Why You're NOT a Profitable Trader YET...and How to FIX IT!!

Summary

In this lecture, Jared Wesley emphasizes the importance of discipline, planning, and adherence to trading rules for profitability in trading. He discusses common pitfalls such as poor money management, lack of a trading plan, and the psychological aspects that lead to selling too soon or holding onto losing trades. Wesley stresses the need for traders to follow their plans consistently, manage their trades effectively, and understand the expectations tied to their trading strategies. He also highlights the contrast between the dedication traders show when working for others versus their own trading careers, urging traders to build their own dreams and trust the process for long-term success.

Takeaways

• 📈 Success in trading requires discipline, time, and effort, much like going to the gym regularly.
• 🚫 Most traders fail because they don't consistently follow their trading plans or money management rules.
• 📋 Having a trading plan is crucial, but it's equally important to stick to it, even when it's challenging.
• 💡 Traders often sell too soon, cutting profits short, which can significantly impact long-term profitability.
• 🔄 It's essential to understand the balance between goal attainment and profit protection in trade management.
• 📊 Different trading styles and strategies require different management approaches; there's no one-size-fits-all solution.
• 🤔 Traders must be honest and objective with themselves, acknowledging when they're not following their plan and making necessary adjustments.
• 💰 The difference between being profitable and not can come down to how well one manages their trades and adheres to their trading plan.
• 🛠️ Developing a strong consequence system can help traders stay disciplined and committed to their trading plan.
• 🔄 The market is unpredictable, and traders must be prepared to adapt and manage their trades effectively in various market conditions.
• 🚀 Building a successful trading career is a gradual process that requires patience, persistence, and a systematic approach.

Q & A

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

The main topic of the lecture is why people are not yet profitable traders and the rules and path they need to follow to become successful.

What does Jared emphasize as crucial for becoming a profitable trader?

Jared emphasizes the importance of time, effort, and work, as well as following the right rules and having a proper trading plan.

What is the significance of the gym analogy used by Jared in the lecture?

The gym analogy is used to illustrate the common issue of people starting with enthusiasm but quickly losing motivation, which is a pattern that should be avoided in trading for consistent success.

What are some of the topics Jared plans to cover in the lecture?

Jared plans to cover topics such as money management, trade management, psychology, building a trading plan, and having a pre-trade checklist.

What is the 'insanity' Jared refers to in the lecture?

The 'insanity' refers to the repetitive cycle of traders not following their plans, selling too soon, and not learning from their mistakes, leading to a lack of profitability.

Why does Jared mention the importance of being honest and objective with oneself in trading?

Being honest and objective is important because many traders tend to lie to themselves about their progress and mistakes, which prevents them from making necessary improvements and achieving success.

What is the significance of the 'when will the insanity stop' segment in the lecture?

The segment serves as a real-life example of a trader's mistakes, such as not having a plan, neglecting to place a stop loss, and holding onto losing positions, which Jared uses to highlight common pitfalls to avoid.

What does Jared mean by 'bag holding' and how does it relate to trading?

Bag holding refers to holding onto a losing position in the hope that it will eventually recover, which is a risky and often unwise strategy in trading. It's used to illustrate the importance of having a proper exit strategy.

What is the main message Jared wants traders to take away from the lecture?

The main message is that traders need to commit to a disciplined approach, follow their trading plans consistently, and understand the expectations and consequences of their actions to achieve long-term profitability.

How does Jared describe the difference between a trader and a gambler?

Jared describes a trader as someone who follows money and trade management strategies, while a gambler lacks a plan and relies on luck, which is not a sustainable approach in trading.

Outlines

00:00

📈 Introduction to Trading Success

Jared Wesley introduces the lecture by discussing the common reasons why many traders are not profitable. He emphasizes the importance of following the right rules and having a disciplined approach to trading, including money management and trade management. He also highlights the need for traders to be honest with themselves about their efforts and the work required to succeed in trading.

05:02

🛑 The Reality of Trading

Jared shares a personal story of a trader who neglected to place a stop loss and ended up holding a losing position for two years. He uses this example to illustrate the dangers of not having a plan and the importance of being disciplined in following trading rules. He also addresses the misconceptions about quick success in trading and the need for a long-term commitment.

10:05

📉 The Consequences of Not Following the Plan

Jared explains how not adhering to a trading plan can lead to significant losses. He provides a detailed analysis of a hypothetical trader's performance, showing how breaking the plan on only a few trades can result in a substantial loss compared to following the plan strictly. He stresses the importance of sticking to the plan and the psychological aspects that often lead traders to deviate from it.

15:05

🔄 The Importance of Trade Management

Jared discusses the concept of trade management, emphasizing that without it, a trader is essentially a gambler. He explains that understanding and applying proper trade management strategies are crucial for long-term success. He also touches on the challenges of trading, such as slippage and unexpected market events, and the importance of having a plan that can adapt to these challenges.

20:06

🎯 Setting Realistic Expectations

Jared talks about the need for traders to set realistic expectations for their trading outcomes. He explains that different trading styles and strategies will have different expectations in terms of win-loss ratios and profit targets. He encourages traders to find a management approach that aligns with their personality and trading goals, and to understand the trade-offs involved in achieving different levels of profit protection.

25:08

🚦 Adapting to Market Conditions

Jared discusses the importance of adapting trading strategies to suit different market conditions. He explains that certain strategies, like pivots, may work well in trending markets but struggle in choppy markets. He suggests that traders should be flexible and combine different approaches, such as pivots and bar-by-bar trading, to manage trades effectively in various market scenarios.

30:09

💡 Consistency and Discipline

Jared emphasizes the need for consistency and discipline in trading. He points out that most traders know what the right thing to do is but struggle to execute it due to psychological barriers. He suggests that traders should treat their trading as a job, with clear rules and expectations, and highlights the importance of having a consequence system to enforce adherence to the trading plan.

35:11

🛠️ Building Your Own Success

Jared encourages traders to build their own success by following their trading plans and managing their trades effectively. He contrasts the freedom and potential rewards of self-employment in trading with the limitations of working for someone else. He also discusses the importance of having a backup plan to support oneself while pursuing trading success and the value of perseverance in the face of market challenges.

40:14

🚀 Embracing the Trading Process

Jared concludes the lecture by urging traders to trust the process and stay committed to their trading plans. He stresses that success in trading is a gradual process that requires patience and persistence. He also touches on the idea of 'trusting the process' as a mindset that can help traders stay focused and motivated, even when faced with setbacks and challenges.

Keywords

💡Profitable Trader

A profitable trader is someone who consistently makes a net gain in their trading activities. In the context of the video, it emphasizes the importance of following a disciplined trading plan and managing risks effectively to achieve profitability. The speaker believes that most people can become profitable traders if they adhere to the right rules and path.

💡Money Management

Money management refers to the process of controlling and allocating financial resources in trading to minimize risk and maximize profit. In the video, it is highlighted as a crucial component for successful trading, as it helps traders avoid significant losses and ensures the longevity of their trading capital.

💡Trade Management

Trade management involves the strategies and techniques used to monitor and adjust open trades to optimize profits and minimize losses. The video stresses that without proper trade management, a trader is essentially gambling rather than trading, and it is essential for maintaining a disciplined approach to trading.

💡Psychology

Psychology in trading refers to the mental and emotional aspects that influence trading decisions. The video discusses how traders often lie to themselves and fail to commit to the necessary work, which is a psychological barrier to becoming a profitable trader. Understanding and controlling one's psychology is key to overcoming this barrier.

💡Bag Holding

Bag holding is a term used in trading to describe the situation where a trader holds onto a losing position in the hope that it will eventually become profitable. The video uses this concept to illustrate the dangers of not having a proper exit strategy and the importance of adhering to a trading plan to avoid significant losses.

💡Simulator Trading

Simulator trading, or paper trading, is when traders practice their strategies using virtual money instead of real capital. The video points out that while simulator trading can help with learning patterns, it does not replicate the emotional intensity of real trading, and therefore, success in a simulator does not guarantee success in live trading.

💡Stop Loss

A stop loss is an order placed with a broker to sell a security when it reaches a certain price. It is a risk management tool used to limit an investor's loss on a position. The video criticizes traders who neglect to place stop losses, emphasizing that it is a critical part of protecting one's trading capital and avoiding catastrophic losses.

💡All or Nothing

In the context of trading, "all or nothing" refers to a trading approach where a trader either takes a trade for a large profit target or does not take the trade at all. The video discusses the importance of sticking to this approach and not selling too soon, which can lead to missing out on significant profits.

💡Consequence System

A consequence system is a set of rules or penalties that a trader imposes on themselves to enforce adherence to their trading plan. The video suggests that having a severe and effective consequence system can help traders avoid breaking their trading rules, which is crucial for long-term success.

💡Discipline

Discipline in trading means following a trading plan consistently and strictly, even in the face of emotional challenges or market volatility. The video emphasizes that discipline is a key factor in becoming a profitable trader, as it helps traders avoid impulsive decisions and stick to their proven strategies.

Highlights

The importance of following the right rules and path for profitability in trading.

The necessity of time, effort, and work in achieving success in trading.

The analogy of trading to going to the gym, emphasizing the need for consistent effort.

The reality of trading versus the unrealistic expectations set by 'guru' stories.

The importance of being honest and objective with oneself in trading.

The dangers of not having a trading plan and the consequences of seeking advice instead.

The concept of 'bag holding' and its negative impact on trading success.

The difference between paper trading and real trading, highlighting the emotional aspect.

The significance of money and trade management in defining a trader versus a gambler.

The impact of not following a trading plan and the long-term financial consequences.

The importance of understanding one's trading style and expectations.

The concept of 'goal attaining' versus 'profit protecting' in trade management.

The idea that different traders have different approaches and that there is no one-size-fits-all strategy.

The importance of having a proper consequence system to ensure adherence to a trading plan.

The analogy of working for a company versus working for oneself in terms of discipline and accountability.

The potential outcomes of not following a trading plan: account drawdown, quitting out of frustration, or hitting a mental wall and changing.

The choice between managing properly and following a pre-trade checklist or continuing to work for someone else.

The emphasis on the freedom and flexibility that come with successful trading and the discipline required to achieve it.

Transcripts

hey guys Jared Wesley here of live

Traders and it is that time of the week

it's lecture time and this week's topic

is why you're not a profitable Trader

yet I truly believe that most people can

be profitable Traders if they follow the

right rules and the right path and today

we're going to talk about those rules

and the right path you need to follow to

be a profitable Trader I figure this

time of the year is always a good time

of the year for a lecture like this

money management trade management

psychology building a trading plan

pre-trade checklist not selling too soon

etc etc etc we're going to talk about

those topics today in this lecture guys

look I do mean most people can be

successful at this but most people

unfortunately aren't putting the time

and the effort and the work required and

necessary to be successful in it and

sadly that seems to be the case in most

angles and aspects of life you see it's

like the gym thing every January people

like like you know what I want to go to

the gym I want to get in shape and by

February March they're not going to the

gym anymore you can't do that in trading

you can't just say you know I think I'll

give this a few months uh-uh even a few

years if you're going to do this do it

if you're not don't even start because

it'll be one of the most frustrating

things that you've ever tried in your

entire life I promise you literally the

most frustrating thing you've ever tried

in your entire life if you're not going

to put the time effort and work into

this business okay and that means two to

three years all right and this lecture

will help you get there it's going to

show you the process and what's required

to be the best Trader that you can be

and it will not happen overnight I don't

care what anybody says on Google I don't

care about those furu Guru like I turned

$22 into 7 million get out of town okay

that's not the reality of this business

it's not the reality at all and it's why

the industry has a bad name so watch

this video you will become a better

Trader because of it if you like these

videos click that like button smash

Hammer that subscribe subscribe button

I'm Jared Wesley of live Traders let's

get to

[Music]

it this week's lecture topic is why

you're not a profitable

Trader yet right I truly believe that

most people can be profitable

Traders if they put the time in effort

into it and if they're willing to be

honest and objective with themselves and

I know that sounds very simple being

honest and objective with yourself but a

lot of people are not okay um they tend

to lie to themselves they tend to just

say oh I'll fix that on Monday oh it'll

be better tomorrow and they don't

actually put the real time and work and

effort into it and let's be honest about

this okay there are times you don't want

to do things that's that's not being

lazy all right when you don't want to do

something it's called being human but

the disciplined successful person does

it anyway they do it anyway okay there

are plenty of times you wake up on the

wrong side of the bed or you wake up and

you're tired you don't want to do this

and you don't want to hit the gym today

you don't want to fill out your

spreadsheet because you had a losing day

blah blah blah that's that's being human

but you do it anyway you do it anyway so

we're going to talk about some of the

things that Traders do um that really

hurt their chance of success we're going

to throw in some money management we're

going to talk about a little bit of

trade management a a peak into

psychology like it's a pretty broad

based lecture on a lot of various

different topics and I figured you know

we're getting closer to the end of the

year now it's a good time to do

something like this so you can start the

new year fresh and strong um but before

we do any of that I decided you know

let's talk about when will the insanity

stop um this one actually I got a little

while back um and I thought I would just

do a little bit of an update on it

that's all a little bit of an update on

this when will the insanity stop segment

so here is a person that said

hey hope you're doing well Happy

Thanksgiving by the way I wanted some

advice hm okay I own 4,000 shares of CCL

I went ahead I went away and neglected

to place a stop loss

neglected to me that just kind of

basically says I purposely didn't place

a stoploss but whatever however you want

to justify you know like I said not

being honest with yourself I don't mind

holding it but when this starts to turn

around can you see any obvious

resistance I have to watch out for I'm

in it at

2435 there's so many problems with this

it's not even funny okay one you want

advice that's a problem that's a problem

that means you don't have a plan so the

first thing I read is I wanted some

advice you don't have a plan if you're

asking for advice two I went away and

neglected to place a stop loss that's

code for I really had no intention on

placing a stop loss and three I don't

mind holding

it which really confirms that you didn't

actually have a stop loss to begin with

but when this starts to turn around can

you see any obvious resistance this

person has not they're not even thinking

about the downside they haven't said or

mentioned anywhere at any time what

their stop loss is how much money

they're risking well right now they own

4,000 shares at$ 2435 so let's just

round it off that's a $100,000 position

let's just round it off that's a

$100,000 position okay what wait for it

wait for

it this was a year ago Thanksgiving

that's when they got

in how's that going for you you know do

I see any quote resistance above you

know for for when I'm winning on CCL

well what about if you're

wrong and it never wins for you what if

it just goes against you forever and

that's what's happened so far right

we're talking about what two years now

two years this person has been in this

position two years and they're still $6

below their entry give or

take as of yesterday so they're still

$24,000 down on their position and at

one point this stock got down to what $6

or

$7 so your

$100,000 position at one point in

time was worth

what 30

grand holy

[ __ ] and it's still still not a whole

lot better my point is this is the

definition of bag holding right Diamond

hands baby GameStop AMC bit I mean this

is this is bag holding and man that's

what this person probably feels like

when is this thing going to come back

and nowhere in their email for quote

advice did they talk about what their

stoploss should

be bag holding a hundred grand you just

hope at some point they get their money

back two

years what could that money have made

during that time all right time to move

on time to move on okay it has to come

back and it maybe eventually will come

back and maybe they'll go three years

later time value of money all because of

a foolish decision you know okay all

right does it make it a good decision

Alexis what if they have two billion to

invest Alexis is that a smart decision

just give me a yes or no answer is what

they did an intelligent thing to do yes

or no I'll wait for you we'll sit here

all

day okay that's all that matters making

stupid decisions is all that matters

because eventually if you make enough of

them one of them bite you bad enough

that it doesn't matter how much money

you have it hurts right it hurts

okay BS trading Mantra you can't go

broke taking profits this is exactly how

most Traders do go broke there's a

reason this slide is in here it's one of

many reasons that Traders fail we're

going to talk a little bit about trade

management money management here in just

a second because a lot of people

literally think oh I'll just take the

money I'll just take the money I see

green I take it I see green I take it I

see red I let it go I see green I take

it I see red I let it go okay

now simulator trading is real another

[ __ ]

Mantra hey I'm up a $50,000 in my payp

account I'm like hey I've never met a

losing paper Trader cool story bro right

have met most of us at some point in

time I've been there I get emails all

the time from people oh Jared I'm

killing it on my simulator account I'm

crushing it in paper that's that's great

I'm I'm happy for you that's that's

positive okay but there's not a high

correlation between success in paper

trading and success in real trading

you're learning the patterns you're

learning how to press the button and use

stop losses and Market orders and stop

limit orders that's great that's great

but there's no real correlation cuz the

emotions aren't the same the fills

aren't the same there's a lot of things

that aren't the same

okay I agree 100% win rate selling

options on paper then get smoked when

you go live mhm SO trading is hard

period Money Trade management is

everything those two things are

everything without money management you

are not a Trader you're you're a gambler

without some form of consistent trade

management you're not a Trader you're a

gambler so you have to have these two

things if you don't have them forget

about it just walk away do something

else for a living okay simulators are

not real it's going to take a lot longer

than you think to get good at this a lot

take the timeline you think it's going

to take and then triple it don't double

it triple it you thought it was going to

take 6 months 18 months you think it's

going to take a year it'll take three

you think it's going to take two that

one you might be able to double okay it

takes a long time okay [ __ ] happens

along the way in your trading career

getting filled isn't always easy you get

slippage and skipp you have internet

problems Frozen trading platforms Market

servers slow down or go down right high

frequency trading shakeouts insane

random news and tweets seriously random

stuff happens once in a while I mean we

just saw like a $3 bar onvia today kind

of out of nowhere that wasn't insane not

as crazy as some other things but it

just randomly popped and then just came

all the way back down okay that's odd

there's no Holy Grail so have a plan but

the number one thing here is money and

trade management are everything so now

I'm going to show you what I mean by

this okay now some of you Jordan you've

seen this before um but some of you have

not most of you haven't but a few of you

have okay this is a good

example and this is only three SL I

think there's like 25 slides in this and

we're only on slide seven we have like a

we have a lot to cover today um the next

few slides are representative in my

experience of the average Trader of most

Traders and I include myself in that

because I used to be in this position I

used to do the same stuff that that

you're about to say

Okay so let's take a look at it all

right because we're going to focus first

here on this money and trade management

thing

So the plan is to are all or nothing

that's the plan okay that's what your

plan says and then you're comparing it

against selling it too soon you know

because you can't go broke taking

profits right you you just can't you

can't go broke taking profits that's

what they say [ __ ] but it's that's

what they say so if you took this trade

here and you got in on this beautiful

buy setup and it is a pretty damn nice

buy setup I think most people would

agree you're getting in at 4950 your

stops at 4925 and you're like damn I

caught this bad boy double bottom retest

minor price support Rising moving

average bottoming tail narrow body bar

um right probably at the trend line

there change of color bar beaus just

lovely got out for a 1 R gain at 4975

you made an R so actual pnl 500 bucks

your trading plan made a th000 followed

the plan no what was the result you were

$500 behind behind your trading plan but

you felt okay because you still made 500

bucks you didn't feel great you know you

made a mistake

but you still like yeah I still got 500

bucks I took a good trade you know

you're finding all the good reasons to

give yourself credit and you're like I

just I just need to work on that and

then you say to

yourself I'll fix it tomorrow right tell

me I'm wrong you sold too soon today

you're like yeah yeah I'm bummed

but I'll get it I I'll get it right

tomorrow okay trade two comes along get

a little Gap up little another pullback

to a little bit of price support Rising

moving average bottoming tail narrow bot

bar uptrend blah blah blah nice nice you

got a full 2our Target actual

p&l trading plan follow the plan results

the same what did I just say you'll fix

it tomorrow and you did and now you're

like I got this [ __ ] hold my beer that's

what you're thinking you're like I told

you so I told

you I'm not like everybody else Jared I

told you I'm Different you've never

never met anybody as motivated as me I'm

never quitting this business never

giving up on this [ __ ] it's my life I

hate my boss I'm never quitting oh my

gosh I could have I have more emails

about that than I do when will the

insanity stop segments I do I have

thousands not hundreds thousands of

emails that say just what I just said

you've never met me Jared I'm

Different you've never met someone

that's motivated me you don't understand

this has to work okay

so you're feeling all good you're like

hey I wred my wrong I made a mistake on

trade one but I fixed it on trade two

I'm good okay sweet time to go to trade

three

right failed breakout right full stop

out with slippage lost 1.2 r that little

ShakeOut oh that hurt just a little bit

of slip slip right get in at 19 bucks

pop pop

o actual p&l 600 Trading plan minus 600

did you follow your plan yep so good two

trades in a row it wasn't fun you took

some slippage but you followed your plan

okay next trade get another little

breakout over here breakout exited for a

half hour gain it was just too choppy it

was just too choppy right it bounced

pulled back it bounced it pulled back

you just finally got tired of it you're

like you know what it's a breakout it

just didn't

go except the fact that it it did that's

the problem you got 250 a half hour year

trading plan made a

,000 followed your plan nope but but but

it just didn't look good Jared so I

that's why I got out of it I mean

breakouts a hit and run pattern and if

they don't go I I just I just get out of

them is it written in your plan no it's

not are you a two R All or Nothing

Trader or are you not uh I I I am I am

but Jared this thing looked

terrible are you an All or Nothing

Trader or not I am did you break your

planner or not I did okay let's move

on this is how people justify things it

just wasn't looking good it wasn't

looking I know I'm An All or Nothing

Trader but look it just wasn't looking

good and the last time that happened it

it stopped out so I'm saving myself an

R okay and it

works trade five you get in this little

three bar play up here Wide Bar narrow

bar peekaboo is up comes back down stops

out three bar play full stop out minus

one R actual minus one R trading plan

minus one R follows your plan okay back

to the good stuff next one three bar

play to the

downside triggers goes against you and

stops out minus one R minus one wow okay

so you're thinking to yourself three

trades sorry six trades three you

followed your plan three you broke your

plan right pretty much I mean you broke

your plan on the first trade trade

number one okay then you broke your plan

on trade number number four so actually

you followed your plan 66% of the time

okay 66% of the time you followed your

plan not bad you're thinking okay but

here's the problem all right here's the

problem see this is your actual this is

your trading plan

okay and you're thinking to yourself

it's not the end of the world because

you made $150 which wasn't ideal but

your trading plan made

,400 $ you were what two and a half

R behind your plan on only six trades

guys where am I going with this I'm not

even getting to the big stuff

yet two out of six trades only onethird

33% of those trades you broke your plan

on and on six trades it cost you two and

a half

r now your batting average actual is

50% your batting average trading plan

50% your batting average is identical it

didn't change so when you stopped you

stopped that wasn't the problem it was

when you won that was the

problem your winners were the problem

your losers weren't the issue does this

sounding familiar to anybody it's like

wait wait wait I take full advantage of

my stopouts it's the winners that I cut

a leg off too soon I cut

short and you don't think it's a big

deal until you look at the numbers and

you're like it's 2 and 1/2 hour on six

trades and then you're like wait

multiply this by 10 that's 60 trades

that's called call it one month of

trading it's

$1,500 versus

$14,000 now I'm not trying to say that

every six trades will be exactly like

this it's not what I'm saying obviously

sometimes you'll break your plan and it

will help you sometimes but in the long

run it will cost you more money than it

saves you it's the reason it's your plan

because it

works but if you don't follow it it

means nothing and over the course of a

month that's a big difference and I

always tell people the same thing it's

the difference between keeping your job

and quitting your job that's what the,

1500 to 14,000 is it's the difference

between keeping your job

and quitting your job now again I don't

expect all 54 other trades to be

identical to this they won't but the

concept is what I'm going for you take

full advantage of the

loss and a partial advantage of the

winner and it's going to hurt you in the

long run this is acceptable 50% with a

1.87 win loss ratio that's nice that'll

get you places this this is Break Even

Trader status right there that that's

what that is 50% with the one uh win

loss ratio is little up little down

little up little down that's what that

is okay now let's take it one step

further we're going to keep going I'm

going to drill this bad boy

home how expensive is breaking your plan

and selling too soon well 20 trading

days a month three trades a day 60

trades a month 12 months a year 60

trades a month

720 trades per year now again I know I

know you cannot extrapolate exact data

from this analogy I get it but you can

understand where I'm going the analogy

part of it okay it's the concept I'm

after- 1250 versus your plan for every

six trades is how much over 720 trades

it's

$150,000 still think you can't go broke

taking profits batting average didn't

change at all identical

50% it's

crazy crazy

give it some

thought that's the difference between

controlling your own future and someone

else controlling your future and it

looks like

this it looks like this 60 trades per

month for one year 50% batting average

win loss ratio 1.09 versus

1.875 does it make a

difference

$168,000 following your plan

$188,000 breaking your

plan so you got to go back and ask

yourself what are you doing because from

what we have seen in this particular

analogy your plan

works oh my gosh it's one of the hardest

things to do in trading is actually get

a plan that works and you finally found

quote the Holy Grail a plan that works

and then what do you do

you f with it you mess with it you screw

with it something that literally is the

path to Financial Freedom and you're

like no I think I'll go the other

way

why

right psychology emotion ego need to be

right fear of loss is stronger than your

hope for greed yes yes yes yes and it

all starts between the two ears in your

head and this is why I tell

people find a consequence system that's

nasty severe and

ugly something so bad that you'll never

break your plan and then have someone

hold you accountable to it because this

is what your life is going to be like

guys th this was this was me I used to

go back and and I know youve all not all

but many of you have been there and you

you tell a friend a spouse a brother a

sister a parent whoever and you're like

like if I just followed my plan and

stopped selling too soon I'd be making a

couple hundred grand and then they look

at you like deer in the headlights

cross-eyed and go well why don't you

just follow your plan

then and they're looking around like

they're looking around not you they're

like am I missing something did is there

part of that conversation that he he

failed to tell me if I just followed my

plan I'd make a couple hundred grand a

year they look at you and they're like

what are you are you dumb or something

if if it's written down just go follow

it like if the coach says do 20 burpees

you do 20 burpees why why are you doing

10

burpees I know we're all thinking the

same thing aren't we

because then your excuse is it's just

not that easy you're not a

Traer right tell me you haven't said

that yeah but it's just it I know I know

I'm not stupid mom

you don't understand you're not a

traitor and you sit there and you just

laugh you walk away and you laugh and

you're like did I really just say

that yes you did and you looked and

sounded like an idiot because you are an

idiot because your actions speak louder

than your words and your actions suggest

you do stupid [ __ ]

okay it's craziness it's insanity is

what it is and yet so many traitors do

this and it's the reason they're not

profitable

now on the same line of

thinking know thyself and know your

management part of having a successful

trading plan that's followable is that

even a word followable okay I just

created a new word all

right if your plan meets your

personality Style it's much easier to

follow right goal attaining versus

profit protecting you can't have both I

mean you can but it's rare to be able to

consistently have both right the tighter

you manage the more profit you are

protecting but you also have a greater

chance of being stopped out at that

particular level or trailed out stopped

or trailed out the looser you manage the

larger the target you will reach however

you will protect less and potentially

give back some gains you can't reach a 5

R goal and lock it at one R sure it

happens from time to time but that's not

going to be common if you want that

large Target wiggle room is the word of

the day you have to give them room if

you don't want to give them room then

you need to figure out a different

approach a different strategy that still

makes money I I don't care if you manage

tighter just understand you're not going

to see four and five our targets very

often or even two and three our targets

very often okay followable there it is

oh they really they stole my word

comparative more followable superlative

most followable able to be followed look

at that someone stole my word Cliff

anyway hence management is always a give

and take and management is always about

expectation if you get do a trade with

the wrong expectation you will likely

have a bad result you have to understand

what it is you're doing why because they

go hand

inand you can't for example have a tight

management and a low batting average you

won't make

money you won't do it if you're shooting

for one R targets and you bat

37% good

luck at the same time you cannot expect

to get five our targets and bat

75% it's not likely going to happen

every once in a while you know we we

beat the odds and for a period of time

we we do very well and then reversion to

the mean comes in and we go back to our

normal

selves

okay goal attaining versus profit

protecting big part of this know thyself

know the

expectation lots of ways to get to the

same place a lot of ways to skin a cat a

lot of ways to get to the same thing the

top here we have a 40% batting average

most of you would say isn't very good

but if you have a 2.75 win loss ratio

that's pretty good right four winners 11

R in gains six losers six R in losses

net after 10 trades you'd make five r on

60 trades that's 30 R oh my gosh you go

down 50% batting average oh my gosh 30 R

60% batting average 1.5 win loss ratio

30 R right 70% batting average 1.15 win

loss ratio guess what 30 R right 30 r on

all of these from a 40 to a 70% batting

average okay point you don't have to do

it the same way as your neighbor not

everybody does it the same way and you

don't have to shoot for 30 yards either

I know traders that are happy to get 10r

but they're consistently at 10r and they

just raise their risk they're not even

trying for 30 R I know some traders that

like to take 100 trades a month and some

traders that like to take all two trades

a month I'm kidding on that but on a

serious note some Traders like to take

20 trades a

month everyone in between different

management approaches different patterns

they take different times of day that

they trade different number of TR trades

they take you don't have to fit in the

same box as your

neighbor right this isn't the left you

don't have to sit in the same box you

don't have to put everybody in the same

box we can be different it's

okay and you can do it in various ways

30% batting averages 80% 90% batting

averages but you have to know the

expectations you have to know the

expectations

if you don't then a 40% batting average

with a one R Target's not going to

work if you don't know the

expectation different approaches for

example pivots bar by

bar pivots are nice they're going to get

you to some pretty big healthy targets

especially in a stock that's power

trending but but if you're in a choppier

Market pivots might struggle see where

I'm going like my point is is that

regardless of the management approach

that you choose there will be

circumstances times environments in the

market that won't be super

conducive to your style of

management when we're in a power Trend

Market pivots are awesome if you have a

stock on its own page it's ignoring the

market pivots are awesome if you're in a

choppier market bar by bar it's probably

going to be a little better you know the

markets where it literally goes up for

20 30 minutes in the morning from 9:30

to 10 and then it does a 100%

retracement or 120% retracement then

bounces 50% those markets pivot struggle

in bar by bar does better but you're not

getting home runs with bar by bar not

frequently

anyway you're just going to move that

stop up move that stop up move that stop

up move that now could you combine the

approach of course you could but that's

where learning the expectation is some

people say all right I'm going to do bar

by bar to start the trade so I can lock

in some profits on one/ third or half

then I'm going to do pivots for the back

half and get the big move some people

pick a Target and say well I want a $2

Target and when they get to 80% or 90%

of the target then they switch swi to

bar by bar there's a lot of different

ways but you just have to understand

what the expectation of it is because if

you don't understand that using pivots

is going to not protect a lot of money

right I mean this stock could be up

three are right here at the top and

every once in a while one's going to

come all the way back against you all

the way back and if you didn't recognize

that was a

possibility you're going to have a hard

time in

trading

pivot vers bar by bar you guys have seen

this

slide first Target second target why

there's the pivot to the left there's

another pivot to the left so say you get

in right down here right right there you

could add right here add right here but

imagine you get in right down there and

your stop loss is here maybe you put it

a little

lower the initial management is 5 minute

pivot 75% to Target changeed to 5 minute

bar by bar okay okay this is a 5-minute

chart

okay so you get in here we're not

anywhere close to that 8150 Target right

we're down in here at like I don't know

7925 okay so you're looking at a Target

that's

$225

away big Target too because this is

probably only a 50 c stop loss so that's

like a 4 and a half to our Target anyway

stock moves up continues higher

now you're getting into the area where

you might consider that 81 area you're

getting close is it 75% you have to do

the math on pulls back bounces now

you're getting into that bar by bar

area right so this is someone's using a

combination it's like well I want the

bigger Target so I know I have to be

flexible in the beginning of the trade

but as I get close I want to lock some

in why well the beginning of the trade

you don't have any money to lock in

you're not really locking anything if

you start the bar by bar too soon it

defeats the purpose of trying to get

four

R now if you're someone who's like look

I'm just looking to scalp this thing for

like an R you could do bar by bar right

off the start probably right because

this thing gives you an R basically in

the first couple

bars but the other person saying I I

don't I want the big move I feel so good

about this triple Bottom I want 3 four

five r out of it you

know it just depends on what your

expectation

is here's another

example daily chart gapping over two red

bars right we kind of need to be over

that like 1725 area right there

okay right there and we have room to 18

bucks so like 1710 to $18 that's it okay

over here here it's not really a three

bar play it's like an engulfing bar

right you had a green bar and this

remember the tail that bar was red

completely red at one point a battle was

fought buyers won the battle you buy it

17 15 stop

1680 then you begin your 3 minute bar by

bar as you get close to Target that's a

combination approach or or you might

sell some half at one

R then start a combination of approach

you guys there's a million ways to do

this we could be here for 10 hours

talking about different managements I

mean you track 15 Antoine you could

track

115 I try to only track patterns that I

know I can follow not patterns

management strategy that I know I can

follow look I'm not going to track 5 R

All or nothing I know it's not happening

for me it's just not it's not realistic

for me okay when you're new you won't

know that as

well what about breakouts and three bar

play management same idea same concept

right you get in right here at

9:38 stop right there there's your daily

chart maybe you get back in maybe you

don't the point is whatever management

you choose or decide to

use you need to do it every single time

not half asset we saw earlier and I'll

go back to it to refresh your

memory you only broke your plan

twice and it cost you two and a half

hour and if you consistently break your

plan is going to cost you your career in

trading and you're going to be working

for that job or that boss for a lot

longer than you

want all because you couldn't sort out

the mental aspect of

trading most Traders not all but most

Traders know what the right thing to do

is they just can't bring themselves to

do it because there's no one requiring

it of them there's no one forcing it

upon

them true or

false I mean you don't have to answer

it's

rhetorical but do you guys think in your

opinion that you would do these things

if you were doing this for a

company think about

it do you think you would do these

things if you did it for a company you

know like you go and work for a company

and you you work in a cubicle and you

have an Excel spreadsheet and the boss

says well you do the Excel

spreadsheet

well if the boss came in and said

targets

$10 that's

it CEO just called said hey Target's

$10 All or Nothing we're either out at8

or out of 10 you're going to sit there

and just laugh okay I got the easiest

job in the world are you [ __ ] me

wait you mean to tell me that I can just

set a bracket to exit at 10 or exit at 8

yeah Okay cool so wait you're also

telling me that I can just leave for the

day and come back at

3:45 wait let me get that straight could

boss come come back here for a

second so you're telling me that I can

set my order to sell at 10: and we make

money for the

company and I can also s set my order to

sell at 8 as a stop out and for the

literally the rest of the day I can just

leave yeah that's what I'm telling you

but you got to close the position before

4:00 that's the only other

caveat okay yeah I'll see you at 3:45

have a nice day yeah you too buddy

that's

it now some of you guys are like haha

Jared that's funny not funny no it's

hilarious because you're an

idiot you would do it for someone else

but you wouldn't do it for

yourself are you dumb

stupid you would do it for someone else

for like 10% of the prophets 5% of the

prophets 1% of the prophets but you

won't do it for yourself for 100% of the

profits wow that's all I can say is

wow and you got you're sitting there

going it's kind of right you know he

kind of is right why do I do what I do

because a boss isn't forcing you not to

do it that's

all it's the only reason it's the only

reason you all show up for work on time

don't you why cuz my boss told me to and

if I

don't they'll fire me you guys have

heard me say it I'll say it for the 9

millionth

Time Forest

gum why'd you put that rifle together so

fast cuz you told me to drill sergeant

literally cuz you told me to drill

sergeant but you won't do it it for

yourself stupid is as stupid

does and we act very stupid sometimes in

trading very very very stupid and yet

everyone thinks they can be their own

boss everyone believes I Hate My Boss

he's an idiot she's an idiot they're an

idiot they do people say this [ __ ] all

the time oh my boss is as dumb as they

come I don't know how I got the job I

don't know how she got the

job

what so you should be the boss uh-huh oh

I'm way more qualified than she is uh

okay but yet left on your own devices

and

trading doesn't look like that does

it it's

crazy so o n nice Gap over a red bar

over a pivot over another pivot like

level one type Gap very close if you

consider that a wide range bar that's

tough but Gap here Gap here nice little

three bar play with a little mini

ShakeOut okay three bar play with a

little bottoming

tail

okay do what you're supposed to do when

you're supposed to do it get in at 4046

stops 3970 it's a $5,000 trade straight

up like painless straight up one two

three four five bar straight guys it

went

$5.50

$5.50 on a 75 cent stop that's pretty

good like six or 7 to one something like

that cuz you do what you're supposed to

do you take the pattern a lot of you

guys are good at taking the pattern

you're good at recognizing the entry and

the stop it's just in between you mess

it up or or or you break your plan and

then what happens you break it to the

point where the next trade messes with

your

head you break it to the point where

then you go on tilt slight tilt not Full

Tilt just mini tilt and you lose four r

that day that's mini tilt Full Tilt is

when you bag hold like the guy who owns

CCL and you know you're down $70,000

that's bag

holding but mini tilt is when you take a

trade doesn't go the way you thought or

something crazy happens hft and then it

affects the rest of your trades for the

rest of the day or you have a really bad

day and the next day you come in you go

I got to get my money back got to get my

money back

right

I want you to give it some

thought because most people you know we

go all the way

back why you're not a profitable Trader

yet for most

people derives it's a derivative of not

following your plan or not having a plan

either don't have one or don't follow it

don't have one or don't follow it don't

have one or don't follow

it don't follow it not following it

isn't just management it simply could

mean taking more trades than your plan

said it could simply mean risking more

money than your plan said it could

simply mean taking a pattern that's not

in your plan it could simply mean not

going through your pre-trade checklist

before you take a trade it could mean a

lot of

things but all of those things matter to

your Trading

all of them matter right go back to here

they all matter money management trade

manages everything it's going to take

longer than you think and there's a lot

of garbage and crap that happens in this

business but if you stick to good

trades good patterns good things happen

good trades good patterns good

management good things

happen good

patterns good management good good

results good patterns good management

good results good patterns good

management good results and for some

reason you'd rather do a th000 burpees

2,000 burpees right

yav for some

reason you can't do it and the worst

part

is you're doing it for yourself you're

not doing it for somebody else that's

the part for me that

I sit and I meditate on at

times I do I honestly sit down and think

what is it about the human

psyche that allows us to so easily

without question follow someone else's

requirements or someone else's rules

like a boss but yet for

ourselves we won't do it it's the same

reason we're good at dispensing advice

to others but not actually doing it

ourselves it's

crazy is it though Sophia right like

somebody's saying it feels like less

risk but is it when you think about

it is it less risk it's your life we're

talking about right we're literally

talking about your entire

lifestyle so sure a company's willing to

guarantee you a paycheck if you show

up but now when you do it for yourself

you're not guaranteed the

paycheck but the upsides

freedom freedom is a pretty big

motivator for

me right I mean it's a big

motivator I look around and pinch myself

and go this is insane how do I have this

much freedom in life how am I able to do

just about what I want to do when I want

to do

it

because you showed the discipline

required to get to that point and the

beauty of it

is no one can take it from you when you

get there you see no matter how high up

a company you go they can still take it

from you right if you're the CEO they

can still take it away from you Steve

Jobs got fired for goodness sakes Steve

Jobs got

fired they can take it from you now

maybe that's a great analogy and a

terrible analogy it's great because it

shows no matter how gifted you are you

can be fired it's a terrible analogy

because well he ended up doing really

well but you understand the

analogy I want you to think about how

important it is to you because building

someone else's dream is not the same as

building yours build yours first then go

out and help other people build theirs

let me repeat that build yours first and

then help other people if you can do

both at the same time then wonderful

wonderful more power to you if you can

do both at the same time great but you

come first you are Numero Uno you are

number

one it's like when you're in an airplane

put your mask on first before you help

someone

else put your oxygen on first before you

help somebody

else you're right Sophia people don't

think it can happen for them and that's

why self-help books Tony Robbins Opa

blah blah blah are so

popular because people are generally

have a negative attitude towards success

whether or not they can do

it I can tell you

this it only takes one you can fail 10

times but the 11th time is all it takes

it's easy to find another job there's

plenty of jobs out there but there's not

a lot of freedom out there for me I'll

search to the end of the Earth to find

that CU there's always a job waiting for

you around the corner

always so you're either

going to put in the hard work for

yourself and change your life or you're

going to put in the hard work for

someone else and change their life

that's really what it comes down

to you know that that saying or that

phrase like hey thanks for all your hard

work this year you know keep doing it so

the boss can buy another Ferrari next

year how about buying one for yourself

how about just some freedom and flexibil

for yourself how about that you get back

into trading you sell too soon you're

all you're doing is hurting your future

that's all you're

doing you're going to be frustrated with

yourself disappointed with yourself the

flip side is following your rules and

your plan every once in a while you'll

be frustrated but most of the time

you'll be happy that you're doing the

right thing at the right time and the

result will show

it so you want to know you left money on

the table

knowing you produce good trades that

have good results but you're not able to

see the money from

it it's like giving someone else advice

they take your advice and become a

millionaire and you sit there and go why

didn't I take my own

advice because you didn't have the

stones you

know and unfortunately it leads to this

the eventual failure of your business if

you continue this process long enough

three things will happen you'll draw

down your account to critical levels and

you'll be forced to quit you will quit

out of frustration and join the legions

of failed Traders with all the excuses

for why it didn't work or you'll hit

quote the wall and finally begin the

challenging process of change those are

really the three things that happen you

will be one of these three almost

guaranteed 99.9% be one of these three

things you'll draw down your account and

you'll just be forced to quit you'll

just quit out of frustration and say oh

trading's not for me ah Traders are just

gamblers or you'll finally mentally hit

the wall and be like you know what I got

to get my [ __ ] together and I'm going to

change I'm going to be

better for those of you from

Philadelphia many of you don't remember

this because it's a long time ago

now they had a saying called trust the

process right back when Sam henky was

there and they were literally losing on

purpose literally losing on purpose to

get top three draft picks and it was

called the process trust the process

they were gaming the

system and the n NBA got so pissed off

that they basically orchestrated firing

Sam hany because they didn't want people

gaming a broken

system you can be your own system in

trading if you trust the process cu no

one can take it from you isn't that the

beauty of it you go out there and you

proudly work for somebody else while

you're working on your

dreams on the side and then

eventually you proudly quit that job and

work for yourself exclusively

forever sounds like a plan to

me give it some thought where do you

want to be do you want to be selling too

soon and being

frustrated and realizing that possibly

potentially you could be making the

money you want to make

or be

frustrated by making a tenth of the

money you should be making because 20%

of the time 30% of the time you break

your plan and it makes a massive

difference on your be your p&l your

bottom line and on top of that the heck

just happened there it is and my point

I'm getting at

is you have a

choice you you have a

choice not anyone else not your boss not

your spouse not your kids not your

friends you why owe you what do you want

to do with this

opportunity do you want to manage

properly do you want to follow your

pre-trade checklist do you want to

follow your trading plan do you want to

do this right risking $5 per trade when

you start and building your way up to

500 1,000 5,000 50,000

risk or do you want to just keep

working for someone else forever and

talking about one day someday right was

it the rock a few months back was very

popular for

saying one day or day one which is it

one day or day

one which one are you going to

be because right

now while I might be slapping you a

little bit it's still a feel-good

lecture oh I'm going to do this I'm

going to make it work then the market

just bends you over tomorrow and beats

the [ __ ] out of

you and you lose four in a row and all

of a sudden you're like I can't do this

you go what happened up to yesterday

well today's

different you're going to get punched

you're going to get knocked down in in

trading the Market's no joke Market's

going to mess with you it's going to do

some nasty things to

you how many times you get back up

that's it it's all that matters how many

times you can keep getting back

up that's just life every successful

person's been knocked down every single

one of them it's rare it's super rare

the Mark Zuckerberg of the world where

you start a business steal somebody's

idea and in five years or a billionaire

those are like unicorns even in the

billionaire world that's a unicorn

billionaire almost everybody else had to

go through some [ __ ] a bankruptcy losing

everything risking it all on the line

and then making it the beauty about

trading is you don't have to do any of

those things it's just a slow systematic

process to

success some will get it sooner some

will get it later but you don't have to

ever give up on

it find a way to pay your bills in the

background while you're working towards

your dream and a lot of that is making

sure you have a proper trading plan with

good money management and good trading

management and following it and a big

part of that is having a proper

consequence system a proper consequence

system okay so with

that hopefully you guys learned a little

bit about how to be a better Trader

hopefully you'll think a little bit more

about why you're selling too soon you'll

think a little bit more about the

expectations you have for your trades

and if they match your Pur personality

and your trading

objectives and then if they don't you'll

make some adjustments and if they do

then you'll just simply say hey I need a

bigger consequence system because for

some reason one I have now isn't enough

when you do a th000 burpees and then

you're like yeah I got to do it again

that's 2,000 burpees something's not

strong enough by your consequence system

if you'd hold till $10 for your boss

then a th000 burpees isn't enough I'm

using that cuz that's somebody's

consequences and they've broken it

twice not strong enough it's just

not give it some thought about what it

would take to keep you and put you on

the straight and narrow I'm Jared Wesley

of live Traders we'll get back at it

again next

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week

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