I am a professional trader… below you shall find everything you need to know. All knowledge gathered in past 20 years…
I’m professional trader because long time ago I have chosen to become one.
I have been beating this craft for over full decade now, and do you know what?
It’s the greatest business there is! I mean where else you can make money while looking at some zigs zags on your computer screen.
I am a trader for some time now, and it almost killed me.
I made money by making profits on my own accounts, with my own cash.
My main day trading system i have used before where breakouts. I have been searching for specific patterns forming (example triangles or wedges on weekly and daily — trade on 1min or 2min candles; strict attention to psychological price levels on charts) and executed my trades following 10 simple rules:
‘The Art of War / The Art of Trading’ by Dominik Stone
Rule Number 1:
Always wait for the setup: No Setup-No Trade
Easy, follow strictly designed plan of rules for entering any markets
Rule Number 2:
THE BEST trades work almost right away
Best placed trades, at correct prices, will simply accelerate in right direction
Rule Number 3:
Never take a big loss. If it doesn’t ‘feel’ right. Remove it!
Never allow losses to grow, cut them short if trade goes against you
Rule Number 4:
Always perfect your craft and sharpen your skills
Study, learn, search, practice — always
Rule Number 5:
Be patient with winning trades: Impatient with sketchy trades
Run winners and cut losers quick
Rule Number 6:
DISCIPLINE to follow your plan is the key to winning in trading
Follow your plan, always, never deviate
Rule Number 7:
Never get emotionally attached to trades
Emotions are in every trade, plan sizes correctly and stay detached
Rule Number 8:
Always trade with the size that makes you unemotional
If you can’t sleep at night your trade size is to large
Rule Number 9:
Keeps things very simple and don’t over-think your trading methods
Simplicity is the key, don’t overcomplicate your trading rules
Rule Number 10:
Stay humble at all times
Always… Psychology is everything.
Now, I do not day trade anymore, I am investing. There is a massive difference.
The biggest obstacle / drawback I had to handle and recover was 30% loss…
Long time ago.
I learned about trading but I also learned a lot about myself and what I was good at, what I was horrible at, and what I was psychotic at — things that had nothing to do with day trading. Day trading is the best job in the world on the days you make money. You make a trade, then maybe 20 minutes later you are out of the trade with a profit, and for the rest of the day you think about how much money you made.
It’s the worst job in the world on a bad day. I would make a trade, it would go against me, and then I wanted my heart to stop so my blood would stop thumping so loudly. I am now unemployable in every other way.
Here’s what I learned. All of these lessons I will certainly use today, and many years after will stop trading.
You can’t predict the future.
Everyone thinks they can. But they can’t. This applies not just to trading but everything. You could be in relationship or married for 11 years and the next thing you know — you are splitting or divorced and you would not have predicted that.
You could be healthy all your life and drink your vegetables and exercise and reduce stress and a year later you could be dead from cancer. Trust me when I say- much less stress, if you let go of trying to predict the future. You can always seek to increase the odds in your favour — if I don’t jump off bridges, for instance, it’s more likely I’ll be alive a year from now — but certainly a path to unhappiness is thinking the future can be predicted and controlled.
Hope is not a strategy.
If you get to the point where you “hope” you don’t get ruined, then you did something wrong beforehand. For instance, if you plan a wedding outside and you don’t have a backup plan in case it rains, then you probably miss-planned you’re wedding, unless you are getting married in a desert. “Hoping” is not a bad thing.
I hope that every day my life goes perfectly. But if hoping is the only thing I’m relying on, then it means I didn’t really look at all the possible outcomes of something that was important to me.
Uncertainty is your best friend.
100% of opportunities in life are created because people are uncertain about almost everything in their lives. We are constantly trying to close the enormous gap between the things we are certain about and the things we are uncertain about and almost every invention, product, Internet service, book, whatever has been created to help us closes that gap. Sometimes this is hard.
If your girlfriend or wife betrays and leaves you, you often feel like crawling on the floor and burning all the self-help books. They all lied. It’s hard to feel “in the now” or to “positive think” when life feels like it’s over. I’ve tried. It’s really hard. But at the very very least you can say…”help me”. You can say it to your close friends. You can say it to something inside of yourself. “Help me” is the most powerful, and most forgotten, prayer.
Taking risks versus reducing risk.
Some people take too many risks and they go bankrupt. This happened to me. And sometimes people are too cautious and don’t take enough risks. When I first started day trading I was so afraid of risk that if I had a small profit, I’d end the trade.
But then I would take big losses and that would wipe out all my profits. The key is that you can take larger and larger risks if you work on better and better ways to deal with those risks. For instance, I might be able to risk marrying someone if I know she is not a hard-core drug addict who regularly betrays the people she is close to.
I can risk driving without a license if I always stay below the speed limit (I know this is a stupid risk, but still…). Once you have a method of reducing risks, it’s easier to make trades or decisions about anything.
Often I get emails, “I really want ONE job but they don’t seem to want me and now I’m miserable. How can I get that job?” Well… you can’t. And you’re going to be unhappy. You can’t wish yourself a job. When I wanted to get a girlfriend I went on lots of dates. My friend approach was even smarter — she wouldn’t waste time with dinners. She would only go to tea with guys. Within the first 20 seconds you know if you are attracted. So keep it to a tea.
In trading, if something is not working out, even if your heart wants it to work out, you have to say “No” and cut your losses. If a business relationship is not working out, don’t put more energy and time into it. We think because we’ve already put time and energy (or money) into something that we have to stick with it.
But this is just a mental bullshit. Say no to it. You have to decide every moment if this is the situation you want to be in. Just because you were in the situation a moment ago, or yesterday, or for 10 years, doesn’t mean the situation is right for you anymore.
Trading pulls everything out of you. It sucks the soul out of your body, blends it up, and then explodes. It doesn’t turn into a nice smoothie. It explodes. So you have to take care of yourself. If you don’t sleep enough, if you don’t eat well, exercise, be around positive people, be grateful for what you have blah blah blah you will lose all of your money and go bankrupt. And obviously, this applies to everything else in life. Every day, what small thing can you do to become a slightly better you?
The reason we get so attracted to “safe” jobs is that the pain is more subtle and sneaks up on us. The only way to survive is to laugh. There’s that saying: “men make plans but god laughs.” Well, you might as well be on the same side as god.
“This is crazy” means you’re crazy.
I’ve seen it a million times. Guy makes a trade. The market goes against him. He says “this is crazy” and puts more money into the trade. And then he loses all his money and goes crazy. The market is never crazy. The world is never crazy.
It doesn’t matter if a trade (or a day, or a life) is good or bad.
Good and bad days happen. But life is about a billion little moments that add up to all the things around you. If you let one of those moments have too much control then you are bound to be mostly miserable.
It’s never about the money, game maybe
I get emails like, “can you show me how to day trade?” “NO!” I know 100 day traders and only two that won’t go bankrupt. So what makes anyone think they will have an edge? How many people listen to me? About 0.
How come? Because people are sick of their lives, their relationships, their jobs, and all the lies that have been told to them ever since they learned how to walk.
They want freedom from the BS. I get it. Trading is the dream. You can make enough money to not care. To do it from anywhere. To be happy. It won’t work. But people don’t want to believe it. Most people think they have that one special something that will make it work for them. And it’s true — they do have that one special something.
But you can’t get there by day trading first. You can skip right to the being happy part. You can skip right to being free. But we never learned that. OK, go do it. Then cry about it. Then get scared. Then curse. Then cry more. None of that will make you happy. Then read this part again. Work… you have to put relentless everyday work into this craft.
And trust me when I say, lots and lots of it…