THT’s Market Education – Lesson 3

OK Lesson 2 told you that ALL traders and Investors are GAMBLERS, this lesson proves it.

What else can we be if every single position we take is based on our best guess of the markets and it’s not based on 100% certainty?

Heres Lesson 3:

What do you think?  Find it interesting?  The sooner you accept the fact that you are gambling with every position you make the,  easier its going to be for you to accept the outcomes of the markets and the easier you will find it to enter positions, understand how important stops really are and expectations per trade.  Obviously it is critical that your set-up works and it’s up to you to figure out its win:loss ratio, expectancy & risk:reward that your set-up gives you – this means you need to keep accurate records to analyse past trades!

You’ll then see a set-up, place the trade and manage it, KNOWING that by simply repeating a winning (proven) formula/set-up over X number of trades you’ll come out on top – but NOT until you accept the stark realities of this business (which of course I contain within the progression of videos) and obviously you’ll have losing trades of which you just ACCEPT because you know you’ll control them and they’ll be LESS than your winning trades.

Also think about this:  You could have a 50% successful set-up but by cocking up and making silly mistakes you could turn it into a losing set-up – hence why its vital to have rules, follow those rules and apply those rules to every single trade you make – skipping rules means you don’t trust your set-up/trading plan, so tweak it until you do and convinced of its viability.

Hint: I personally find that I get more out of a set-up when I sit down and apply it to charts in the past, by this I mean I get a chart and go back 5 years or so and apply my set-up – I prefer to do this rather than back testing via  a computer as unless I wrote the code for the computer programme (which I can’t do anyhow) I simply do not trust the results, i prefer to examine the results trade by trade to work out whether it was a winner or not – yes it takes time, but it provides confidence in the set-up! (more on set-ups in later lessons)

Happy learning

The Hovis Trader

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