Does more trade = more income? Realistic expectations. becoming a risk manager
Summary
TLDRIn this video, the host addresses a common misconception among new traders: that more trades equate to more income. Emphasizing the importance of patience and risk management, the host shares insights from experienced traders who prioritize quality over quantity in trades. Highlighting the pitfalls of overtrading and the necessity of understanding market conditions, the video encourages traders to develop a discerning eye for high-probability setups and to avoid the cycle of revenge trading that often leads to account depletion.
Takeaways
- π Trading more does not necessarily equate to more income; it often leads to more risk and potential losses.
- π§ Beginners often misunderstand the nature of the market and believe that increased trading frequency will lead to higher profits.
- π€ The key to profitability is understanding and practicing patience, waiting for the right trading setups to appear.
- π More trades can lead to a deeper drawdown, making it harder to recover and potentially resulting in more losses.
- π A member from China suggests that more trades could equal more losses, highlighting the risk of overtrading.
- π Risk management is emphasized as a crucial skill for experienced traders, prioritizing safety over the pursuit of profits.
- π« Learning when not to trade is as important as knowing when to trade, which is a skill that comes with experience and discipline.
- π Traders need to develop a good filter to discern high-probability environments from low-probability ones to increase their chances of success.
- π Each trading strategy or pattern has specific conditions under which it performs best; understanding these is vital for effective trading.
- π‘ Being an experienced trader involves looking at the market from a risk perspective and focusing on setups that offer a slight edge in probability.
- π A trader from Hong Kong exemplifies success by securing significant funding through consistent profitability, emphasizing the importance of patience and risk management.
Q & A
Does trading more frequently necessarily lead to more income?
-No, trading more frequently does not necessarily equate to more income. It can lead to more risk and potentially more losses, especially if the trades are not well-considered or are taken in suboptimal market conditions.
What is the common misconception among new traders about trading frequency and income?
-The common misconception is that if they trade more, they will make more money. New traders often believe that higher trading volume directly correlates with higher income without considering the quality of trades and market conditions.
What is the key to becoming a consistently profitable trader according to the video?
-The key to becoming a consistently profitable trader is understanding how to not trade. It involves having the patience and discipline to wait for the right setup and recognizing suboptimal conditions to avoid trading.
What is the importance of risk management in trading?
-Risk management is crucial in trading as it prioritizes the trader's capital preservation. It helps in making informed decisions to avoid unnecessary risks and ensures long-term profitability.
Why is it essential for traders to have a good filter for identifying trading opportunities?
-A good filter helps traders identify high-probability trading opportunities. It prevents them from taking trades in low-probability environments, thus reducing the chances of losses and increasing the overall success rate.
What does the speaker mean by 'trading at key levels'?
-Trading at key levels refers to entering trades at specific price points where there is a higher likelihood of other traders making similar decisions, potentially leading to a decisive price movement in one direction.
How does the speaker define a 'struggling trader'?
-A struggling trader is someone who is caught in a cycle of making money, experiencing heavy drawdowns, blowing their account, and then repeating the same pattern. They often lack proper education and fail to understand when to stop trading.
What is the role of education in avoiding the cycle of a struggling trader?
-Education plays a vital role in breaking the cycle of struggling trading by providing traders with the necessary knowledge and skills to make informed decisions, manage risk, and understand market conditions.
What is the significance of the '1 Percentage Trade Club' mentioned in the video?
-The '1 Percentage Trade Club' is a community where traders discuss and share insights on trading strategies and experiences. It aims to foster a supportive environment for traders to learn and improve their trading skills.
How does the speaker suggest traders should approach trading in a range-bound or choppy market?
-The speaker suggests that traders should be cautious when trading in a range-bound or choppy market, as overtrading in such conditions can lead to losses and a loss of confidence. It's important to identify high-probability setups and avoid trading in suboptimal conditions.
What is the main reason the speaker gives for traders losing money or struggling?
-The main reason given for traders losing money or struggling is not the lack of knowledge on how to trade, but rather the lack of proper education on risk management, trading psychology, and understanding market conditions.
Outlines
π The Misconception of Trading Frequency and Profitability
The speaker addresses a common misconception among new traders that more trades equate to higher income, which is often not the case. They emphasize the importance of patience and waiting for the right trading setup rather than trading frequently. The speaker shares insights from their trade club members, highlighting that more trades can lead to more risks and potential losses. They stress the need for risk management and the ability to discern high-probability trading conditions. The speaker's experience of six years in trading and making over seven figures is used to illustrate the point that profitability comes from knowing when not to trade, rather than constantly seeking new trades.
π The Importance of Realistic Expectations in Trading
In this paragraph, the speaker discusses the importance of having realistic expectations in trading and how many traders struggle due to a lack of proper education. They mention a member from Hong Kong, Horas, who secured significant funding within a month of joining the trade club, illustrating the power of patience and proper trading setups. The speaker explains that successful trading is about understanding the odds and managing risk, rather than hoping for immediate profits. They also touch on the cycle of struggling traders who experience gains and losses, often due to poor risk management and emotional trading. The speaker advocates for ongoing education and sharing of lessons within their trade club to ensure traders are well-informed and can make educated decisions in the market.
Mindmap
Keywords
π‘Risk Management
π‘Beginner Trader
π‘Unrealistic Expectations
π‘Profitability
π‘Patience
π‘Drawdown
π‘Struggling Trader
π‘High Probability Environment
π‘Risk-Reward Ratio
π‘Consistency
π‘Education
Highlights
Trading more does not necessarily equate to more income; beginners often misunderstand the nature of profitability.
Experienced traders agree that more trades lead to more risk, potentially resulting in losses.
Patience is key in trading; waiting for the right setup can be more beneficial than frequent trading.
Being in a deep drawdown can make it harder to recover and highlights the importance of risk management.
New traders often focus on taking more trades without understanding the importance of quality over quantity.
Risk management is prioritized over profit maximization for long-term success in trading.
Knowing when not to trade is a skill that distinguishes consistently profitable traders.
Traders should develop a good filter to identify suboptimal trading conditions and avoid them.
Understanding market conditions such as trending, ranging, or balanced markets is crucial for successful trading.
Each trading strategy or pattern has its optimal conditions for performance.
Overtrading in mid-range markets can lead to losses due to price fluctuations.
A trader's ability to detect high versus low probability environments is essential for success.
Trader Horas from Hong Kong exemplifies success by securing significant funding through disciplined trading.
Controlling the setup and risk management can tip the odds in a trader's favor.
Trading at key levels increases the likelihood of price movements in one direction.
Struggling traders often repeat a cycle of making money, experiencing drawdowns, and revenge trading.
Proper education is vital to break the cycle of struggling and to understand realistic trading expectations.
The speaker emphasizes the importance of ongoing education for traders within their trade club.
Transcripts
hey Traders welcome back to another
video so earlier one of my trade club
members he he asked me hey you does more
trading equals to more income so does
that mean if I trade more means I'll
potentially make more money I know for
majority of beginner Trader especially
if you're new to the market and they're
full of unrealistic expectation they
have yet to know what was an natur in
the
market for those people or if you
watching this you currently at a phase
where you think if I trade more I'll
make more money if I trade at lower time
frame I'll make more
money I believe it is just a
misunderstanding and you have yet to
know what real profitability
is if you look at my my telegram right
now this is a conversation that we had
earlier I actually one of my members ask
me this question so I actually post it
inside my the 1 percentage trade club
and I ask the rest of the member and I
say hey I was having a conversation with
one of our trailers and it brought up a
topic of no trade equals to no income
how do you all think about that and why
is essential to be extremely patient and
wait for the right setup to appear does
more trade equals to more income and if
you look at all the answers right it's
really interesting you see more trade uh
equals to more risk potentially lose
money uh if we are if we taking bad
trades it will lower it will result in
lower probability in the long run
basically just think of a scenario where
you're in a deep draw down and you're
just digging deeper hold for yourself to
climb out of that and then one of our
members from China he said that uh maybe
more trade equal to more losses and my
response to that was very
simple I basically said I believe
majority of experienced Trader would
agree that more trade equals to more
risk and if we hold on
here this is completely the the the
complete opposite of what majority of
new Traders think or struggling Traders
think the struggling Traders they are
they have all of the attention focused
on to how can I take more trade how can
I get involved in the market every
single day how can I strategy hopping to
make sure I find Holy Grail and they
always think oh more risk equals to more
profit not necessarily because you
know the way I look at the market after
six years of trading and after having
made over seven
figures is essentially I put risk at the
Forefront it is always my prior priority
to become a risk manager it's easier say
than to be done but I'll tell you very
honestly if your goal is to become a
consistently profitable Trader you first
need to know how to not trade
and having the patience having the
discipline to know and having the
experience to tell hey this is a subop
optimal condition or the right now the
market condition is not as high
probability as I thought it was I need
to step back a little bit I need to stop
trading only when you start having a
good filter a good eye on telling when
is the time where you shouldn't trade
then you will become a good Trader
because majority of Traders what do you
think they do they they go into the
market and they start looking for trade
do you think they will ever take a step
back and really ask thems what are some
of the filters what what what's my
filtering and select uh select P
selection process what's some of the
criteria that I needs to I need to take
off to even tell me if the market right
now is trending or is it uh in a Min
reversion environment or is it on a
balanced Market or is it ranging so you
need to have the ability to detect a
high probability versus a low
probability environment then you can you
just make things a lot easier and when
you trade your setups each setups that
you take or each of the strategy or
pattern that you trade they each have
different condition where that where
where where they perform the best and if
you can't tell that very likely you are
just taking a piece of puzzle putting it
at the wrong spot so no matter what you
do it just seems like nothing's working
and that's why you you just keep losing
money all right so being an experienced
Trader is all about looking at things
from a pure risk P perspective like what
I say being a risk manager and each
trade you take if you only focus on more
income then very likely you are only
reading one side of the story all right
a good A+ condition that you should
press hard the rest of the time just
chill when the market condition is not
as good it's a little bit poor why do
you trade because you know very likely
you lose money unless you don't know
that is a suboptimal trading trading
condition or environment to trade all
right it's all down to your
understanding all right and there it
says that uh one of our um one of our
members Horas um if you follow our
public Channel you probably know I talk
about him he's actually from Hong Kong
and within one month of joining our
trade Club this Horus this Trader from
Hong Kong have passed two valuation he
secured 300,000 in funding in total on
his Futures profit right I will say
waiting a losing outcomes beyond your
control yes agree with that because
every single trade is like coin flip but
what makes what gives an an edge as a
profitable Trader is we know if this is
this setup is giving me a slight higher
probability of success even if it's just
60% in the long run it's a big figure
it's all about the long-term game you
know what you can control are your setup
and risk management which can ta the
odds into your favor trading at key
levels increases the likelihood of other
Traders making similar decisions and
potentially moving prices decisively in
One Direction when there is a common
ground in an upward or downward Trend
you can make the most easiest money
based on your risk Port tray trading in
the mid-range still offers profit
potential but you have to face price
fluctuations during consolidation or
choppy markets over trade losing money
and confidence are easy to occur in this
kind of situation just just lots of just
lots of conversation and if you look
at uh this one right if you uh
just this one haras he just passed the
second evaluation right hitting 9k
profit Target secure his second
evaluation account and that's why uh all
of the people in trade Club not just all
of the the Traders within my trade club
and to all of you if you're watching
this video it is really important to
have a realistic expectation and
majority the main reason why some of you
are losing money or are struggling it
isn't because you don't know how to
trade I tell you technical
analysis this is probably the easiest
thing to to handle all right if you talk
about having a strategy that works it's
the easiest thing but why do you think
you keep struggling and you keep losing
money all right you you uh let me tell
you this the the loophole or the cycle
of a struggling Trader you make a bit of
money you think you're doing well and
then one a few bad days you go into
heavy draw down you blow your account or
you blow multiple challenges you stop
trading for a little bit you come back
to the market feeling really motivated
then you perform well for a little bit
guess what a few bad days you go back
into the cycle of tail trading Revenge
trading blowing account blowing
challenges or being multiv it again and
you just keep repeating the same cycle
over and over and over again and that's
the scariest part about traders who are
always struggling because they just
don't know when to pull the handbreak is
it their fault is it your fault if
you're watching this video and even
struggling no it's because you have not
received a proper education and that's
why within our trade Club I always tell
all of them every single week no matter
how busy that I am I'll always try try
my very best to make sure I put up one
to two new lessons and the main reason
why I do that is because I want to make
sure all of the Traders within our trade
Club are well educated and they're well
informed you see just by today we got
lots of lessons um again I'm not posting
all the lessons today and yesterday just
because of this video it's just
coincidentally we were having a
conversation within our trade Club you
see two filters to preempt a slow messy
Market reving Trad uh Traders Journal
three conditions are avoid trading entry
confirmation is it good or bad trades
review more trades review more lesson
More lesson you see every single week we
probably have two to three or even four
or five this week the goal is
again I want every single person even if
you're not within the one personage
trade C I want every single Trader right
now as long as you go through my channel
if you just pass by you know what real
trading is full of realistic expectation
you know trading is not easy you know
it's going to take time and yeah just be
realistic and that's pretty much it um
for lesson today if you like the video
please don't forget to like sh And
subscribe let me know in the comment
section below what would you like me to
talk about next and I'll talk to you
next time bye-bye
Browse More Related Video
Mark Douglas Trading Psychology In Less Than 10 Minutes
How to Conquer Overtrading | Trading Psychology | FundingYourTrades.Com
TOP 10 Day Trading Mistakes YOU NEED TO KNOW!!!
How to Make Trading Easier & More Profitable NOW
How to Grow SMALL Forex Account with little money (No Bullsh*t Guide)
The Ultimate Entry Model + Secret Tweak To Never Miss a Trade!
5.0 / 5 (0 votes)