How to Maximize Your Trading Profits with ONE Small Change

Summary

In this trading lecture, Jared Wesley discusses the concept of 'add and reduce' as a strategy to accelerate profits in trading. He emphasizes the importance of not overcomplicating the trading process and highlights the psychological aspects of trading, such as fear and greed. Wesley uses various examples to illustrate how adding to a winning position can increase profits without increasing risk, provided the trade setup is strong and the market is trending. He also cautions against the pitfalls of tight stop losses and the need for consistency in applying trading strategies. The lecture aims to help traders become better by understanding and implementing the add and reduce technique effectively.

Takeaways

• 📈 Embrace simplicity in trading; many traders overcomplicate the process.
• 🔍 Focus on your strengths and minimize weaknesses to become a better trader.
• 🚫 Avoid letting one mistake overshadow the good things you're doing in your trading strategy.
• 📊 Understand the concept of adding and reducing shares to maximize profits without increasing risk.
• 💡 Use proper risk management to ensure you don't exceed your maximum risk threshold.
• 📉 Recognize that trading is forgiving due to constant opportunities, but also unforgiving due to the high cost of mistakes.
• 🔄 Adding shares can lower your average entry price and increase your stop loss, reducing the risk on the trade.
• 🔄 Reducing shares or raising the stop loss can help lock in profits and reduce risk after an initial gain.
• 📌 Be cautious with tight stop losses; they can lead to frequent stops and potential slippage issues.
• 📝 Always follow your trading plan and avoid making adjustments in real-time that could negatively impact your profitability.
• 📈 The 'add and reduce' strategy can significantly accelerate profits, but it requires discipline and understanding of market trends.

Q & A

What is the main topic of Jared Wesley's lecture?

The main topic of Jared Wesley's lecture is how to maximize trading profits with one small change in trading strategy.

What does Jared emphasize as a common mistake among traders?

Jared emphasizes that a common mistake among traders is overcomplicating the trading process and letting one issue ruin all the good things they are doing.

What is the importance of understanding your game in trading, according to Jared?

Understanding your game in trading is important because it helps traders focus on their strengths, minimize their weaknesses, and avoid making costly mistakes.

How does Jared suggest traders can accelerate their profits?

Jared suggests that traders can accelerate their profits by adding to their positions strategically without increasing their risk, a concept known as 'add and reduce'.

What is the significance of the 'add and reduce' strategy in trading?

The 'add and reduce' strategy allows traders to increase their potential profits without increasing their risk, by adding more shares to a winning trade and adjusting the stop loss accordingly.

What is the psychological aspect of trading that Jared briefly mentions?

The psychological aspect of trading involves the mental challenges and emotional barriers that traders face, such as fear of taking the same stock twice in a day or being overly greedy after a win.

Why does Jared stress the importance of not deviating from your trading plan?

Jared stresses the importance of not deviating from your trading plan because it is designed to help you be profitable and productive. Deviating from it in real-time can hurt your odds and lead to unnecessary mistakes.

What is the 84% rule that Jared refers to in the context of trading?

The 84% rule is not explicitly defined in the transcript, but it likely refers to a guideline or principle that Jared uses to determine when to add to a trade or adjust his strategy, based on his experience and trading plan.

How does Jared address the issue of slippage in trading?

Jared addresses slippage by advising traders to be aware of its impact, especially when using tight stop losses. He suggests that traders should consider the potential for slippage when setting their stop losses to avoid being stopped out prematurely.

What advice does Jared give to new traders regarding the 'add and reduce' strategy?

Jared advises new traders that the 'add and reduce' strategy is a higher-level concept that may be challenging to master initially. He suggests that new traders should focus on taking good trades consistently before attempting to implement more complex strategies like 'add and reduce'.