The Only Day Trading Strategy I Would Use If I Started Over
Summary
TLDRThe speaker emphasizes the importance of developing a personalized trading strategy rather than copying others. He suggests that every trader should adapt concepts like ICT, smart money, supply and demand, or order flow to their unique style. The key to success lies in consistent journaling to collect data and refine one's approach. Risk management is highlighted as the most crucial aspect, often more important than the trading strategy itself, as it ensures longevity in the market and allows traders to learn from losses.
Takeaways
- 😀 Every trader must develop a unique trading strategy that aligns with their personal style and approach.
- 🔍 It's important not to copy a trading strategy entirely but to adapt and make it unique to one's own personality and risk management parameters.
- 📈 Traders should not give up on a strategy after a few trades; persistence is key, and a significant amount of trades are needed to evaluate a strategy's effectiveness.
- 📊 Journaling and maintaining a physical database of trades is crucial for understanding patterns, emotions, and decision-making processes in trading.
- 💡 Data collection and analysis are essential for developing an edge in trading, as they provide concrete evidence to learn from and improve upon.
- 🏗️ Journaling is likened to building a foundation for a house; it's the base upon which a trader's edge is built through trial and error.
- 🚫 Avoiding generic approaches is vital, as uniqueness in trading strategies is what gives them value and sets them apart from the crowd.
- 💼 Risk management is paramount, with the speaker suggesting it might be even more important than the trading strategy itself.
- 💰 Proper risk management allows traders to afford losses and still come out profitable, as long as the wins outweigh the losses.
- 🤔 Traders should view losing trades as learning opportunities and business expenses, integral to the trading journey.
- 🎯 The speaker emphasizes that being in the trading business is not about being correct all the time but about managing risk effectively for long-term success.
Q & A
What is the main focus of the video script?
-The main focus of the video script is to discuss the importance of developing a unique trading strategy and the role of risk management in successful trading.
Why is it important for traders to develop a unique approach to their trading style?
-It is important for traders to develop a unique approach because every individual is different, and a personalized strategy can better fit their personality, risk tolerance, and trading goals.
What does the speaker mean by 'Carmine Rosado strategy'?
-The 'Carmine Rosado strategy' refers to the speaker's own personalized trading strategy, which he emphasizes is unique to him and not a generic approach that can be simply copied from others.
Why do traders often fail when they try to copy and paste a trading strategy?
-Traders often fail when copying strategies because they might not consider their own risk management parameters, emotional intelligence, and personal trading style, which are crucial for the success of any strategy.
What is the speaker's view on the role of risk management in trading?
-The speaker views risk management as the most important aspect of trading, even more critical than the trading strategy itself, as it helps protect traders from significant losses and ensures longevity in the market.
How does the speaker recommend traders develop their trading edge?
-The speaker recommends traders develop their edge by sticking with a strategy for a significant amount of time, journaling their trades, and collecting data to analyze and refine their approach.
What is the significance of journaling in the process of developing a trading strategy?
-Journaling is significant as it provides a concrete database of trades that traders can refer back to, helping them understand their strengths, weaknesses, and emotional responses to different market conditions.
Why is it necessary for traders to have a solid foundation in their trading strategy?
-A solid foundation in a trading strategy is necessary because it forms the basis for consistent and repeatable trading decisions, which is crucial for long-term success in the market.
How does the speaker define success in trading?
-The speaker defines success in trading as being able to manage risk effectively, learn from losses, and ultimately achieve profitability even when facing a lower win rate.
What is the speaker's advice for traders who are struggling with a low win rate?
-The speaker advises traders to focus on managing their average losses compared to their wins, emphasizing that it's possible to be profitable even with a lower win rate if risk management is properly implemented.
Outlines
📈 Developing a Personal Trading Strategy
The speaker emphasizes the importance of developing a unique trading strategy that suits an individual's personality and style. They discuss the common mistake of traders trying to copy strategies without adapting them to their own needs. The speaker shares their belief that any strategy can be profitable if tailored to the trader's approach, highlighting the uniqueness of each person's trading fingerprint. They also stress the need for traders to look beyond generic strategies and to develop their own specific approach, which includes learning from others but making it their own.
📊 The Importance of Consistent Data Collection and Journaling
This paragraph focuses on the necessity of sticking with a trading strategy long enough to gather meaningful data, suggesting a minimum of one to three months. The speaker advocates for maintaining a physical database of trades, which can be in the form of written journals, screenshots, or digital platforms. They argue that data is crucial for understanding patterns, emotional responses, and the effectiveness of trading setups. The speaker likens journaling to building a solid foundation for a house, essential for developing an edge in trading and learning from both winning and losing trades through proper risk management.
🛡️ Risk Management as the Cornerstone of Successful Trading
The speaker discusses the paramount importance of risk management in trading, positioning it as more critical than the trading strategy itself. They argue that even with a well-developed edge, without proper risk management, a trader's account could be quickly depleted. The speaker shares their perspective that risk management might constitute 51% of successful trading, with the trading strategy making up the remaining 49%. They highlight the need to be comfortable with losing trades as part of the business and to view them as learning opportunities, provided risk is managed effectively. The speaker concludes by encouraging traders to focus on risk management to ensure longevity in the trading game.
Mindmap
Keywords
💡Trading Strategy
💡ICT (Institutional Cluster Theory)
💡Supply and Demand
💡Order Flow
💡Price Action
💡Unique Approach
💡Risk Management
💡Journaling
💡Edge
💡Generic Approach
💡Emotional Intelligence
Highlights
The best trading strategy is one that is unique to the individual trader.
Every trader must develop their own approach to trading, similar to a fingerprint.
Traders often fail by trying to copy and paste strategies without making them unique to themselves.
Carmine Rosado emphasizes the importance of making a strategy your own, rather than just copying others.
Many traders give up on strategies like order flow or smart money concepts too quickly without understanding why they fail.
A unique approach to trading involves looking for specific things that not many people look for.
Value in trading comes from uniqueness, not from generic strategies.
Carmine Rosado's strategy is a combination of supply and demand with order flow, tailored to his personality.
Traders should not try to copy strategies entirely but adapt them to fit their own trading style.
Risk management is crucial and should be a part of every trader's strategy.
Journaling trades is essential for developing an edge and understanding one's trading patterns.
Data collection through journaling helps in identifying the best and worst times for trading.
Physical evidence of trades is necessary for analyzing and improving trading strategies.
Journaling helps in making subconscious trading patterns conscious, leading to better decision-making.
Risk management is more important than the trading strategy itself in ensuring longevity in trading.
Proper risk management allows traders to afford being incorrect more often than being correct.
Carmine Rosado views losing trades as wins if something is learned from them and risk is managed.
Risk management is the foundation of a trading strategy, similar to the foundation of a house.
Carmine Rosado emphasizes that he is in the business of managing risk, not just trading.
Transcripts
what do you think the best trading
strategy is is it ICT smart money
Concepts supply and demand order flow
price action Fibonacci what's the best
strategy and what strategy do you use in
this video I want to explain in a raw
unedited unscripted way of what I find
to be the best trading strategy and the
strategy that you all need to implement
into your own trading to see a major
difference so the first thing that I
really want to dive deep into is
regardless of the trading strategy that
you use every individual Trader must
develop a unique approach to their own
style the way I look at the traders in
the stock market is we are all unique in
the sense of we are like the
fingerprints on our hand right like my
fingerprint will look similar to yours
but my fingerprint will identify me as
Carmine rosado in the same the same
approach of the stock market you're
going to have traders that Implement
different strategies ICT Fibonacci
support resistance right and what a lot
of Traders do is they try to copy and
paste a strategy in its entirety out of
everybody that I know on Wall Street out
of everybody that I know personally even
including myself we've all developed a
strategy like we've we've learned it
somewhere right like you've learned ICT
you've learned orderflow you've learned
support and resistance you've learned
different spreads right you've you've
implemented other strategies but you've
made it unique to yourself so the way I
look at it is if you trade orderflow if
I trade uh Supply demand combined with
orderflow I don't look at it as I trade
Supply demand and orderflow I look at it
as I trade Carmine Rosado strategy what
a lot of Traders do is they try to trade
orderflow and it doesn't work out for
them after one trade or two trades and
they give up on the concept of orderflow
or they try smart money Concepts they
try it for a week maybe they had one or
two good winning trades and then the
rest were all losing traits but then
they give it up without trying to debunk
what was going wrong and without trying
to scale it up because they made the
mistake of using it in a very generic
approach what I recommend everybody and
even including myself like if you go
back and look at all my setups it's very
unique and I look for specific things
that not a lot of people look for and
that's the goal with trading is
developing a unique approach and not
being so generic a lot of Traders now
with days and you know I was victim to
this when I first started out trading
was I was looking for generic ways to
make money and anything worth wild
you're not going to find being generic
things that are very valuable you could
look at homes being over a million
dollars you could look at artwork right
cars anything that's super valuable is
not going to be generic it's going to be
very unique because that uniqueness is
what gives that item or the uniqueness
is what gives that trading Str strategy
it's value so if you learn
hypothetically speaking ICT or orderflow
or Supply Demand right don't try to copy
the rules entirety of whoever the guy
you just watched on YouTube was saying
to do you need to develop it unique to
your own approach which fits your
personality so I'm a firm believer that
you can make money with any single
trading strategy it's not the strategy
it's the trader so what you have to do
and this is what I recommend if I had to
go back and start over was I would have
it in the back of my mind that I need to
develop a unique strategy influenced by
other things that I have learned so
let's say you go and you learn how to
use supply and demand combined with
orderflow which is exactly how I treat
right I'm going to learn from Carmine
Rosado but I know Carmine Rosado has a
unique personality and he's going to
treade a little differently than I trade
right it's not copying carine and Rosado
it's not copying supply and demand and
orderflow in its entirety it's
developing his Concepts and adapting it
to your own trading right like if you
copy somebody if I go on Wall Street and
copy somebody's trades or copy exactly
why he buys and sells without putting an
influence on risk management he might be
the guy that makes money and I might be
the guy that loses money why is that we
all have different personalities and we
all have this different riskmanagement
parameters so that's why trying to copy
and paste will never work out because
not only do you you can't copy and paste
emotional intelligence but you can't
copy and paste risk parameters the guy
on Wall Street might have a 50,000 or
$50 million account he's trading with
versus you you might be trading on A1
th000 account right so you have to
compensate for emotions and you have to
compensate for risk management which is
why copy and paste trading will never
work out and this is why making the
strategy unique to you based off of your
own unique self the fingerprint on your
hand is going to be different than mine
but they're going to be similar in a way
that we could take influences and make
them uh similar in the way that we can
conform it to our own self and our own
rules now how to develop this Edge
number one is stick with the strategy
for at least in my opinion you need a a
numerous amount of Trades you can't do
it for a day and give up on a strategy
because you took a losing trade on it
right you can't supply and demand or
order flow for 3 days have one winning
trade and three other losing trades and
give up on it because you took losses
right every strategy is going to have a
loss what I recommend everybody to do is
have at least a minimum of one to three
months on a minimum of collecting data
with a strategy right how are we going
to collect data number one we need to
journal hour trades we need to have a
physical database we need to have
concrete evidence whether it's writing
on paper
whether it's taking screenshots on our
phone whether it's using a journaling
platform on a computer we need to have a
physical database that we can go back
and reference to and say okay at 9:30 to
10:00 Eastern that's when I take the
worst trades and when 11:00 to noon
comes I'm trading better in the
afternoon right we'll be able to dissect
what not only the time the type of setup
how our emotions were but we're just
going to have a physical database that
we can go back and reference to
you cannot deny data data does not lie
so if you're using a strategy for maybe
a month right and you have a 5% uh win
rate okay so now we have to look back at
is it the strategy or is it my emotions
what is it right and the only real way
that we're going to be able to narrow it
down is if we have physical evidence in
front of our faces people try to skip
this step and Traders try to try to
avoid the whole journaling aspect and
they think that they'll just be able to
figure it out in their head they there's
so many things that get processed on a
subconscious level and by having a
journal or having things in front of you
will'll put subconscious Concepts on a
conscious level and us being able to
read subconscious things consciously
will enable us to figure out what's not
working what to stop doing more of and
what to start doing a lot more of and
scaling it up so besides journaling this
is how you develop your Edge right you
cannot develop your Edge you can't build
a house with without a solid foundation
a house what first gets built when you
build a new home is the foundation right
then you build everything around it you
you frame the house you do the siding
you do the roof right you do everything
inside but most importantly the first
thing that gets done is the foundation
of the house and look at journaling or
look at collecting data as the
foundation and an edge or a house cannot
be built without a strong foundation and
the foundation to your trading is a
solid strategy that you can go back and
repeat consistently on a daily basis and
the only way we can do this is through
journaling and being conscious of our
subconscious actions and our
subconscious thoughts it's all about
putting the conscious together and this
is how we develop our Edge through trial
and error through screen time through
having losing trades and learning from
those losses the best trades you're
going to ever take in your journey
especially when you're beginning and and
trying to build a system the best trades
you will ever take are your losing ones
so when you lose you need to implement
proper risk management that way you
could absorb the losses and be okay with
losing yet still take a lesson out of it
I made a video on this before about how
I win 100% of the time and it's not
clickbait it's not me lying like you can
win 100% of the time if you take a
losing trade and you take something out
of it while you are managing your risk I
may not profit all the time I may not
take money out of the market 100% of the
time but I look at losing trades as wins
if I learn something and I take
something out of it and the only way we
can do that is implementing proper risk
management so risk management and Edge
development are kind of synonymous
because if you don't Implement proper
risk
management while you're developing and
building your Edge then that's when
you're going to deplete your account
faster and it's just going to be just a
slow burn or a big cut a small cut that
turns into a bigger cut uh so risk
management and Edge building are
synonymous that when you're building
your edges and when you're building your
system you need to implement proper risk
management that way you can collect a
database of 50 trades 100 trades that
way when you do lose you're not losing a
lot because you're implementing that
proper risk management system so
regardless of trading strategy
regardless of building your Edge risk
management in my opinion especially once
the edge is built is the most important
trading strategy that you could use it's
not Carmine Rosado strategy it's not
order it's not supply demand price
action it's your risk management system
because without risk management we're
not Traders we're not in the business to
be correct all the time in fact when
people ask me what do I do for a living
I tell them I'm a risk manager I never
tell them I'm a Trader they say hey
Carmon you know what do you what do you
do for a living I'm a risk manager I'm
in the business to manage risk so not
only developing your Edge you have to
manage your risk but when you have that
edge you also have to manage your risk
because you're going to have those
losing trades there's times where I'll
take three four five losing trades in a
row right but if you implement proper
risk management let's say your losses
are 500 bucks 1,000 bucks if you
implement proper risk management coupled
with a solid trading strategy three
losses five losses are not going to mean
anything compared to one two wins right
and that's why risk management is the
number one important aspect because it
will keep us in this game for longevity
we are in this game to be here for a
while right and the only way we're going
to be here to stay is if we protect
losses when we are incorrect so for me
and a lot of people may disagree with
this and I'm totally up for
discussion I find the risk management to
to be maybe 51% of trading and a trading
strategy being
49% of of successful trading right
strategy is very important but I find
risk management to be a little more
important than a strategy itself now
some might argue with that that if you
don't have a strategy no risk management
will save you and that's correct but the
only way you're going to be able to
develop a trading strategy and learn
through trial and error is actually
having real skin in the game right and
when you don't have a strategy you're
especially going to lose a lot more
right but the only thing that will keep
you there is the risk management and
that's why I've made risk management
51% and trading Edge or building a
system at 49% right I find risk
management to be way more important than
a trading Edge or a trading system and
uh if if you can focus on that whether
you're in the stages of developing an
edge whether you're in the stages of you
have an edge but your losses are a lot
higher um you know we're not in the
business to be correct in fact this
month I have a 45% win rate which people
would look and say hey he has under a
50% win rate you know he he doesn't know
what he's doing but if you look at my
average losses to my average wins my
average losses are nothing compared to
my wins and that's how I like
positioning myself right so regardless
of strategy Supply demand ICT smart
money Concepts if you can Implement
proper risk management you can afford to
be incorrect more than you are correct
yet still come out green and yet still
come out profitable and that's try how
how I try to position myself is I try to
not say that I want to be incorrect but
I don't mind losing anymore and I've
accepted it because I know it's a
business expense I know it's a part of
the game but I'm not fearful of of
taking a setup that I lose out on
because I know my next winning trade
will completely outweigh two or three
losing trades if I Implement proper risk
management um so that's pretty much all
I have if you have any questions if you
have any comments let me know down below
if you got any value out of this
subscribe to my channel and uh I will
see you all in the next one
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