8 Controversial Trading Beliefs After 8 Years of Trading

Summary

In this unfiltered and controversial video, a seasoned trader reveals 8 bold beliefs that challenge common trading wisdom. From critiquing backtesting as a waste of time to warning against Forex gurus with neck tattoos, the video calls out misconceptions in the trading world. It highlights the importance of discipline over complicated strategies and emphasizes that emotional control and proper risk management are key to success. The speaker shares personal experiences, offering insights on how to improve trading without the reliance on outdated methods or unnecessary steps.

Takeaways

• 😀 Backtesting is a waste of time for experienced traders and does not guarantee improved trading results. It can even hinder progress due to procrastination disguised as productivity.
• 😀 Avoid Forex influencers who flaunt neck tattoos, Lamborghinis, and chains as they are often associated with scams or dishonesty in the trading world.
• 😀 Demo trading is ineffective beyond the first 6 months of trading, as it does not help develop real trader psychology or the ability to manage actual risk. It's better to have 'skin in the game' even with small personal capital or prop firm challenges.
• 😀 Turning small amounts of money into large sums (e.g., $1,000 into six figures) is a sign of either lying, scamming, or gambling, and should be avoided as it is not sustainable trading.
• 😀 Most traders don’t get better with time; they tend to overcomplicate their strategies and lose the simplicity that initially brought them success.
• 😀 Full-time trading is overrated. It may seem liberating at first but often becomes boring and stressful when it relies entirely on trading income. Use downtime to make more money outside of trading.
• 😀 You don’t need to be a great trader to make great money. Discipline is more important than skill in trading, and simplicity in strategy is key to consistency and success.
• 😀 If your heart races when you’re in a trade, you’re gambling, not trading. Effective traders focus on the long-term, manage risk, and don't stress over individual trades.
• 😀 The idea that you must journal every trade to learn from it is misleading. Losing a trade is just part of the game, and there's no need to overanalyze every result.
• 😀 Risk management is crucial to trading. Never risk more than 1-2% of your account on a single trade, and always focus on the next 100 trades rather than getting emotionally invested in a single loss or win.

Q & A

Why does the speaker believe backtesting is a waste of time in trading?

The speaker argues that backtesting is ineffective because, unlike activities like golfing or learning a language, trading does not guarantee improvement through repetitive practice. They suggest that trading is more about psychological factors like emotional control and execution, which aren't improved through backtesting.

What is the speaker's opinion on Forex gurus with neck tattoos?

The speaker suggests avoiding Forex influencers with neck tattoos, as they often embody the stereotypical image of flashy, superficial Forex traders who might be more focused on appearances and materialism rather than providing genuine, valuable trading education.

Why does the speaker think demo trading is a waste of time after six months?

Demo trading is seen as ineffective after six months because it doesn't involve real risk, which is crucial for developing trader psychology. Without real money on the line, a trader cannot truly test their emotional control and execution under pressure, which are vital aspects of successful trading.

What does the speaker recommend instead of demo trading?

The speaker recommends putting a small amount of real money into a trading account or opting for a prop firm challenge. This way, traders can gain real experience with risk management and emotional control, both of which are critical for long-term success.

Why does the speaker caution against believing claims of turning small amounts into large sums of money?

The speaker believes that claims of turning small amounts of money into large sums are likely scams or the result of gambling. They advise avoiding individuals who make such claims, as these stories are often fabricated, and such practices don't represent true trading.

How does the speaker explain why beginner traders might do better than experienced ones?

Beginner traders often do better because they keep their trading strategies simple, whereas more experienced traders tend to overcomplicate their approaches, which leads to confusion and less effective execution. The speaker believes that simplicity is the key to successful trading.

What is the speaker's view on full-time trading?

The speaker finds full-time trading overrated because it can become boring and stressful. They believe that relying solely on trading for income can hinder performance due to financial pressure and that using trading as a means to supplement other income sources may be a better approach.

What does the speaker mean by saying you don't need to be a great trader to make great money?

The speaker suggests that having great discipline is more important than being a technically skilled trader. A simple strategy executed consistently with discipline can be more profitable than a complex one, which many traders fail to master due to a lack of focus and emotional control.

Why does the speaker believe risking more than 5% in a single trade is dangerous?

The speaker emphasizes that risking more than 5% per trade can lead to high stress and emotional reactions, which are characteristic of gambling rather than trading. Consistent risk management is necessary to avoid such emotional volatility and to approach trading with a mindset focused on long-term success.

What does the speaker mean by focusing on the next 100 trades instead of a single trade?

The speaker advocates for a long-term mindset in trading, where the focus is on the overall performance over time rather than the outcome of individual trades. By managing risk and staying disciplined, traders can weather losses without becoming overly attached to each trade, which is essential for sustainable success.