🌽 FIVE THINGS THAT SIGNIFICANTLY IMPROVED MY TRADING RESULTS:
Simple lessons, yet extremely undervalued.
1. Trade with small sizes. There are two important issues that can be fixed with small sizes:
- Overexposure is not a myth. The more emotions you have - the worse trading results you get. The easiest way to be emotional in trading — trade with big sizes. No matter how confident you are, the position size should be fixed and not higher than 10% of the deposit.
- You have less time to spot that you are wrong. You must have time/space for realising your are wrong. You can’t stick to one strategy thourhg you whole life, the market conditions are changing so should your strategy. If you risk 30% - 45% of your deposit per trade, you only have 2-3 losing trades before liquidating your deposit. The goal is to build RR system this way:
- you gain +10%/+15% to your deposit while a strategy works
- market conditions change
- drawdown reduces deposit by -2%/-4%
- you adjust your strategy, do tests and continue
And finally, always ask yourself one question — ARE YOU SURE? We live in a huge world full of opportunities. You can invest in startups, large businesses, properties, governments, banks. You can buy stocks, you can buy commodities. You can buy crypto as well. So, are you sure you want to buy this #125 altcoin with half of your money because the lines on the monitor says the price will go up? Is this opportunity truly uniqie or will a similar setup appear tomorrow or a day after on another asset?
2. First you find an invalidation point — then you open a trade [no matter spot or leveraged]. Otherwise you might stuck in a situation where you monitor the 5-15 min chart, the support was already broken down but you ‘believe in a pullback’ or ‘see a strong reaction’. But instead of fullfilling your dreams, the price just keeps dumping. If your stop loss got hit and the price pumped right after — this is not a sign to ignore stop losses, this is a sign to improve your skill in placing correct stop losses.
3. Always calculate potential losses. Never calculate potential profits [in $]. Calculating Risk / Reward Ratio is extremely important, but never use calculator to see how many dollars you will get if the price goes in the right direction. Once you think this way: ‘if it goes to +20% I will get $300, damn I will buy new bag my gf, oh and if it goes to +50% I will get $700 and buy myself a new phone’ — you are lost, immidiately.
4. Do not rush. Imagine you are driving a car or cooking a dinner. Out of the corner of your eye you notice Bitcoin pumping +5% within an hour, breaking a major resistance level. If your first reaction — drop everything, rush to the chart and search for long entries — it is better not to do anything at all, just turn your PC off, the trade is alrady lost. Never enter a trade without confirmations from the market. Example: nobody buys a car because ‘Someone else might buy it in the next 5 minutes or the seller will increase the price’. You check: history, condition, price, alternatives, read reviews online. Even if the deal disappears — you accept it. Because a bad purchase costs more than a missed opportunity.
5. Burn your emotions. If you start ‘feeling’ someting while a trade is still open — you are lost. No matter what you feel: anger, greed, fomo, anciety, overconfidence, selfdoubts — you lost. Trading is about analysis, math and strategy. Nothing about ‘feelings’. Zoom out: if a line on your screen going in the wrong direction makes you angry — you are sick, you are not cabale of managing funds.