How To Create a Trading Plan that Prints Money in 2024

Summary

The video emphasizes the importance of maintaining a trading journal for consistent profitability in trading. The speaker explains how journaling helps both psychologically and technically, by encouraging better trade decisions, cultivating awareness, and analyzing performance data. They share personal experiences, highlighting the value of refining trading strategies based on data insights, and discuss the improvements they've made through journaling, such as identifying patterns and holding winners longer. The video encourages simplicity, practice, and continuous improvement, offering a free template and one-on-one coaching to assist traders in developing their own profitable systems.

Takeaways

• 📊 Journaling trades is essential for consistent profitability, with psychological and technical benefits.
• 🧠 Psychological benefit: Journaling cultivates awareness, making traders more conscious of the decisions they make, leading to better adherence to the trading plan.
• 📈 Technical benefit: Reviewing trading data helps identify patterns in winners and losers, enabling traders to refine their strategies based on real results.
• 📊 Identifying errors such as analysis paralysis is crucial. Overthinking can lead to missed setups that fit the trading plan and edge.
• 🛠️ Refining a trading strategy involves analyzing data like entry time frames and types of trades (continuation or reversal) to improve win rates.
• 📈 Tracking specific variables like entry time frames can reveal patterns. For example, focusing on hourly time frame entries increased win rates to 73%.
• 💪 Journaling builds confidence by providing concrete evidence of past profitability and showing areas of improvement.
• 📉 Managing trades involves knowing when to hold and add to winners rather than closing early due to risk aversion.
• 🔄 Trading is a skill that requires a continuous cycle of practice, review, refinement, and improvement.
• 💼 Using tools like Notion can help organize trade journals by adding screenshots, tracking trade setups, and reviewing results in-depth.

Q & A

What is the main tool that the speaker attributes to consistent profitability in trading?

The main tool is a trading journal, which the speaker has been working on for two years. It helps track trades, analyze performance, and refine strategies, leading to consistent profitability.

What are the two main reasons for keeping a trading journal according to the speaker?

The two main reasons for keeping a trading journal are psychological and technical. Psychologically, journaling helps traders take better trades and cultivates awareness. Technically, it allows for data review and refinement of trading strategies.

How does journaling help from a psychological perspective?

Journaling helps traders take better trades as they are aware that they need to log their decisions. It also cultivates awareness of common errors, such as analysis paralysis, which can hinder a trader's success.

What technical benefits does a trading journal provide?

A trading journal allows traders to review their trades, understand why certain trades were profitable or unprofitable, and identify areas for improvement, such as maximizing winners or cutting losses earlier.

How does the speaker use trading data to improve their system?

The speaker uses trading data to analyze specific setups, time frames, and trade types. For example, by reviewing their success with continuation setups and hourly candle trades, they improved their win rate from 47% to 73%.

What are the main errors the speaker identified in their own trading?

The speaker identified that they often close trades early due to risk aversion, which stems from not wanting to give up profits. This led to missed opportunities and reduced profitability.

What is the speaker's strategy for refining their trading system?

The speaker's strategy is to collect data, refine the system based on insights from the data, and then continue practicing with the refined system. This iterative process is seen as essential to becoming consistently profitable.

What is the significance of the first 10 to 15 minutes of the hourly candle according to the speaker?

The speaker notes that their highest win rates come from trades made in the first 10 to 15 minutes of the hourly candle, particularly with continuation setups. This time period provides the best trading opportunities in their system.

Why does the speaker believe that overanalyzing trading data can be detrimental?

The speaker advises against overanalyzing trading data to avoid overfitting. Instead, they suggest looking for general insights that can lead to improvements without making the system overly complex.

How does the speaker use correlated pairs like Gold/USD and USD/JPY in their trading strategy?

The speaker uses correlated pairs, such as Gold/USD and USD/JPY, as confluences. If one pair shows a strong signal (e.g., USD/JPY being bearish), it can support their decision to take a trade in the opposite direction on the correlated pair (e.g., buying Gold).