Who Are YOU...As a TRADER? It Matters More Than You Think!

Summary

In this insightful lecture, Jared Wesley emphasizes the importance of self-awareness and objectivity in trading. He argues that many traders fail because they don't accurately assess their personal strengths, weaknesses, and constraints. Wesley stresses the need to track trades, set realistic goals, and build a trading plan that aligns with one's personality and circumstances. He also highlights the value of experience and continual learning in the trading journey, urging traders to be patient and to expect a gradual path towards profitability.

Takeaways

• 🎯 Understand Your Trader Identity: Recognize the difference between who you think you are as a trader and who you truly are. This self-awareness is crucial for developing a successful trading strategy.
• 🚫 Overcoming Bias: Be aware of subjective biases and strive for objectivity in your trading decisions. Track your trades and use tools like video recording to help uncover unconscious biases.
• 📈 Align Trading Goals with Personal Capabilities: Your trading goals should be realistic and in line with your personality traits, time constraints, capital, and intangible skills.
• 📊 Chart Patterns and Personal Fit: Choose chart patterns that match your patience level and risk tolerance. For instance, avoid patterns that require long hold times if you're not patient.
• 💡 Manage Expectations: Different trading patterns have different success rates and behaviors. Understand what to expect from each pattern and adjust your strategy accordingly.
• 🔄 Gradual Progress: Increasing risk levels and changing trading styles should be done gradually to avoid surprises and不适应.
• 📝 Track and Review Trades: Maintain a detailed record of your trades and review them regularly to learn from your experiences and improve your strategy.
• 🕒 Time Management: Ensure your trading strategy fits within your available time. If you can't monitor a trade for hours, avoid strategies that require you to do so.
• 💰 Capital Management: Be mindful of your account size and ensure your trading goals are achievable with the capital you have.
• 🛠️ Continuous Improvement: Embrace the learning process and be open to making changes based on your review of trades and performance.
• 📉 Acceptance of Losses: Understand that losses are part of trading. Develop a plan to handle them and don't let them disrupt your overall strategy.

Q & A

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

The main topic of Jared Wesley's lecture is about understanding who you are as a trader, recognizing the differences between your perceived self and your true trading identity, and how to become a better trader by being more objective.

Why does Jared emphasize the importance of objectivity in trading?

Jared emphasizes the importance of objectivity in trading because it helps traders to rid themselves of subjective biases that can lead to poor decision making. Objectivity allows traders to make more informed and rational trading decisions based on facts and data rather than emotions or personal biases.

What does Jared suggest traders do to overcome subjective biases?

Jared suggests traders track their trades, use video recording systems like OBS to record themselves trading, and maintain a trading journal. These practices can help traders identify patterns, unconscious biases, and areas for improvement in their trading approach.

What are some common misconceptions traders have about themselves according to the transcript?

Some common misconceptions traders have about themselves include believing they are more patient, decisive, or capable than they actually are in a trading context. They may also overestimate their ability to handle certain trading scenarios or underestimate the challenges involved.

How does Jared address the issue of setting realistic trading goals?

Jared addresses the issue of setting realistic trading goals by encouraging traders to be objective about their capabilities, resources, and the time they can commit to trading. He emphasizes the need to align trading goals with personal traits, time constraints, capital, and intangibles like emotional stability and discipline.

What is the significance of understanding personal trading style according to Jared?

Understanding personal trading style is significant because it allows traders to develop a trading plan and strategy that aligns with their strengths and weaknesses. This alignment can lead to more consistent decision-making, better management of trades, and ultimately, greater success in trading.

Why does Jared stress the importance of tracking and reviewing trading performance?

Jared stresses the importance of tracking and reviewing trading performance because it provides traders with valuable insights into their trading habits, the effectiveness of their strategies, and areas for improvement. This analysis helps traders make necessary adjustments and refine their approach to better align with their objectives and capabilities.

What are some factors that can influence a trader's success according to the transcript?

Some factors that can influence a trader's success include their personality traits, time constraints, capital availability, understanding of market dynamics, and their ability to manage emotions and maintain discipline during trading. It's also important for traders to have a clear, realistic trading plan and to continually educate themselves about market trends and strategies.

How does Jared suggest traders handle situations where their trades do not go as planned?

Jared suggests that traders should be prepared to handle situations where their trades do not go as planned by having a well-defined trading plan that includes risk management strategies. He also encourages traders to learn from these experiences, adjust their plans as needed, and not let emotions like frustration or fear dictate their actions.

What is the role of discipline in trading according to the lecture?

According to the lecture, discipline plays a crucial role in trading as it helps traders stick to their trading plan, manage risks effectively, and avoid making impulsive decisions. It also enables traders to learn from their mistakes, maintain consistency in their approach, and continuously improve their trading performance.

Outlines

00:00

🤔 Introduction to Trader's Self-Identity

The speaker, Jared Wesley, introduces the topic of self-identity in trading. He emphasizes the importance of understanding who you are as a trader, rather than who you think you are. He points out the common misconceptions traders have about themselves and sets the stage for a lecture that aims to provide insights into overcoming subjectivity and embracing objectivity in trading decisions.

05:02

🧐 Understanding Biases and Objective Truth

Jared delves into the concept of biases that traders often have, which can hinder their success. He stresses the need to identify and overcome these biases to find an objective truth about one's trading abilities. He uses examples to illustrate how subjective beliefs can lead to incorrect trading decisions and emphasizes the importance of data and experience in revealing the objective truth about one's trading.

10:03

🕒 Time Constraints and Trading Styles

The speaker discusses the impact of time constraints on trading styles and strategies. He uses examples to highlight how the amount of time a trader can dedicate to the market can significantly influence their trading approach. He also touches on the importance of aligning one's trading style with their personality traits, time availability, and capital constraints to achieve success in trading.

15:05

💰 Capital Management and Risk Tolerance

Jared addresses the aspect of capital management and risk tolerance in trading. He explains how the amount of risk a trader is willing to take and the size of their trading account can dictate the type of trader they can be. He also discusses the importance of starting small and gradually increasing risk as the trader gains experience and confidence.

20:05

📈 Adapting to Market Conditions and Personal Growth

The speaker talks about the need for traders to adapt to changing market conditions and to continually grow and evolve in their trading practices. He shares personal experiences and examples from other traders to illustrate how understanding and adjusting to one's personal strengths, weaknesses, and market dynamics can lead to improved trading outcomes. He also emphasizes the importance of patience and persistence in achieving trading success.

25:06

🛠️ Crafting a Trading Plan That Fits Your Personality

Jared stresses the importance of crafting a trading plan that fits an individual's personality, time constraints, and financial resources. He explains that most traders fail because they do not consider their personal strengths and weaknesses when designing their trading strategies. He advises traders to be objective about their abilities and to create a plan that aligns with their personal identity and goals.

Keywords

💡Trader

A trader is an individual who engages in the buying and selling of financial instruments, such as stocks, bonds, commodities, or currencies, with the goal of making a profit from price fluctuations. In the context of the video, the speaker, Jared Wesley, emphasizes the importance of traders understanding their personal strengths, weaknesses, and trading style to achieve success in the market.

💡Objective Trading

Objective trading refers to making decisions based on unbiased analysis and factual data, rather than being influenced by emotions or subjective opinions. In the video, Jared stresses the need for traders to be objective in their approach to identify patterns, manage risks, and evaluate their performance.

💡Subjectivity

Subjectivity involves personal feelings, opinions, or biases that can cloud judgment and decision-making. In trading, subjectivity can lead to poor choices and unrealistic expectations. The video highlights the importance of recognizing and minimizing subjectivity to achieve more objective and successful trading outcomes.

💡Personal Truth

Personal truth refers to an individual's unique understanding or belief about themselves, which is often based on self-reflection and experience. In the context of trading, personal truth involves a trader's honest assessment of their abilities, limitations, and trading style.

💡Trading Plan

A trading plan is a detailed, written document that outlines a trader's approach to trading, including strategies, risk management, and performance goals. It serves as a roadmap to guide decision-making and ensure consistency in trading actions.

💡Risk Management

Risk management in trading involves strategies and practices to minimize and control potential losses. This includes setting stop losses, diversifying investments, and determining the appropriate position size based on the trader's account size and risk tolerance.

💡Accountability

Accountability in trading refers to the responsibility traders take for their actions, decisions, and outcomes. It involves tracking performance, reflecting on mistakes, and making necessary adjustments to improve trading strategies and behaviors.

💡Personality Traits

Personality traits are the distinctive characteristics that define an individual's behavior, thoughts, and emotions. In trading, understanding one's personality traits is crucial as it can significantly impact trading style, decision-making, and the ability to handle stress and uncertainty.

💡Time Constraints

Time constraints refer to the limitations in the amount of time available for a particular activity. For traders, this could mean the number of hours they can dedicate to trading each day or the duration they are willing to wait for a trade to reach their target.

💡Intangibles

Intangibles are non-physical attributes or qualities that are not easily measured but still have value. In trading, intangibles can include a trader's mental state, emotional control, and ability to handle stress, all of which can significantly affect trading performance.

Highlights

The lecture emphasizes the importance of objectivity in trading, stating that many traders fail due to subjective biases and not recognizing their true strengths and weaknesses.

Traders often have unrealistic expectations of themselves and their trading abilities, which can lead to disappointment and failure.

Jared Wesley introduces the concept of 'objective personal truth' in trading, urging traders to identify their real capabilities and limitations.

The lecture addresses common misconceptions about trading, such as the belief that patience in other areas of life translates to patience in trading.

Wesley stresses the need for traders to track their trades and review their performance to uncover unconscious biases and improve their strategies.

The importance of understanding one's personality traits and how they affect trading decisions is discussed, highlighting that different traits may be better suited to different trading styles.

Time constraints, capital limitations, and other personal factors should be considered when developing a trading plan that fits an individual's lifestyle and goals.

Wesley debunks the myth that certain trading patterns or strategies are universally successful, explaining that their effectiveness depends on the individual trader's approach and circumstances.

The lecture encourages traders to be realistic about their potential for success and to set achievable goals based on their personal trading history and capabilities.

Wesley shares personal anecdotes and experiences to illustrate the points discussed, making the content more relatable and easier to understand for traders.

The concept of 'climactic' trades is introduced, explaining that these high-risk, high-reward scenarios may not be suitable for all traders, especially those with less risk tolerance.

The lecture touches on the psychological aspects of trading, such as handling losses and the stress of waiting for trades to reach their targets.

Wesley emphasizes the importance of having a well-defined trading plan and sticking to it consistently, even when facing challenges or setbacks.

The lecture concludes with a call to action for traders to introspect and objectively evaluate their trading practices, ensuring they are on the path to improvement and success.

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

guys is who are

you as a Trader you guys all think

you're something you're not for the most

part and you're like yeah I think you've

done a lecture on this topic I've done a

lecture on a similar topic but today

I've completely changed it up there's

only maybe one or two slides that are

the same out of the 20 slides we're

going to go through so it's pretty much

a brand new lecture I encourage you guys

um to watch it because I think it's

going to be a very eye openening

experience for you guys you have people

out there saying oh I want to make 200

Grand a year as a Trader but you have a

$2,000 account oh Jared I want to hit

these big three targets but you're the

most jittery impatient person in the

world oh Jared I have a job to go to you

know in one hour but I want to manage on

15minute pivots well that's not going to

work so we're going to talk about all of

those topics today U we're going to look

at some charts as well um but basically

this lecture about how to make you a

better Trader by showing you how to be a

more objective person we need to rid

ourselves of the subjectivity and bring

in the objectivity it's going to take a

little bit of experience a little bit of

practice but it's worth it it's well

worth it all right great lecture if you

like these lectures click that like

button smash Hammer that subscribe

button I'm Jared Wesley of live

Traders let's get to

[Music]

it

this week's lecture topic is who are

you as a Trader a lot of people think

they are something they are not um and

that's just a general I guess uh

subjectivity we all have but at the same

time who you are outside in the outside

world uh is not necessarily who you are

as a Trader you guys hear me say it all

the time it's not a new analogy but just

cuz you can wait 2 hours for a ride in

Disney World doesn't make you a patient

person as a Trader it might make you a

patient person because you can wait 45

minutes for that silly St cup of

Starbucks um but as a Trader could be

completely and totally and utterly

different so we're going to talk a

little bit about that today um who you

are what's required to be successful um

and really going to ask you some

questions about whether or not you are

this or you are that what you think you

are versus what you really are and the

only way to know that obviously is to go

out into the arena you can think you're

something but till you're actually in

the arena you know what I mean like the

Mike Tyson statement everyone's got a

plan till they get punched in the mouth

well that's what trading is when the

market punches you in the mouth for the

first time you're going to realize oo

maybe just maybe I'm not the person I

thought I was uh does this mean that

your hopes and dreams are crashed and

diminished and crushed and you can never

be a great Trader not at all it doesn't

mean that at all and that's one of the

things we're going to talk about today

just because you are wrong about who you

are doesn't doesn't mean that that's the

end of your trading career um so let's

dig on in and

um and talk about this

topic why most people fail trading is

about the search for truth okay

objective personal truth rid yourself of

subjective bias find objective truth you

see the last two parts of that are the

problem right subjective bias is a very

difficult thing to overcome because

sometimes and I hate using this word

because it's a popular catch word it's

unconscious bias sometimes it's just

unconscious bias you don't even realize

you have it but in trading you will

learn you have it if you track your

trades because your tracking Spreadsheet

will show you what you're actually doing

and this is where I also tell Traders

All the Time video record yourself take

OBS open broadcast system it's free

download it and record yourself go buy a

cheap microphone a little Logitech

camera and record yourself then there is

no subjectivity it's the objective truth

the person on the other side of that

camera is you okay and you are saying

and doing those things but trading is

really about the search for truth search

for personal truth objective personal

truth and that's the problem the

objective part most people just aren't

objective okay so today we're going to

talk a little bit about some of the

biases that you guys may or may may not

have and some of the things that you

think about your own trading like here's

here's a good one for example and I know

I harp on them all the time but I feel

like I can do this um someone once said

in the chat room oh it's an odd number

so that's the high of the day if it's an

even number it can't be the higher the

low of the day that's not an objective

truth you need to tell me over the next

3,000 trades every day at least for at

least a 6 month or 12 month period every

day check the high and low of the day

for all 6,000 or 3,000 of those traits

every day and then you can come back

after you have a 100,000 examples

literally and then you can tell me it's

an objective truth otherwise it's just

subjective Tuesdays are bad well that's

subjective unless you have the data over

years not months cuz there's not that

many Tuesdays in three months you need

to tell me that that's an objective

truth do you see where I'm going with

all this guys biases that you don't

think you have you have right you look

at the market a certain way and the

Market's just not that way because oh

you had two losing trades beforehand so

now you're a little bit subjective on a

trade that's crap but you think it's

good because you lost on the first two

trades So today we're going to talk a

lot about that and here's kind of the

first one right what do Traders really

do what do we really do do we sit in our

pajamas well some people might do we

gamble like Casino you know people at a

casino are we like Gordon

gecko none of these things are what

serious Traders do none serious Traders

don't trade from their

pajamas serious Traders don't gamble

serious Traders at least as Traders

aren't stealing information right we

don't we aren't any of these things all

right if you're being objective about

now the world may see us this way and

sometimes you might see yourself as

Gordon gecko but you're nothing like

what he's doing

right some of you probably look like

this on the right hand side right some

of you probably are gambling and I

guarantee a 100% chance some of you

listening are still in your pajamas and

you might even still be in

bed but you're not serious if you're

doing any one of those three things

okay you're not serious if you're doing

any one of those three things so you

guys have seen this slide all right

you've seen this slide from professional

trading strategies

what type of Trader do you want to be

it's a great question but when you

answer the question you have to

understand what it takes to be that

Trader does that make sense like there's

a lot of different types of Traders out

there right there's a lot of different

ways to make money in this business but

if you want to be a certain type of

Trader there's considerations that need

to be made personality traits time

constraints Capital constraints

intangibles we're all a little bit

different intangibles are something you

might be good at and someone else might

not be someone might be a very patient

person they might be a very jittery

person they might be a very angry person

they might be a very positive person

they might be a calm easygoing person

they might be you know

ADHD okay might have the attention span

of a net I don't know but you do and

this is where the objectivity is

Paramount because if you're lying to

yourself you're going to lie to yourself

about who you are and that's going to

change what type of Trader you can be

right so some people will come in and

say well I want to be a Trader that

trades two hours a day and manages on

15minute

pivots well what might be possibly be an

issue with that I want to trade two

hours a day that's the time constraint

okay I want to manage on 15minute

pivots what what might be an issue with

that guys talk to me what might be an

issue in that scenario and we haven't

even gone deep yet this is just surface

what might be an

issue talk to

me I want to trade two hours a day and I

want to manage on 15minute pivots

exactly Ryan 2 hours is not probably

enough for 15minute bars right Jacob

side of rice Rouge that could be very

difficult sure for some trades that's

going to work but for a good number a

large portion call it 50% of your

trades 2 hours isn't enough I mean let's

let's talk realistic here let's say you

want to take buy setups well you're

probably looking at at least five or six

bars correct three bars up two or three

bars back five or six bars 15 minutes

you're already at an hour and a half

before you've even entered the

trade you're already an hour and a half

before you've ever entered the trade

hasn't even pivoted yet on your

management and you're already an hour

hour and a half into the day so that

just doesn't jive with what you want to

be with the type of Trader you want to

be it may jive with your personality

15minute pivots it may meet your Capital

restraints and intendance but it doesn't

meet your time constraints if you have

to somewhere else to be or you have to

go after 2 hours then you simply cannot

use that type of approach okay let's go

back to the drawing board be objective

again and figure out what we need to do

to sort out that 2hour time constraint

that I have and then I can work

backwards from there all right maybe

five minute charts maybe All or Nothing

why why All or Nothing well maybe I can

still use 15-minute charts but instead

of pivots I can use all or nothing cuz I

can set a bracket order and leave

literally set it to sell at the end of

the day today okay now I've overcome one

of the issues right so you need to think

about these considerations when you're a

Trader let's be honest guys come on

let's just talk like

adults did any of you actually do this

when you started

trading I'm raising my hand right now I

didn't I didn't did you think I looked

at oh wow this type of management with

this uh time frame wouldn't really meet

the constraints I have before I have to

go back to work and oh yeah I'm super

jittery but 15-minute pivots they'll

work I didn't do any of this crap none

of it so this is why I'm you know so

strong about it with you guys so that

you can at least shed some light on

things that maybe are holding you back

from being more successful and I'm not

just talking about management I'm

talking about your whole

approach to trading right Capital

restraints example I want to average uh

hypothetical I want to average seven

trades a day

okay well you might think for

example seven trades a day on $5 risk no

problem money is not a problem but what

happens when you get to a $100 risk or

$200 risk or300 or whatever the number

is and you want to average seven trades

a day you might have a problem you might

have a buying power problem especially

if those seven trades are large

management trades where you're looking

for three or four our targets if you're

trying to get in and out in and out scal

scal scal scal maybe it's okay but if

you're trying to get two or three R and

you're in the trade for 30 minutes or an

hour and you which means you're going to

be in three or four or five positions at

one time that could be a problem with

capital

constraints it's an issue another

Capital constraint yep I figured it all

out to replace my salary I need 150

Grand a year okay well you're a account

might not be big enough to realistically

do that maybe you have a $330,000

account that means you need to make

500% per year that's not terribly

realistic I mean if you're risking 2 or

3% that might be realistic but not at

half a per or

1% so you might be that person that has

two problems okay the two problems you

might have are I want to take seven

trades a day and I want to make

500% well both of those are a problem

you probably don't have enough money in

your account to take the seven trades a

day you need and you probably don't have

enough money in your account to risk the

amount of money you need to risk to make

500% now you have two

problems so all of these things factor

in to whether or not you're going to

likely be a successful Trader but most

people don't even spend 5 Seconds

thinking through this and then the

personality trait one is is usually the

hardest one to overcome look time's easy

like that's just the math equation I

have a job at 11:00 I need to leave the

house by 10:30 great that's easy you

have an hour to trade okay it's pretty

cut and dry Capital oh I got a 50k

account this is how much I pretty cut

and dry personality and intangibles are

a little bit more

subjective they need to become objective

maybe for

example you want to take those seven

trades a day and you want to do it on a

one minute chart but maybe you're

terrible with order entry

maybe you're terrible with math what do

I mean by that you don't have enough

time to figure out the stop the entry

and the target quick enough to catch

those one minute trades that's an

intangible that doesn't jive with what

you're trying to become so you might

want to move up to five minute charts to

give yourself a little bit more time to

develop the order entry or 15minute

charts do you see where all these

factors come into play people just throw

at the wall and hope it sticks now

they wonder why they're not doing well

because they're not actually working

towards being the trader they can be

they're working towards a Trader they

think they can be but it doesn't jive

with their personality or their time or

their capital or their

intangibles okay it's a very big deal

and you need to really give it some

serious thought when you're trading okay

let's move on a little bit okay

experienced Traders might use a

percentage of your account but new

Traders use $5 risk this is great and a

lot of you you know this but what

happens when you do progress and you do

move to 50 or100 or $500 will your

account be big enough to sustain that

level of risk with the style you're

currently using because one of the

things you don't want to have to do is

change your style later on and I say

this you guys know where I'm going with

this sometimes a Trader will say yeah

well it's only $5 risk I'll say to them

well gez that stock is very illiquid it

only does you know 200,000 shares per

day yeah but I'm only trading $5 risk it

doesn't matter well what if you're on $5

risk for 6 months and then you move to

10 then 20 and all of the sudden it's

been two years and you're so used to

trading2 200,000 share stocks but now

you're doing $300 risk you can't trade

those stocks anymore they're too spread

they're too whippy they're too ill

liquid but you've been you've taught

yourself to trade ill liquid stocks for

two years

start how you want to be later on does

that make sense trade liquid stocks from

day one don't trade those crazy spread

stocks get in the habit of doing the

things you're supposed to be doing now

so that later on you don't have to make

any other adjustments it's hard enough

this business you don't want to have to

make these adjustments all the time

right new Traders spend a couple weeks

on paper go to small risk all right work

your way up why do we work our way up I

know it sounds so stupid and obvious we

work work our way up for two reasons one

so you don't lose money unnecessarily

right that's the number one reason I

would tell the same thing to Jeff beos

start small two you're learning so much

about yourself during this process and

guess

what it's cheap the education is cheap

if you risk too much money the education

could be very very very expensive and a

lot of you have found that out the hard

way okay frequency some trades may be

successful but only happen very rarely

right you can overcome smaller risk

levels with higher frequency where am I

going with this this goes back to what

type of Trader do you want to be for

example I'll look at Ali Ali doesn't

take that many trades we've you know

done a good job here after mentorship

he's increased frequency a little bit

but probably not exactly where you want

to be yet so for example if you take one

trade a day 20 trades a month well let's

roll it

back okay Jared I am this is the Trader

I want to be I want to be a Trader who

averages 20 a month I'll give myself one

month of year vacation so I need 220 r a

year okay well how many trades you think

oh one trade a day so you're going to

take 220 trades and you want 220 R you

want basically a 1.0 expectancy you're

basically God yes you're basically the

Wilt Chamberlain of trading you're the

Wayne Gretzky of

trading no to to go into this business

with that level of expectation is absurd

and it's a recipe for failure and then

why that's why the one of those slides a

couple slides ago this is the reason

most Traders fail let's go back real

quick let's go

back trading is about the search for

truth objective personal truth well to

know that you need to be the Wilt

Chamberlain Michael Jordan Wayne Gretzky

of

trading is not a a realistic goal you

might become that but to start off with

that is craziness don't you want to be

able to make some mistakes and still hit

your goal yes the answer is yes cuz we

know we're not perfect but if you want

to make 220 r a year on 20 trades a

month good luck is all I have to say

it's not realistic so you need to figure

something out you either need to say

okay you know what it's not about the r

Jared I need to make

$220,000 a year well now we can work

with that because now we can say all

right well maybe on 20 trades a month we

can get you to a risk level that's

acceptable enough to hit that Target

with a lower

accuracy right a lower batting average a

lower sharp or win loss ratio right so

now maybe maybe just hypotheticals guys

maybe you only need to win maybe seven r

a month maybe you only need seven r a

month well that's okay that's a 33

expectancy well get your risk level to

$3,000 and boom now you're hitting your

$220,000 goal I'm not saying you're

starting there but now you have a

realistic reasonable path to that goal

but now we have to go and wind it back

do you have an account large enough to

risk $3,000 now remember you're not

there yet but someday you want to be

there is your account large enough to do

that no it's not okay well now we have

to go back to the drawing board again

okay how do I make

$220,000 in 2 hours a day managing on

two R All or Nothing with one trade a

day oh well you come and you're

like 1 plus 1 doesn't equal two

anymore so something objectively has to

change you either need more trades or

higher risk but we know you can't do

higher risk cuz you already said you

don't have an account big enough so now

we need a high higher frequency can you

go from 20 trades a month to 30 or 40 do

you see where I'm going with all of this

guys now I consider it to be obvious

because they've been doing this 20 years

but to a new person they're not thinking

about any of this stuff how do you get

from where you are to where you want to

be and is it

reasonable I don't mean

perfect no one's perfect

so accept the fact

allow for the fact that you will make

mistakes can you still hit those goals

go back again to the slide all right I

want $220,000 a year all right do I have

the capital to do it I don't know do I

have the time to do it I don't know do I

have the personality to hold for two or

three I don't know then you got to check

off all those things and you got to kind

of reverse engineer it and go I know

what I want but what I want doesn't

coincide with what I actually am and

what I have I don't have the money for

it I don't have the time for it and I

don't have the personality for it all

right well let's tweak our goal till we

get our goal and our money and our time

and our personality to all match and we

all sing

Kumbaya okay and the other thing next

we're not even talking about experience

yet we're talking about down the road

right down the road not even today okay

so once Traders are beyond the point of

discipline problems larger risk amounts

are less dangerous and then you can

start looking at you can overcome

smaller risk levels with higher

frequency you can reverse that you can

overcome lower frequency with higher

risk levels but that's down the road

okay it's like any business right if

your restaurant only has 10 tables

you're not going to have 25,000 Revenue

that's right unless it's the finest

restaurant in the world and it's a

$1,000 a table right where it's $500

ahead but you're right Oli unless you're

in that fine dining experience nou or

something like that or what is that Jiro

in Japan or whatever you're not getting

there so now you have to rework you have

to rework something you either have to

add more tables to the restaurant or

increase prices on the menu or

both and then or work backwards open a

second location simple math right so

anyway do not make runit decisions

during the trading day this is kind of a

little off topic from what I was talking

about U there's no such thing as a great

play Beyond how great is defined in your

plan no one trade is no better than

another trade it's not okay the idiot

always thinks things are great In the

Heat of the battle okay oh that's a

great idea I need to take it let's take

a step back okay now guys duh

pts there are lots and lots and lots and

lots of different ways to get to the

same goal now patterns have different

expectations is the main point of this

slide this slide isn't about what a

pattern is here's a buy setup here's a

wedge here's a turnaround bar here's a

breakout here's a threeway it's not

about that it's understanding the

expectation guys what's the expectation

on a breakout what type one word answer

what type of pattern is a

breakout what type of pattern is

this thank you

Brian it's a momentum pattern it's a

momentum play okay now why am I asking

this

question

because if you're somebody for example

that has no patience

whatsoever

then a wedge pattern or a buy setup

might not be the best pattern for you

because it's very common for a buy setup

to trigger chop around and eventually

work its way to your target

breakouts good ones don't do that it's

possible that that happens but that's

not the modus operandi of a good

breakout so what's the whole purpose

here well if you're that jittery person

I'd stay away from buy setups I'd stick

with those three bar plays and those

breakouts right because you're the type

of person who personality-wise is

probably not going to do so well on a B

on a big pullback right you go oh my

gosh oh my gosh oh my gosh it's going

against me what am I going to do right

that's your person Al ity so pick a

pattern pick a play that doesn't have

that that frequently doesn't have that

it should be a hit-and run trade get to

that Target

quickly okay so understand the type of

pattern that you're taking climactic we

know that often times they take two

entries are you willing to get back into

a trade after you stopped out if you are

then maybe a climactic is for you

climactic are wild and Whippy are you

okay with that and then hold on we're

not done what if you're okay with that

on $50 risk but $5,000 risk scares you

okay hold on we got to wind it back now

remember we talked about personality

traits time constraints all those types

of things frequency well now you have a

problem now you've been trading

climactic for a long time and you feel

comfortable until a certain list certain

risk level happens now you're like yeah

that pattern scares the bbes out of me

because I know what slippage is like on

a $100 risk imagine what it's like on a

$1,000 risk or $10,000 risk I don't know

if I want to take climactic anymore

because they're so wild and Whippy I was

okay with it at 100 but now oh my gosh I

took one I took a half hour slippage on

it do you want to have to go back and

recreate how you trade after three years

or two

years probably not

so know that if you choose to tra

parabolics and climactic that this is a

wild and Whippy pattern and you know

someday the goal is to get your risk

from $5 to five or 10,000 that's the

goal understand I know I know you could

be objective or subjectively saying yeah

but I'll be ready by then that's what

most people will say but I'll be ready

by then and maybe you will maybe you

won't only time will tell right but

these are things you need to consider

the level of slippage you could take on

parabolics the sheer infrequency of

parabolics they just don't happen that

often so if you choose that pattern you

have to understand that your frequency

is going to be low and it's going to be

wild and Whippy when you do take

them understand the expectation because

every pattern is different and how does

that meld or mold into your personality

and your time and all of those things

okay there's just a lot of things to

consider when you trade and most people

just don't they're like yep going to be

a Trader threw some money into an

account

YOLO I wish I were joking but it's

extremely common okay you do Martin but

let me give you an example you're

correct 100% correct you have to

condition yourself to that level but as

we talked about before the lecture

remember right before the lecture we

talked about 10 and $20,000 risk certain

patterns are more challenging it's hard

to get those kind of shares on a

breakout right because when it breaks

over this level they usually rip well

you're going to have to start

anticipating more and more and more and

lower and lower and lower getting into

them because you're not going to get

filled over that number right same with

a parabolic it's much easier on a buy

setup right they don't explode like

parabolics or or breakouts you see what

so while yes you're correct we all need

to condition ourselves to get to that

level there are some patterns that are

more and less conducive to certain

levels of risk and on that note also I'm

gonna use cliff and I think he won't

mind me using him Cliff is a one of the

best Traders you'll ever meet the guy

reels off 200 a year like it's Clockwork

chilling out okay

but he did $500 risk for five or 10

years I don't know a long time why he

wasn't ready for whatever reason

conservative nature with his his money

management approach whatever it was he

just wasn't

ready okay and it took him a long time

to get over it and he finally did now

he's at $1,500 risk and he's killing it

and I look at it and go man should have

been doing that sooner but he looks at

it and says I wasn't ready see he was

objective about it now were there things

he maybe he could have done to push the

Readiness right expand his par maybe

maybe but who am I to tell him he's a

great Trader I can't tell him you're

ready you

know he finally got to that point he

finally got to that point and now is my

goodness best month he's ever had in 15

20 years of trading it just had it last

month I'm not surprised why am I not

surprised because he's the same Trader

he was two months ago 3 months ago so it

should carry over to the higher risk

level it was just just a question of

would he break his plan for me there was

no question there because Cliff doesn't

ever break his plan or almost never

breaks his plan so to me making the more

money was just a byproduct of higher

risk cuz cliff in my mind has always

been capable of it and

now the world is his oyster he you know

Jeff Yates always says once you expand

your mind it can never retain its

original shape Cliff's mind will never

retain its original shape and I bet you

guys

going from 1500 to 2,000 will be quicker

than it was from 500 to 1500 because I

think he's seeing that you know we'll

see time will tell but he's a

machine but he was objective about

saying I'm not ready now here's a few

examples from recent okay there's a

method to my madness here all right

Roku one minute breakdown with relative

weakness made three grand on this trade

okay this wasn't I don't know a month or

two ago something like that nice pattern

right breakdown entry 9065 stop loss 92

but this isn't what this is about sure

you can look at this and go wow the

market turned weak and Roku went lower

and I made money great great great who

gives a who cares the question is

simple selling at half selling half at

half R that's a scalper's approach

that's what I did I sold half of my

position at a half of an R gain okay you

can see it right down here you could see

my order right there 90 04 all right I'm

in this thing roughly a 9065 that's a 60

C gain roughly on a $130 stop $135 stop

so roughly a 60c gain okay 65 Cent gain

whatever that's a half of an

R is that a reasonable approach to

trading I don't know is it and the

answer on every one of these and I'm

going to give it to you early is

it depends it depends

on your personality traits your time

constraints your Capital constraints

your intangibles what are you really

good at for most

people for many people selling half half

of an R is a very difficult approach to

trading why simple because they don't

win often enough to overcome such a

small Target they simply do not win

often enough to overcome such a small

Target okay let's try it again selling

all of it for a half hour gain stupid is

this little farest Gump action here our

half our targets

insane entry

4255 stoploss 4180 nice little ShakeOut

tail in U you can see my order 4255

right there 7,000 shares of this thing

right here okay it's Moving on Up Moving

on Up Moving On Up the order is set in

the system to

sell at 4291 which is a half hour game

right that's what a 36 Cent Target or

something like that on a 72 Cent stop is

that nuts is it

crazy I don't know you guys tell me is

it

crazyy it

depends can can you win enough to offset

when you lose

next can you handle while it may be rare

and

unusual can you handle taking a full

loss knowing that you need two trades to

get back to break even can you handle

that I mean this bats like

80% but on that 10 or 20% where you stop

out

imagine imagine you had backto back

stopouts now you need four winning

trades to get back to break

even can you handle

that made me a lot of money in January I

was doing a half R All or Nothing that's

it half R All or Nothing made me a lot

of money in January I mean I wish I was

doing two hard cuz that made even more

money okay exactly Oli what does the

back back testing say what does your

personality say what does your time

constraint say we're looking at every

factor in here we're putting all of

those things together and we're still

going to back test it and we're going to

try to find wait for it objective truth

that's what we're looking for I don't

want

subjectivity I want to know the actual

truth I don't tell I want to tell me

what you think show me what the numbers

say

Okay

Tesla two minute three bar play pretty

nice pattern $5,000 gain on Tesla r1r

targets

insane you guys see where I'm going with

this I'm slowly moving in a direction

slowly selling for one r one R All or

Nothing is that nutso is that

crazy I don't

know what do the stats say what does

your personality say what does your time

constraint say what does your tring

spreadsheet tell you how do you feel

when you're doing

it I don't know I'm not you I not you

okay right the you know the comment that

somebody's making is it works as long as

your batting average is high enough

that's true but

Antoine can you have a high high enough

batting

average that's the question this a

$64,000 Question can you have a high

enough batting average are you a good

enough stock picker

to make one R

work goes back to

again what's the objective truth what

are the stats telling you okay so

there's a 5k gain there great keep keep

going snow from was this yesterday yes

it was

yesterday is a hybrid approach

insane this was a very nice pattern

173 you know three minute four bar play

I mean is a just a beautiful pattern

okay I don't know why this is stop loss

is so off there I apologize the stop

loss is actually right here so my

apologies there but nonetheless not the

point okay I got a late

fill this stock did eventually work and

this thing went down to like 166 just

kept on going and going and going

okay that hybrid approach in this case

was half at one R half at 2

R half at 1 R sell move to break even on

the stop loss sell the back half a two

R is that insane I don't know what do

the statistics say okay next

next what about this meta 2minute buy

setup gave it extra room I gave this

trade a lot of room due to market

conditions and almost stopped it held

481 by 22 then ended the the day not at

Target but still up 3200 what's the

question I'm going to ask the question

I'm going to ask is this are you

prepared to hold a trade all day I did

are you comfortable waiting three to

four hours for a Target it goes back to

the time constraints do you have a

management that you can literally place

a bracket order set it and walk away

from if not then that management

approach doesn't meet your time

constraints this buy setup literally

lasted all day I exited at 3:45

p.m. do you have that kind of time I set

a bracket and walked away right I did I

set a bracket and walked

away

okay yeah comfortable with it but don't

like it they're two different things as

long as you're not breaking your plan

right Brandon that's all that matters

but some people let's be honest look

come on guys let's talk like adults for

a second you know you've done this

before you set your bracket order and

you go and you leave for work and what

do you

do you pull out this little device

called a an iPhone cell phone and you're

looking at it you're looking at it

you're looking at it oh my gosh well

you're supposed to be at work right now

you're supposed to be doing other things

yes exactly right Sophia exactly they

stress about it they're out there having

lunch with their kids and they're

they're literally instead of enjoying

the moment with their family they're

thinking about the stock and trade that

they're in in you don't want to do that

so you need to understand personality

wise can you handle

that or you might have a rule by I don't

know say 11:00 if it doesn't hit Target

by 11:00 I hit market and walk away

maybe okay now let's take it one last

step further one

more how would you

react okay if your trade hit

Target

but didn't fill you then what's your

reaction printed 300 shares none of

which were mine then what is your

reaction what's your

reaction can you handle that or you

going to

explode you all of these things again to

be fair are things you might not fully

objectively

know

until you've experienced them okay until

they happen to you like I always use the

in the chat room I said nobody cares

until it comes knocking on your door

right well what happens when a stock

goes right to the penny at the penny on

the penny and then boom doesn't fill

you exactly punch the monitor throw the

mouse cry that's okay you're not

destroying it when you got to figure out

how can I mitigate this if you're that

person maybe set a bracket and L truly

walk away and don't watch it don't look

at it

okay yeah mad for a second then

indifference happens I'm mad for more

than a

second but that's 5,000

bucks right I'm mad for more than a

second but you have to cope and

understand maybe my risk is too high or

maybe this approach isn't for

me so the key is this know

thyself having a trading plan that is

conducive to your personal it style is

crucial do not ignore it most Traders

chase money without ever giving thought

to personal here let's let's just put

this in freaking pink let's do this

let's underline it let's italicize it

let's read it out loud together most

Traders chase money without ever giving

thought to personal strengths and

weaknesses it's possibly the single

biggest reason Traders fail lack of a

trading plan that fits them and that's

the key key part not lack of a plan lack

of a plan that fits them okay important

points track all your trades make sure

to have a column that includes actual

results versus trading plan results try

not to adjust your plan too often those

little increments are fine adjustments

are fine one bad month of trading does

not equal a bad trading plan and a lot

of people feel like they do I've seen a

lot of Traders Jared I lost sixr last

month I have a bad plan well one did you

follow the bad plan okay and it may not

be a bad plan right trading plans only

work when they're consistently followed

over long periods of time we're odds

Traders so let the odds play out in your

favor trust the plant and Ali tells you

guys all the time variation is a process

killer variation is a process killer you

keep changing a little or almost

following your plan here and

there it's kind of hard to know what's

really actually happening

okay consideration

realistic time it will take to succeed

is 1 to 3 years plan for it plan for it

okay don't think you're better or more

prepared because of Prior success you're

not you're not some things might present

themselves like Ali for example is very

analytical he's put together some some

really wonderful spreadsheets so that

has helped him but he still had to learn

who he was as a traitor was he an

objective person he knows now for

example that he is very very precise

with his approach to the point

where he doesn't take enough trade

sometimes he's working on that and doing

a great job he's increased his frequency

and it's helped him but my point is is

we still have to go through things

experience things to know things okay we

think something but until we experience

it we won't know how we actually react

to it okay profitability will come

slowly and at a small level in the

beginning right therefore have a

secondary source of income part-time job

all those things to what take the stress

away from needing to make money as a

Trader especially when you're new

eventually you'll become like a robot

and it'll just be automatic but those

first couple few years you don't want

that kind of stress the business is

stressful enough

okay and this is one I don't think

people spend enough time expect to make

mistakes I know people go Jared that's a

that's a negative attitude it is not a

negative attitude expecting to make

mistakes yes it's going to happen I to

my knowledge to my knowledge I don't

believe Tom Brady has ever had a

game where he's had a perfect game and I

don't mean a perfect passer rating I

mean a perfect game where he was 30 for

30 throwing the football I don't think

it's ever

happened what does that mean there's a

few mistakes whether it's a teammate's

mistake or his mistake mistakes were

made they did a lot of great things

things but you you're going to make some

mistakes for me today I had a down day

today but I had 15 of 16 up days 10 days

in a row up I'm going to have a down day

I'm going to make a mistake or take a

trade that doesn't work oh well so I all

be all depressed today no I should be

like hey reversion to the mean that's it

right inconsistent will be normal in the

beginning our goal is to fix that and

become consistent feeling the roller

coaster will be normal in the beginning

tell me I'm wrong you guys have had days

where you had the best weekend ever

because Friday was a great trading day

you had the worst weekend ever because

Friday was a minus three hour down day

and you it literally ruined your whole

weekend you'll get to a point where it

just doesn't

matter by the time you close your

platform down on Friday good day bad day

the weekend's totally separate but when

you're new but when you're

new two bad days Thursday Friday just

Friday could ruin your whole

weekend that's a novice approach

okay understand what's required hard

work dedication persistence continual

education combined with market

experience anything less just won't be

good enough guys strive for p Perfection

Cliff has a great blog post that you

guys want to check out there exactly

Brandon you say don't get that way

anymore but you did and I did when I

started I was like a little freaking

roller coaster okay you guys have seen

this slide before too plan for Success

not failure the more objectively and

accurately you define yourself as an

individual and build your trading style

around it the more successful you'll be

and that's the key build your plann

around who you are objectively not who

you think you are subjectively okay

remember outcome

goals without process goals are just

pipe dreams that I use the same analogy

every time I I do this okay

it's the Lamborghini on the wall with no

job it's the Lamborghini on the

wall with no process to own it she's

like yeah I think I want that someday

well how are you going to make that

happen it's like the retirement

conversation we had yesterday

professional wealth building strategies

you want to retire at 40 or 50 or 60

great how are you going to what is the

process that you will need to go through

to have enough money by that age so that

you can retire

nobody ever thinks about it they just

wake up and go I hope one day I'll have

enough to retire well hope is not a

strategy put it on paper trading is no

different so key points available time

your personality style your financial

resources and your personal preferences

okay and again last

slide trading is about the search for

truth objective personal truth rid

yourself of subjective bias find

objective truth you will have to go

through some subjectivity to get to

objectivity right you believe a certain

way until you're proven it's not that

way so your tracking spreadsheet tells

you no that's just not true now you have

a new reality the question is will you

accept the new reality because if you

don't accept the new reality you can't

change it does this make sense if you're

subjective and then you see something

you're like wait wait that's that's not

what I thought it was but if you're

still in the denial

phase you're not going to be able to

change it and that change is the

progress needed to become a successful

Trader okay we all have to go through

this every one of us none of us are

immune to this every one of us has had a

a a moment in life where we're like well

I didn't know that or I thought

that was true but I was just flat wrong

it's okay there's nothing wrong with it

in fact it's a good thing it shows

progress the fact that you're willing to

say I was wrong is progress and now we

can make meaningful change to help

become a better Trader more successful

more profitable hopefully right so this

is what it's really all about the search

for personal truth and it has to have

some level of OB activity and the way to

get there is to track your

trads video tape yourself trading take

notes go back and rewatch it take notes

on it have other people watch it talk to

an accountability partner get a trading

buddy do all of those things so they can

say hey look I know you thought this was

good but let's review it let's talk

about why you feel that way and how you

got to that decision to take that buy

setup that really wasn't a buy setup how

did you come to that decision let's talk

about it so that next time when you're

in the same position you'll think

differently and then by doing so you'll

be a little bit more

objective so I hope that makes sense to

you guys it's a very deep topic but a

simple one at the same time right

there's a lot of introspection that

takes place but the broad concept is

simple we need to be better at our

process so that our outcome goals will

be greater all right so hope you guys

learned enough to become better Traders

I hope this lecture will help you guys

be more profitable I'm Jared Wesley of

live Traders we'll get back at it again

next

[Music]

week