Hello Fellow trader
in this thread I'm trying my best to answer all those in numerous questions through a clear and no non sense Process
Why 94% of people loose money in trading ?
Well , trading is a skill and which can be learned & mastered but there is a process to it
its like a been a cardiologist or any athlete.
now you think if god forbid if you need to a heart surgery would you go to a guy who would say like “ hey look i have seen this awesome and detailed Youtube video & have searched google I did my research know how it works i can operate you no worries “ i can show you a demo and fake video testimonials or i can simple provide signals so that you can do it your self
and would you allow him to operate you? Or will you do it yourself?
But when it’s come to trading most of the people are doing the same
Thankfully cardiologist follow a long process before they can call themselves a cardiologist and are allowed to operate
but same is not a true when its come to becoming a trader as people think
Its just a skill acquire it and earn for Life. It’s that simple.
Do you want a reason why 84- 96% fails in trading? well this is the reason and no body is talking about
most of the people are chasing after money but dont want to focus on THE PROCESS
I am sure that what I’m going to share in this article will not be practiced by everybody, rather only 4- 12% of people will actually DO IT and only those who really want to succeed and want to become a consistent profitable professional trader(Cppt). Alrite here is the process.
Step 1 -Find a superior trade setup
Although i dont use all the “ retail concepts” like popular indicator like averages , trends, supply and demand or support and resistance etc. but most of the newbie will use it. well, even if you use these strategies you have to be double down on the importance on risk management in your trade setups and psychology part of trading, if you seriously want to make regular money trading . Best thing would be to learn under a Mentor who can guide you this will save you years of disappointments and lots of Losses in long run ( those who are jumping from one signal services to another will understand true meaning of it )
A Trade setup should have a VERY WELL DEFINED rules about
a. When to enter market?
b. when not to enter in market
c. when to exit?
d. Risk management parameter to be deploy?
e. Trade management
superior trade setup tends to make money even if you are wrong.
Step 2 Backtest Backtest & Backtest
yes back test it like crazy DO IT MANUALLY and DO IT YOURSELF
Please do not employ the those automated back testing software like streaks(India) and or mt4 or other numerous pricey software for fx etc. Trust me you DONT need those or any of these fancy pie charts too understand the setups . you want to do it manually, a market replay button is all you need i use trading view for this (so is my mentor) another free alternative is to go with Gocharting but its not that reliable.
Doing it manually will serve two purposes first setup will get tested and second your mind will start trusting it ,
you will keep panicking though out when you will deploy this setup in real market with real money. otherwise every quick candle against your trade will you will panic , create a self doubt like oh my god i think my stoploss is about to get and will loose confidence.
Step 3 Maintain Data
This should go hand in hand with step 2 . Your testing data should have
1. Date
2. time
3. day (hint: this will give you idea of seasonality of the setup)
4. chart screenshot Before
5. chart screenshot After
6 result: win/loose
7. Risk/Reward Ratio
8. Time taken to complete the trade( this will help you train your brain to practice patience needed for these trades)
we used to do it at-least for 2 month. but higher the better
For those who are lazy try to back test at least 50 test
and calculate the win rate Please do not test it for 1–2 days and jumps to markets on 3rd day with real money. Thats gambling not trading
you should follow the process.
Step 4 Grade your Setup
Before going forward you should calculate the win rate which simply mean
so you have grade the setup according to setups you have with you.
however i will share our standard
1.setup with win rate 90%-80% are grade A+
2. Setup with win rate 80%-70 are “A” Grade
3. Setup with win rate with 70–50 are “B” grade
4. setup with win rate 50 or below are “c” grade”
so if our data say setup is c grade we simply drop it there and do not proceed with it.
Step 5 Time to do Front testing : oh you thought this is it time to make money now? not so fast , Its time to do front testing so, open a demo trading account
and start testing, start taking the trades follow every rules that you have for the setups.
but WHY ? front testing seems like a sheer waste of time and energy. i already have a proven setup. isn’t it?
well in back testing you used the replay button and was not going through the experience of real time market condition
you want to train your mind and your executing skill while price candles are forming in REAL TIME.
As when you will be trading with real money you will execute the market in REAL TIME CONDITION ONLY.
So please start trading your “B” & higher grade setups. for a minimum of 1 month at least 20 trades (higher the better).
Compare the win rate of back testing data and the front testing it should be very similar.
If there a high difference between two data set , then you have problem may be this setup is not suitable for you. You want to trade ONLY YOUR A AND A+ SETUPS ONLY that's the key.
Step 6: Time to Download Money
ok Champ! Congratulation for finding your winning setups and acquiring all the necessary executing and the psychological skills to execute your setups. you can think it like your “PIN code for the ATM” which you can use for rest of your life. But you have to stick to your setup rules.
Yes! This will be your EDGE!!! Well doesn't that every books youtube etc. says you have to have an Edge in market to become successful in trading but nobody Cleary describe but what's is an edge? how to acquire it well now you have your own Edge & your answer.
Thank you for Reading
Manas Bagh
UpsideProfit.com
in this thread I'm trying my best to answer all those in numerous questions through a clear and no non sense Process
Why 94% of people loose money in trading ?
Well , trading is a skill and which can be learned & mastered but there is a process to it
its like a been a cardiologist or any athlete.
now you think if god forbid if you need to a heart surgery would you go to a guy who would say like “ hey look i have seen this awesome and detailed Youtube video & have searched google I did my research know how it works i can operate you no worries “ i can show you a demo and fake video testimonials or i can simple provide signals so that you can do it your self
and would you allow him to operate you? Or will you do it yourself?
But when it’s come to trading most of the people are doing the same
Thankfully cardiologist follow a long process before they can call themselves a cardiologist and are allowed to operate
but same is not a true when its come to becoming a trader as people think
Its just a skill acquire it and earn for Life. It’s that simple.
Do you want a reason why 84- 96% fails in trading? well this is the reason and no body is talking about
most of the people are chasing after money but dont want to focus on THE PROCESS
I am sure that what I’m going to share in this article will not be practiced by everybody, rather only 4- 12% of people will actually DO IT and only those who really want to succeed and want to become a consistent profitable professional trader(Cppt). Alrite here is the process.
Step 1 -Find a superior trade setup
Although i dont use all the “ retail concepts” like popular indicator like averages , trends, supply and demand or support and resistance etc. but most of the newbie will use it. well, even if you use these strategies you have to be double down on the importance on risk management in your trade setups and psychology part of trading, if you seriously want to make regular money trading . Best thing would be to learn under a Mentor who can guide you this will save you years of disappointments and lots of Losses in long run ( those who are jumping from one signal services to another will understand true meaning of it )
A Trade setup should have a VERY WELL DEFINED rules about
a. When to enter market?
b. when not to enter in market
c. when to exit?
d. Risk management parameter to be deploy?
e. Trade management
superior trade setup tends to make money even if you are wrong.
Step 2 Backtest Backtest & Backtest
yes back test it like crazy DO IT MANUALLY and DO IT YOURSELF
Please do not employ the those automated back testing software like streaks(India) and or mt4 or other numerous pricey software for fx etc. Trust me you DONT need those or any of these fancy pie charts too understand the setups . you want to do it manually, a market replay button is all you need i use trading view for this (so is my mentor) another free alternative is to go with Gocharting but its not that reliable.
Doing it manually will serve two purposes first setup will get tested and second your mind will start trusting it ,
you see no matter how many videos you see or books you read on swimming you won’t be able to gather the courage to jump in the ocean.
Manual process will help will help solve many future psychological issues you will have with yourself and the trade setup.you will keep panicking though out when you will deploy this setup in real market with real money. otherwise every quick candle against your trade will you will panic , create a self doubt like oh my god i think my stoploss is about to get and will loose confidence.
Step 3 Maintain Data
This should go hand in hand with step 2 . Your testing data should have
1. Date
2. time
3. day (hint: this will give you idea of seasonality of the setup)
4. chart screenshot Before
5. chart screenshot After
6 result: win/loose
7. Risk/Reward Ratio
8. Time taken to complete the trade( this will help you train your brain to practice patience needed for these trades)
we used to do it at-least for 2 month. but higher the better
For those who are lazy try to back test at least 50 test
and calculate the win rate Please do not test it for 1–2 days and jumps to markets on 3rd day with real money. Thats gambling not trading
you should follow the process.
Step 4 Grade your Setup
Before going forward you should calculate the win rate which simply mean
how many times in percentage your trades are actually profitable out of all the trade taken
since most the people will use the retails trading concepts it will be difficult get a very high win rate with it.so you have grade the setup according to setups you have with you.
however i will share our standard
1.setup with win rate 90%-80% are grade A+
2. Setup with win rate 80%-70 are “A” Grade
3. Setup with win rate with 70–50 are “B” grade
4. setup with win rate 50 or below are “c” grade”
so if our data say setup is c grade we simply drop it there and do not proceed with it.
Step 5 Time to do Front testing : oh you thought this is it time to make money now? not so fast , Its time to do front testing so, open a demo trading account
and start testing, start taking the trades follow every rules that you have for the setups.
but WHY ? front testing seems like a sheer waste of time and energy. i already have a proven setup. isn’t it?
well in back testing you used the replay button and was not going through the experience of real time market condition
you want to train your mind and your executing skill while price candles are forming in REAL TIME.
As when you will be trading with real money you will execute the market in REAL TIME CONDITION ONLY.
So please start trading your “B” & higher grade setups. for a minimum of 1 month at least 20 trades (higher the better).
Compare the win rate of back testing data and the front testing it should be very similar.
If there a high difference between two data set , then you have problem may be this setup is not suitable for you. You want to trade ONLY YOUR A AND A+ SETUPS ONLY that's the key.
Step 6: Time to Download Money
ok Champ! Congratulation for finding your winning setups and acquiring all the necessary executing and the psychological skills to execute your setups. you can think it like your “PIN code for the ATM” which you can use for rest of your life. But you have to stick to your setup rules.
Yes! This will be your EDGE!!! Well doesn't that every books youtube etc. says you have to have an Edge in market to become successful in trading but nobody Cleary describe but what's is an edge? how to acquire it well now you have your own Edge & your answer.
Thank you for Reading
Manas Bagh
UpsideProfit.com
