Stop Being an A$$HOLE...Learn How to Trade Your Plan & Trust The Odds!

Summary

In this engaging lecture, Jared Wesley emphasizes the importance of sticking to your trading plan and trusting the odds in the unpredictable world of trading. He shares personal experiences, both positive and negative, to illustrate the common pitfalls traders face, such as the temptation to deviate from a proven strategy or the challenge of dealing with statistical anomalies and the emotional rollercoaster of losses and wins. Wesley stresses the need for objectivity, consistency, and a long-term perspective, encouraging traders to focus on what they can control and to embrace the inevitable ups and downs of the trading journey.

Takeaways

• 📈 Trading requires a plan and trust in the odds, as the odds in trading are very slim.
• 🔄 New traders often struggle with their trading plan, but as they progress, they should refine it to ensure profitability.
• 🎲 Comparing trading to gambling, like Blackjack, highlights the importance of a small edge and not messing with it.
• 🔍 Objectivity is crucial in trading; traders must be honest with themselves about their performance and strategies.
• 📊 Keeping a trading journal and tracking trades is essential for understanding one's strengths and weaknesses.
• 🚫 Avoid making unnecessary changes to your trading plan based on emotions or short-term outcomes.
• 📉 There are many ways to lose in trading, and it's important to accept that losses are part of the process.
• 🌟 Good trades can sometimes result in losses, and traders must learn to differentiate between good and bad trades.
• 🔄 Statistical anomalies and anticipation stops can occur, but they should not deter traders from sticking to their plan.
• 🔄 Consistency in following a trading plan is key to long-term success, despite inevitable frustrations and losses.
• 💡 Focus on what you can control in trading, and accept that some elements are outside of your control.

Q & A

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

The main theme of Jared Wesley's lecture is 'Trade Your Plan and Trust the Odds,' emphasizing the importance of having a trading plan, sticking to it, and understanding the statistical nature of trading.

Why does Jared compare trading to gambling, specifically Blackjack?

Jared compares trading to gambling, specifically Blackjack, to illustrate the concept of having a small edge and the importance of not messing with that edge, as it can negatively impact the expectancy and overall success in trading.

What does Jared mean by 'reversion to the mean' in the context of trading?

In the context of trading, 'reversion to the mean' refers to the statistical phenomenon where extreme outcomes (like a series of winning or losing trades) are likely to be followed by outcomes that are closer to the average or mean, emphasizing the importance of objectivity and understanding that both luck and skill play a role in trading outcomes.

What is the significance of objectivity in trading, according to Jared Wesley?

Objectivity in trading is crucial because it allows traders to assess their performance honestly, identify areas for improvement, and avoid making unnecessary changes to their trading plan based on emotions or false assumptions.

Why does Jared emphasize the importance of tracking and journaling trades?

Jared emphasizes tracking and journaling trades because it helps traders to be honest with themselves about their performance, identify patterns and strategies that work or don't work, and make informed decisions about their trading approach.

What does Jared mean by 'trade your plan and trust the odds'?

By 'trade your plan and trust the odds,' Jared means that traders should stick to their well-thought-out trading plan, execute trades as planned, and understand that there will be both winning and losing trades. The key is to trust the long-term statistical outcomes rather than getting caught up in short-term fluctuations.

What is an 'anticipation stop' in trading, as mentioned by Jared?

An 'anticipation stop' is a strategy where a trader places an order a few pennies before the actual entry price to try to get into a trade early. However, this can sometimes result in being stopped out if the actual pattern does not trigger, leading to a loss.

Why does Jared warn against changing your trading plan based on a few bad trades or statistical anomalies?

Jared warns against this because making random changes to the trading plan without a solid statistical basis can lead to a process killer, where traders chase their tail and deviate from a proven process, ultimately harming their long-term success.

What is the importance of understanding that there are many ways to lose and few ways to win in trading?

Understanding this concept helps traders to maintain a realistic perspective, focus on the quality of their trades, and not be discouraged by inevitable losses. It encourages traders to find and stick to the few winning strategies that have a higher probability of success.

How does Jared suggest traders should handle the inevitable ups and downs of trading?

Jared suggests that traders should expect ups and downs as part of the trading process, similar to living in a sunny state and being prepared for the occasional rain. The key is to stay consistent with the trading plan, focus on what can be controlled, and not let emotions dictate trading decisions.