Why Most Traders Lose (Entry Confirmation Guide)

Summary

In this video, the speaker shares valuable lessons learned from years of trading, emphasizing the importance of patience and observation over prediction. He describes how jumping into trades too early, based on incomplete information, led to significant losses early on. The key takeaway is to wait for market confirmation through displacement and structure shifts before entering trades. The speaker highlights the need for traders to focus on the market's true behavior, rather than their own assumptions, and stresses the importance of discipline in waiting for clear setups to improve long-term profitability.

Takeaways

• 😀 Patience is key in trading. Jumping into trades prematurely without proper confirmation leads to unnecessary losses.
• 😀 Shift your mindset from being a predictor of the market to being an observer. Wait for market validation before taking trades.
• 😀 Don't enter trades based on incomplete information. The market will always give you the full picture if you wait for it.
• 😀 Understand the market maker model: liquidity zones and how the market behaves around them are crucial for planning entries.
• 😀 Displacement and fair value gaps are important indicators of market inefficiencies. These gaps often signal future market movements.
• 😀 A market structure shift or break of structure is necessary for confirming that the market is ready to move in your anticipated direction.
• 😀 Avoid the trap of trying to catch the bottom. Instead, wait for confirmation that the market is truly reversing before entering.
• 😀 Don't focus on timeframes matching setups; focus on the price action and displacement that occurs on all timeframes.
• 😀 Market manipulation often happens before distribution, so recognizing manipulation phases can help in timing entries correctly.
• 😀 Successful trading is not about speed but about making well-timed decisions based on complete information.
• 😀 Traders who journal their trades can gain valuable insights into what works and what doesn’t. Review your trades to identify common mistakes.

Q & A

What was the main mistake the trader made during the first years of trading?

He entered trades too early, reacting to price approaching his levels without waiting for confirmation from the market’s actual behavior, which led to losses of around $40,000–$50,000.

What is the key rule that transformed the trader’s performance?

He stopped predicting what the market might do and instead waited to see how the market represented itself before entering trades.

What mindset shift does the trader emphasize as essential for success?

The shift from being a predictor to being an observer—focusing on what the market is actually doing rather than what one expects or wants it to do.

What does the trader mean by 'displacement' in the market?

Displacement refers to a strong price movement that creates a fair value gap (an inefficiency), signaling a validated change in market direction or structure.

Why do many traders get stopped out even when they have the right bias?

Because they enter trades prematurely based on expectations rather than waiting for the market to confirm the move through displacement and structure validation.

What is the relationship between displacement and fair value gaps?

Displacement creates fair value gaps—areas of inefficiency where price moved too quickly to rebalance. These gaps often serve as potential retracement or entry points.

What does the trader suggest looking for before entering a high-probability reversal trade?

He recommends waiting for clear manipulation (liquidity sweep), a valid break of structure or change in state of delivery, and displacement that aligns with the overall market model.

How should traders think about time frames according to the script?

The trader argues that time frame alignment is less important than recognizing price action itself, which looks the same across all time frames—just at different levels of detail.

What is the purpose of waiting for manipulation before entering a trade?

Waiting for manipulation helps confirm that liquidity has been swept and that the market is preparing for a genuine move, reducing the risk of false entries.

What analogy does the trader use to describe premature trading decisions?

He compares it to guessing a Pictionary drawing too early—you think you know what it is before the full picture is drawn, leading to incorrect conclusions.

What does the trader mean by 'change in the state of delivery'?

It refers to a structural shift in price behavior, such as a break of structure or displacement, signaling that market order flow has changed direction.

What are the three stages the trader mentions before a major move?

He describes them as accumulation, manipulation, and distribution—phases where the market builds liquidity, manipulates traders, and then moves in the true direction.

According to the trader, what differentiates successful traders from unsuccessful ones?

Successful traders have the discipline to wait for complete information and confirmation before acting, while unsuccessful traders rush decisions based on emotion or fear of missing out.

How does the trader recommend improving decision-making and trade analysis?

By journaling trades using a tool like Trade Path, reviewing past setups to identify early entries, and understanding how waiting for clarity could have improved results.

What is the trader’s final piece of advice about trading psychology?

He emphasizes that the market rewards patience, not speed, and that traders are paid for the quality of their decisions, not the amount of time spent trading.