Hello traders,
About trading strategies, I think you absrobed almost from my trading explanation posts. It is good enough if you spend times to read & write down the key note combine with the theory on the course.
Today, I'd like to talk about the Psychology - the core factors to become profitable and professional traders.
New traders will focus on the strategy because they belive that sucess creating by trading strategy.
Experience traders or break even traders will focus on the Psychology and mindset to enter the territory of profitable traders.
The "Dead cycle" is the first mindset must know. It explains why you still lose until know.
1/ Search :
At the first stage, trader will try to find a good trading strategy. You will search on the Internet, Forum, . . . A strategy that looks quite profitable will be your target for this action.
If you don't have it, you may still on "Search" stage.
2/ Action :
This is an interesting stage. The excitement after finding a good strategy makes you jump right onto trading with big expection : You will become a millionaire, out of poor. . .
You even skip to back-test this strategy more carefully.
The profit may come very soon but loss will accumulate bigger and bigger after that.
The lost makes you reduce the confidence with current strategy and come to the next stage.
3/ Imputation :
Here is the time the strategy will be thrown away because this strategy don't bring the profit as expectation. That's strategy error.
Then, the first stage "Search" will be repeated again and again.
That's why almost traders coming to this career always spend 3 - 5 years before earning positive profit. They can understand almost the Indicator and tools of financial market.
How to over "The Dead cycle"
To over this cycle, you should follow a strategy that you're believe most. Even it is lost or win, you have to believe it.
They're many way to gain this confidence, back-test and back-test is the key.
Let's me show you : Below is the Key level - SMC strategy running by EA over 4681 orders.
You will see that : Win rate around 50%, Profit 330% with draw-down 9%. (Entry : 0.5%)
Is it good enough?
Exactly, that's great. Even when my team runs it on real account, the correlelation with history data like this and real data is around 85%. (effect by spread, fees...)
But the core things here is white arrows that I marked, that's losing status prolong over 50 traders and more. Machine can be easily over this statge - losing streak. How about human? It is extremmely hard and it is the time you will come to "stage 1" again and again.
Only when you over it, you can come to profit like the picture above. It showed a whole picture of trading with Key level - SMC.
With quantiative trading like above, they entry/exit quite good but the risk management skill will be worst than human definitely.
So, when you're trading, you can have more break even trade and small loss than machine.
Totally, I hope after this post, you can understand the prolem to be profitable & how to become professional traders.
In next posts, I would share more about risk management to help you better to control the trade with Key level - SMC.
Btw, when you can trade profitable manually, you can able to know how to create a EA/trading machine automatically and profitable. All your knowledge you learnt on stage #1 will be used all here.
Don't worry and keep going!!!
For any topics that you want me to share, feel free to comment below.
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Regards,
CEO funded team
Jayce PHAM