped) and for short traders who enter their trades. Feel free to print this out and have it as a guide to your Smart Money Concepts trading journey. All the best!
SP:SPXEducation
by Timonrosso
Trading Success Stoppers Part 2 Trading can be an excellent way to grow your wealth. But as you may know by now, it’s not a straightforward path without obstacles. In fact, several challenges can hinder traders from achieving success in the field. Here are four more significant success stoppers that traders face in their trading efforts. No Support from Anyone Trading can be a lonely and isolating field. Once you have the strategy, rules and mindset in place – it’s all on you. Initially you may want strong support from a community of traders or confirmation ideas that you’re on the right path. My situation is different. Because I have traded for the last 20 years, it did become very lonely and it felt like I had more to offer. With TradingView at least I have a community to talk to and help out where I can. So you see, having a support system can make all the difference. Without support, it can be challenging to stay motivated and focused on your goals. And in the end you’ll realise there is more to trading than just making money. Solution: The key is to find a mentor or a community of traders who can support and guide you. Join online trading forums or attending trading events can be an excellent way to connect with other traders and build a support system. You can also consider hiring a coach or mentor to guide you and provide feedback on your trading strategies. Success stopper #2: Laziness Look! Trading requires discipline, focus, and hard work, and without these qualities, it can be difficult to achieve your goals. Lazy traders are the worst. They lack the motivation, drive, and discipline that’s necessary to research, analyse, journal and trade in order make informed decisions. You also need to be able to get up off your ass and trade each week. Sure, you can take off a few days a week – that’s the beauty. But don’t let laziness stop you for more than a few days! Solution: The key to overcoming laziness is to set clear goals and create a routine that supports your trading activities. Set aside specific times each day or week to research the markets, analyze charts, and execute trades. It can also be helpful to create a trading plan that outlines your goals and strategies, which can help keep you focused and motivated. Success stopper #3: No Money to Trade This is more of an excuse than a success stopper. You know you can paper trade until you nail the trading game, until you can start putting in capital. And when you do save money, you’ll be able to learn the real world of trading and understand the slippage, costs, liquidity, margin trading etc… Solution: The key to overcoming this challenge is to start small and build your way up. Consider opening a demo account to practice trading without risking real money. You can also start by trading with a small amount of capital and gradually increase your investment as you become more comfortable and confident in your abilities. Success stopper #4: No Skills and Talents That’s what you think. But I honestly believe I can take just about anyone with a bit of computer experience and show them how to make a consistent income trading the markets. Trading requires a specific set of skills, such as market analysis, risk management, and technical analysis. And these skills CAN be taught. Whether you’re a slow learner or a fast learner, you can learn the ways. Solution: The key to overcoming this challenge is to invest in your education and development. Take courses or attend seminars to learn the necessary skills and techniques for successful trading. You can also consider working with a mentor or coach to help you improve your trading skills and develop your talents. So what is stopping you from your trading success? I can only think of 1 thing. Go look at the mirror.
JSE:J200Education
by Timonrosso
Trading Success Stoppers Part 1Trading as you know is a fantastic alternative to grow your wealth. However, it is not without its challenges. In fact, there are several success stoppers that traders face that can derail their trading efforts. Let’s look at four of them. STOPPER #1: Same Old Routine One of the biggest success stoppers for a trader is falling into the same old routine. It is easy to get into a rut and continue doing the same things day in and day out. However, this can lead to a lack of progress and stagnant trading results. Yes you need the same ‘ol strategy, risk management rules and criteria for a consistent track record. But you also need to be open to try new things and adapting to changing market conditions. You can do this by: ~ Backtesting and forward testing other strategies. ~ Adapting new markets into your trading ~ Identifying new market environments ~ Even improving your current indicators and chart layouts Always looking out for better brokers, chart platforms and sources to help your trading Improving your calculators and trading tools. STOPPER #2: Self-Doubt This can cripple a trader’s confidence and ability to make sound trading decisions. It is natural to experience doubts and fears when trading. But make sure you don’t let it take over and lead you to emotional decisions, doubting during drawdowns and missed trading opportunities because of how you feel rather than what the charts say. To overcome this success stopper, you should focus on building your confidence and self-belief through trusting your proven track record. You can do this by keeping a trading journal to track your successes and failure. Also seek out the advice of a mentor or coach, and regularly review their trading plan to ensure they are on the right track – to help with your own confidence. STOPPER #3: Procrastination Procrastination is a common success stopper for traders. It is easy to put off making trading decisions or taking action on a new trading strategy. However, procrastination can lead to you never taking action which means: No trades No consistency No growth No results To overcome this success stopper, traders should develop a sense of urgency and take action quickly. Adapt the 1,2,3 JUST DO IT mentality as I mentioned in the previous video. Break down larger tasks into bite sized and more manageable ones and set deadlines to complete on time. STOPPER #4: No Big Idea Finally, having no big idea or vision for their trading can be a major success stopper for traders. You need to know your goals, strategy, risk profile and trading personality. When you do this you will have the BIG idea on what you need to progress and thrive. Stop these stoppers before they stop you from achieving trading greatness. Tune in tomorrow for Part 2!
TVC:SA40Education
by Timonrosso
How to get your Trading DoneTrading is the easiest hardest way to become financially free. You need to follow a simple approach and then have the discipline to do it again and again for the rest of your life. It can at first be a daunting task because you have to implement an element of risk. But before you know it, you’ll be free from your financial shackles and struggle. Here are five tips to help you get your financial trading done efficiently and effectively. Step #1: Always have your cheat sheet with you. A cheat sheet is a list of rules that you have set for yourself when trading. These rules are from how to spot trading signals, getting your trading setup ready, to implementing the maximum amount of money you’re willing to risk on a trade to the indicators you look for when deciding on a trade. Always make sure you have your cheat sheet with you to have a clear set of rules to follow. This way you’ll avoid making impulsive decisions. Step #2: Look for the right trading setups with high probability trades. Before you enter a trade, it’s essential to look for the right trading setup. A trading setup is a specific combination of conditions that must be met before you enter a trade. For example, you may look for a bullish continuation or reversal price breakout strategy, combined with a moving average crossover and RSI divergence indicator. Once you have identified the right trading setup, you can then look for high probability trades within that setup. Step #3: Execute your trades or just take the trade. Once you have identified a high probability trade, it’s time to execute the trade. When executing a trade, it’s important to remember that the market can be unpredictable. You may have done everything right and still end up losing money on a trade. Therefore, it’s essential to take the trade, execute your plan, and move on to the next opportunity. Step #4: Journal your trades It’s essential to keep a record of all your trades, including the reasons why you entered and exited the trade. This can help you identify patterns in your trading and make adjustments to your strategy as needed. This way you can record, monitor and also identify areas where you can improve and re-evaluate your trading plan accordingly. Step #5: Rinse and repeat the process. Finally, once you have executed a trade, recorded it in your journal, and made any necessary adjustments to your trading plan, it’s time to rinse and repeat the process. Trading is a continuous process. There will always be new opportunities to explore and it’s ALWAYS the right time to start or continue. If you follow the above steps, you’ll increase your chances of success and make the most of your trading endeavours.
TVC:SA40Education
by Timonrosso
5 TIF Trading Orders You need to KnowQ. What are the 5 common TIF (Time In Force) Trading Orders to know? GTC: “Good Till Cancelled” Where the order remains active until you manually cancel it. FOK: “Fill or Kill” This type of order requires immediate execution of the entire order quantity. If the full amount is not executed, it is then cancelled. GTD: “Good Till Date” Where you can specify a specific date until which the order is valid. MIT: “Market if Touched” This order is triggered when the market price reaches a specified level (trigger price). It then becomes a market order and is executed at the best available price. LIT: “Limit if Touched” If a Limit if Touched order is triggered when the market price reaches a chosen or trigger price. GTC (Good Till Cancelled). This way you’ll know that your position (order) will stay in the market until you cancel it manually. What trading question do you have? Let me know in the comments. Can you think of anymore?
TVC:SA40Education
by Timonrosso
Revenge Trading is Catastrophic - Here's why!Do you feel it in your bones. Where do you want to: Take trades to make up for losses? Take trades for the sake of trading? Take trades out of emotions and gut (gat feel)? Take trades to make a quick buck? If so, you have felt the power and dangers of Revenge Trading. TO put it blunt. Revenge trading is detrimental, dangerous and just plain stupid for any traders to succumb to. I feel like I can finish the article already as I have said what I needed to. Not just yet! You need to understand why Revenge Trading is to your downfall. Let’s start with these: #1: Impulsive decisions are dangerous In the heat of the moment, you just want to take an impulsive trade. This can lead to disastrous outcomes. Revenge trading happens when you want to try recoup losses quickly. And so traders abandon their strategies, systems and rules. And they take on unwarranted risks. This will stop you from making good, calculated, logical and well-informed decisions based on sound reasoning and market research. Don’t do it! #2: Trading on emotions is deadly Emotions such as fear, greed, and frustration have no place in trading. Revenge trading is fueled by these emotions. And this causes traders to deviate and steer way from their plans by instead acting irrationally. What then? Bigger losses, unnecessary risks to the portfolio and skewed results on your trackrecord. Your hard earned and timely worked on journal! Is it worth it? I think not. Cut out your emotions and work at being calm and take on the more logical approach, devoid of emotional interference. #3: Violating trading rules is damaging Every trader should have a set of well-defined trading rules in place. Not just rules but also a list of criteria. Revenge trading typically involves disregarding these rules and just going against everything you should do. Basically, what the average dumb retail trader does which results in 98% of traders losing in this financial endeavour. Violate your rules and there will be severe consequences. Loss of confidence. Bigger losses More losses Erratic wins (which make you want to do it again and again and again) Not worth it. Don’t do it. #4: Too much unnecessary risk You know you’re using your hard earned cash to trade and build a portfolio right? So why are you burning it and cutting it up like it’s nothing? This reckless behavior can lead to bigger drawdowns and can even wipe out trading accounts entirely. Don’t do it! #5: Creates an ongoing cycle of doing it again Great! Once you have violated your rules, gone against your strategy and pretty much gone ape or rogue on trading – it takes a lot to gain ones integrity and discipline back. One of the most dangerous aspects of revenge trading is its cyclical nature. Break the rule, you’ll break it again. Cheat, you’ll cheat again. Enter a gambling mentality and you’re beeped. Bank a winning rogue trade and you’ll succumb to the trading world of discretionary action. However, if these subsequent trades result in further losses, the cycle repeats, trapping traders in a never-ending loop of revenge trading. Breaking free from this destructive pattern will then need a ton of discipline, self-awareness, and a commitment to sticking to one’s trading plan. So please be careful.
JSE:J200Education
by Timonrosso
16 Trading Mistakes you’re still MakingIf you’re still failing as a trader. You could be making one or more of these common and lethal mistakes. #1: No Structured Approach If you’re not following a structured approach to evaluate potential trades, you’re likely to make mistakes. It’s essential to have a well-defined plan that takes into account your personality, risk tolerance and trading goals. #2: You trade on Emotions Trading decisions should be based on facts and analysis, not emotions or hunches. If you’re relying solely on your gut feeling, you may miss important information and make poor trading decisions. Trust the chart not your heart. (I like that!) #3: Not researching each market per strategy Even if you have a trading strategy, you need to research, back test and forward test EACH market to see if they are conducive with your trading. For example. I have traded Forex since the get-go and yet the EUR/USD (Euro Versus US Dollar) is still the one currency that NEVER works for my system. This is the kind of research you should know, before you make a trade or risk a trade. Lack of research can lead to costly mistakes and missed opportunities. #4: No Specific Trade Setup It’s important to identify a specific trade setup before making a trade. You need to determine and pinpoint your exact entry and exit points, stop loss level, and price targets volume and margin requirements. #5: Not waiting for your high probability setup It’s important to wait for a clear trade trigger before making a trade. This way you’ll know what the right market, at the right time is and what you need to do to minimize your risk and maximise your profit potential. #6: Not putting in your stop loss When you trade you need to remember something. You need to set your stop loss to limit your losses. You need to set your stop loss to follow a plan. You need to set your stop loss to prevent an emotional reaction to your trading where you can take significant losses. Always, always always set a stop loss level with each trade and stick to it. #7: Setting a tight stop loss If you set your stop loss level too close to the entry price, it will increase your chance of getting stopped out. It’s important to set a stop loss level that considers market volatility and your risk tolerance. #8: No clear exit price target Yes, a stop loss is more important than a take profit price. But a take profit price is VERY important when it comes to following your Risk to Reward strategy. You need to set the take profits so you can calculate your potential gains, to lock in gains and to have a mechanical plan to follow in the future. #9: Forgetting your Reward-to-Risk Ratio If you ignore your risk to reward level rule with trading, you might as well give up trading. The key is to always make sure that your potential gains are more than your losses. If you ignore your risk to reward you will make poor trading decisions and your performance will not be stable and consistent. These are losing traits. #10: You forget the anomalies! There are times where you might need to exit out of a trade prematurely. There are other market conditions that are wile and can impact your trade negatively. Whether they are black swans, market announcements, threats, dangers, fat fingers or even news events. Don’t forget to consider the anomalies to reduce a catastrophe. #11: You buy however much you want on margin When you trade derivatives you need to remember. You will be exposed to more money than what you deposit. You can LOSE way more money that you anticipated if things don’t go your way. You need to seriously understand the risks involved with margin and gearing trading before you even commit to trading derivatives. #12: You don’t diversify Some traders ONLY trade one index or one currency or one commodity. I believe this is not very good for the future. There are times where these markets enter into a stagnant period for months upon months on end. You need to find a way to diversify and trade a few more markets, to make up for the dangers of idling markets. It’s important to diversify your portfolio and spread your risk across multiple markets. #13: You chase the next best penny thing Chasing ‘hot’ penny stocks or penny cryptos is lethal. You’ll end up emotionally involved in them and you’ll find every reason (fundamentally and technically) to hold on because they are going to the moon. Remember, you need to research the markets that work with your trading strategy over at least 5 years. Any other markets, are dangerous and can lead to you blowing your account. #14: Not Emotional control Not managing your emotions appropriately and making impulsive trading decisions can lead to poor outcomes. When you lose you’ll feel like it’s the end of the world. When you win, you’ll feel you have trading down and life. Problem is these uppers and downers with trading will have an effect in your life negatively and will end up with you making very emotionally driven and triggering trading decisions. Then POOF. All will be gone. It’s important to stay calm and focused when making trading decisions. #15: No Trading Journal What are you basing your success on? A strategy you don’t even have proof whether it works or not. If you are Not using a trading journal to track your trades and evaluate your strategy over time, it can lead to a losing performance, unnecessary losses, missed opportunities for improvement and will leave you blinded to your potential. It’s important to keep a record of your trades and evaluate your performance regularly. #16: Not Learning from Mistakes Trading is a forever learning journey. You need to learn from EVERY mistake you make and move on. If you don’t learn you’ll continue to have a poor performance. It’s important to evaluate your mistakes and make changes to improve your strategy. Maybe even document every trading mistake you make in your trading journal. This way you’ll reflect and work on them for the future. Was that helpful?
JSE:J200Education
by Timonrosso
4 EXTRAS to add to your Trading Journal TODAYI’m sure you know by now. That every successful trader needs a trading journal. This is an essential tool to track, monitor, evaluate, record, and measure your trading success. However, I’ve come up with 4 EXTRA Journal Items that you can add to your journal that could help improve your trading, win rate and overall performance. We can call these the “Trading Journal Extras.” Let me know if you think any of these will be helpful to add to your journal. EXTRA Journal Item #1: MY EMOTIONS Emotional State When Taking Trades Trading can be an emotional rollercoaster. When you lose, it feels like everything is out to get you. When you win, it can feel like you’ve nailed life in a bag and you can do this for the rest of your life. But what if you actually journaled your emotions? Every time you take a trade or you bank a loss or gain, document it in a section saying “EMOTIONS. This element to your Trading Journal can help you identify patterns in your emotional state that may impact your decision-making abilities in the future. You will also see who you are personally and how you emotionally handle trades. Watch it improve over time. For instance, if you find that you’re more likely to make impulsive trades when you’re feeling anxious or stressed, you can take steps to manage your emotions before taking trades. This can help you make better decisions and minimize the risks of impulsive trades. EXTRA Journal Item #2: MISTAKES LEARNED Mistakes Made and Lessons Learned As a trader, you’re bound to make mistakes, and it’s essential to learn from them. So why not write them down. Incorporate the mistakes you made in your Trading Journal. This way, it can help you avoid making the same errors in the future. For example, if you realize that you lost way more than 2% for a trade. Write down where you went wrong. Did you over capitalise? Did you extend your stop loss? Did you hold on longer than you should (which the costs added up)? Did you follow your strategy and risk management rules? Write down the mistake and you’ll have a better chance of avoiding it in the future. EXTRA Journal Item #3: NEWS REACTION Market Reaction to News Events You won’t find this in my journal. But I know many traders who trade using market fundamentals and news analyses. And if you’re a day trader, Forex trader or a high frequency trader – then this item might be imperative to your trading journal. The market’s reaction to news events can cause major whipsaws, fakeouts and shakeouts. You might find it interesting and educational track how the market behaves before and after a news release. E.g. NFP (Non Farm Payrolls). Unemployment numbers Interest and Inflation rates announcements Quantitative Easing Earnings Reports and so on… For instance, if you notice that the market reacts positively to news about a particular sector or asset, you can make an informed decision to invest in that asset or sector. Similarly, if you notice a trend of negative market reactions to news events, you can use that information to minimize your losses. EXTRA Journal Item #3: TRADING LESSON Trading Lessons and Strategies Finally, as a trader, you must keep learning and growing. If you learnt something about trading, WRITE it down in a journal entry. Adding a section in your Trading Journal called LESSON OF THE DAY. Then record the trading lesson/s and strategies you learnt which can jog back your member and it can help you improve your skills, application and knowledge. The FOUR extra Trading Journal Entries A Trading Journal with these EXTRA items can help you excel as a trader. Thins like emotional state to identify patterns, writing down mistakes to avoid repeating them, tracking market reactions to news events to inform decisions, and recording trading lessons and strategies to continuously learn and improve. So here’s a sum up of the FOUR EXTRAS that you can apply to your journal. MY EMOTIONS Document emotions every time you take a trade or bank a loss/gain MISTAKES LEARNED Write down mistakes made and where you went wrong in your Trading Journal NEWS REACTION Track the market’s behaviour before and after news releases TRADING LESSON Record lessons and strategies learnt that will help with your trading Let me know if this helps and which out of the FOUR you’ll add to your trading journal?
TVC:SA40Education
by Timonrosso
4 Ways to STOP Impulse TradingHow do I STOP Impulse Trading? Just a reminder. An impulse trader is one who makes quick, irrational decisions to take a trade (long or short) for some form of immediate satisfaction it may bring in the short run. Impulse trading might occasionally work. But it's risky and can damage your trading confidence and psychology in the long run. That’s because when you win, you’ll take more impulse trades that go against your strategy. But then the winning streak will end and the losing streak will come. And that’s where you’ll blow your portfolio eventually. So, to help you overcome impulse trading, I suggest these three solutions: Solution #1: Take a break When you feel the urge to make an impulsive trade, step away from your computer for an hour. Use the time to go cook a meal, go for a walk, or do something else that helps you relax. Then when you’re feeling more relaxed and in tune, you can come back to trade the markets with a refreshed, rational mindset to see what has or is lining up. Solution #2: Reflect on your trading history Review your trading track record. It is your game plan. It shows you the potential of what is to come. And it allows you to look at your past data and trend of your portfolio. Consider the gains and losses you've experienced and remind yourself of why it is super important to stick to your trading strategy. This alone should help you resist impulsive trades. Solution #3: Set specific conditions for impulse trading If you still struggle to control your impulsive trading instincts, then this might be the best idea. Open a separate trading account with disposable funds. This way, you can indulge and take your impulse trades without jeopardizing your primary trading strategy and account. Maybe it’s a R10,000 or even a R50,000 account. Or if you just want to trade for trading sake it, it might be a R5,000 account. Whatever it is. When you feel impulsive, trade using your impulse trading account. And then when it comes to your main account, you’ll be able to follow your specific trading strategy according to your track record. Remember, trading should be approached and seen like running a business, not like playing a slot machine. Keep this in mind, and this should help save your portfolio.
TVC:SA40Education
by Timonrosso
1
May the Fourth Be With You - And your Stop losses!Star Wars has been around since 1977 which was written and directed by George Lucas. During that time, there have been phenomenal quotes, lessons and adventures that have been shared. Instead of telling you different lessons Star Wars can teach you about trading. How about I share some quotes and how you can apply them? Here are the ones I find are the most applicable. #1: "I find your lack of faith disturbing." Use this as a reminder to stay confident in your trades, even when the market is unpredictable. Have faith in your strategy. Have faith in your commitment. Have faith in your strong mindset. #2: "Your focus determines your reality." Stay focused on your trading goals and strategy. It’s not about what others see. It’s not about what others feel. It’s about you in your own work station, planning, preparing and executing accordingly. #3: "Do or do not, there is no try." Commit fully to your trades, rather than hesitating or second-guessing. When it’s lined up, ACTION. When you see a trade setups, write them down and prepare for execution. Don’t try… DO! #4: "Fear is the path to the dark side." Stay level-headed and not let fear or panic drive your trading decisions. Fear doesn’t exist. Only danger does. We are fearful most times in our head when there is no apparent danger. Remember this when you feel fear. #5: "In my experience, there's no such thing as luck." Successful trading is based on skill, probabilities and strategy, not luck. #"6: The Force will be with you, always." Here’s a reminder that your skills and strategy will guide you through both good and bad trading times. In this case the force is your proven strategy, your will, your commitment and your strong mind. #7: "You must unlearn what you have learned." Be open-minded and flexible when it comes to adapting your trading strategy. We learn as sheeple to buy low sell high. While I have gone against the idea and instead BUY HIGH, SELL HIGHER. Also, when everyone buys, is normally where the Smart Money offloads theirs. And when retail dumb money sells, that’s where Smart money BUYS. Did you find these useful? Which one resonated the most with you?
TVC:SA40Education
by Timonrosso
13
RISK less with Drawdowns and more with Winning StreaksA drawdown is a period of decline in the value of a portfolio. This is where you take a number of trades, and the losses drop the portfolio at a marginal level (if you know what you’re doing). During these times, the market is typically more volatile (jumpy) and unpredictable. And so you have a higher chance to risk money in unfavourable times. Risk less with drawdowns When your portfolio drops 6%, 8% or even 11% – This is where you’re not sure when the market will become more favourable. This is the time where you decide to risk less money per trade. You would drop the risk from 3%, 2% to 1.5% or even 1%. Then keep trading until the markets pick up and start to favour your portfolio… Once you’re out of the drawdown then… Risk more money with the winning streak During the winning streaks, the market is typically more stable and predictable, and the chances of making a profit are higher. You can then pump up the risk back to 2% or 3% (if you’re a risky biscuit). When do you do this? When your portfolio is either BACK to an all-time-high. Or when you can see the market has broken out of the sideways consolidation and volatile period. Risk management is an important aspect of successful investing, and adjusting the amount of money being invested based on market conditions is one strategy that can help investors achieve their financial goals. By risking less money during drawdowns and more money during winning streaks, you as the trader can lower your potential losses and maximize your potential gains.
TVC:SA40Education
by Timonrosso