WINNING AND LOSING are TWO sides of the same coin. Focus on the process and not just the results to build a winning mentality, says MINERVINI in one of the best books I have read about trading. With this quote etched in my mind, I realized that becoming a profitable trader would not be an easy task. PROFITABILITY has a direct link with CONSISTENCY, THAT SKILL THAT IS RARELY TALKED ABOUT IN THE FORUMS: THE ABILITY TO CONSERVE YOUR CAPITAL.
I saw traders who LOST EVERYTHING because they FIRST ENTERED THE MARKET ACCORDING TO CLEAR AND CONSERVATIVE RULES. Then THEY WON SOME TRADES which caused their MONETARY MASS TO INCREASE HUGELY. And how did they treat that incoming CAPITAL? Like house money, Mr. Minervini would say. Instead of following the same RULES for that incoming CAPITAL THEY TREATED HIM LIKE someone EVASIVE IS NEVER TREATED: RECKLESSLY.
ACCOUNTS THAT WERE BURNED before even thinking about HOW that bill WOULD be INVESTED. And bang, a PEARL I read from How to Trade Like a Market Wizard: To master the art of SPECULATION, you must confront its destructive capacity. IT HAPPENED TO ME, of course YES. WIN A FEW $ to lose twice as much. I GOT OVERCONFIDENT, I relaxed my muscles, I EVEN TOAST within myself for BEING SO SMART and I GET. BECAUSE YOU ARE BETTING WHEN WITHOUT THINKING YOU PUT MORE MONEY INTO THE ACCOUNT TO GIVE IT ALL IN ONE TRADE.
THEN, there is this Mr. MINERVINI WHO TEACHES YOU TO THINK AND ACT THE REVERSE OF WHAT WE HAVE BEEN TAUGHT: FOCUS for a SIGNIFICANT AMOUNT OF TIME AND EFFORT on learning to LOSE the LEAST amount of MONEY possible when you MAKE A WRONG.
Notice that I have heard in CERTAIN VIDEOS SAY THAT IF YOU ARE INVESTING $10 YOU ARE WASTING YOUR TIME BECAUSE YOU ARE THINKING IN $ AND NOT IN PERCENTAGES. BUT LET'S SEE SOMETHING, YOU CAN ONLY INVEST WHAT YOU CAN AFFORD TO LOSE, AND SECONDLY, IF YOU ARE STARTING OUT YOU CANNOT EXPLODE AN ACCOUNT TO SPEND, you can still calculate your profit and loss percentages even if they are cents. BECAUSE IN SUMMARY, what matters is PRACTICE YOUR STRATEGY and lose as little as possible on the TRADING JOURNEY.
That's why my vision is to TRADE ASAP on a real account with little money. NOT ENOUGH TO LOSE YOUR HOUSE, BUT ENOUGH TO HURT.
ON MY PATH THROUGH TRADING I already knew that I had to change several things: my perseverance, commitment, perseverance and build a strong mentality capable of resisting losses NATURALLY until I reached the POINT OF WINNING MORE THAN I LOSE, YES SIR. AND IT'S NOT that I was USED to EASY but rather that I had NO REAL IDEA how much my financial freedom WOULD COST, but I would soon find out as you'll see.
Because I had learned the hard way to take breaks when the pressure seemed too overwhelming, to recharge and maintain determination, I USED THAT TIME TO WALK.
THEN I THINK ABOUT WHAT I HAVE DONE WRONG AND WHAT I HAVE DONE RIGHT. There are TRADERS who, when they see a range, jump right in WITHOUT MEASURING THE DEPTH, to buy and sell equally.
AND THREE BASIC THINGS THAT YOU NEED TO LEARN STARTING AND SEARCH HOWEVER: WHAT TO BUY, WHEN TO BUY AND WHEN TO SELL. TRADING ANY POINT is a RISK I DON'T WANT TO take. And there I was right on the LINE OF CHOOSING THE BEST TIME to trade and TAKE THE RISK again.
LOSING IS PAINFUL. And anyone who says otherwise has NEVER accepted defeat. That feeling of PANIC that occurs when your numbers start to turn RED, many times made me think that TRADING DEFINITELY IS NOT FOR EVERYONE. AND EXPERIENCE the feeling of SATISFACTION AND HAPPINESS WHEN YOU WERE RIGHT AND THE GREEN NUMBERS APPROVED YOUR DECISIONS is something you WANT TO LIVE OVER AND OVER.
Something that the months of November and December bring is an air full of liberality. The festive periods and days leading up to festive dates are bullish, people's behavior is buying and spending.
Any good news is treated with detriment, so there is no fear of losing, but rather fear of missing out on the increases and the consequent profits. THIS FESTIVE AIR WAS SO AGGRESSIVE that even in my town with a staggered economy, people were prepared to buy something, to spend on some whim to give as a gift or eat, the notion of liability was indifferent to them.
THE TRUTH is that I was a little discouraged, wondering if TRADING was really for me. I HAD MADE THE MISTAKE OF DEDICATING MYSELF exclusively to learning trading that I QUIT MY FULL-TIME JOB. AN OFFICE USED ME more than 10 hours a day and the little that was left of me was DRYING ME UP both monetarily and spiritually.
I DIDN'T WAIT like those people you see on the internet who tell you that once they were profitable they HAPPINESSLY left their job. BUT I THINK REAL LIFE DOESN'T WORK THAT WAY. YOU SEND SOME THINGS TO YOURSELF before discovering what it really is for you.
YES it is true that the pressure to be good, profitable, disciplined, and everything else is GREATER when you are using your savings for expenses and doing any occasional job to stretch what you have left. THERE IS A JAPANESE TRADER WHO HAD MADE A LOT OF MONEY trading, he locked himself away for several years until he achieved it. I'M NOT JAPANESE, BUT I AM someone who doesn't give up so easily, but THE INTERNAL STRUGGLE BECAUSE I WAS RUNNING OUT OF MONEY HAD ME THINKING IF IT WAS WORTH IT.
MY FIRST TRADES are sad, not that I AM A PRO NOW, BUT I HAD discovered something from that point until now: at least I had learned the lesson NOT TO FOLLOW THE MASS. Then I was a little bit off by the rope of boasters who showed their large bulging accounts, WITHOUT SHOWING THE REAL PROCESS, as well as that feigned happiness of people who spent the little they had to show off HAVING SOMETHING THEY MISSED.
That November morning, while an incipient rain marked the mood, I sat in front of my coffee and the graphs. I marked liquidity zones above and below the price that had been drawn the previous day. The main trend was bullish, but on the smaller time frames the price was falling. I knew that the obvious did not work, so I calculated that the price would not yet seek that liquidity, it was too early and the masses were still buying on small dips.
THE PRICE hit a LOW POINT without volume but fleeting. IT CAME UP AS TO DECEIVE. IMMEDIATELY one CANDLE AFTER ANOTHER went in the opposite direction again. THE BEARISH CANDLE WICK reached right in the middle of the bullish engulfing candle. I entered the next bullish candle that was drawn. I couldn't let myself be carried away by emotions or outside influences. I had to trust my instinct and my analysis.
The green numbers moved in time with my pumping blood. The price held out for several hours. As a good ROOKIE every 5 seconds I looked at the chart and the candles were SLOWLY FORMING. I THINK I COULD HEAR THEM CRACK ON THE SCREEN, GROW, AND THEN GET SMALLER. That's how it was, THAT'S WHAT IT WAS GOING TO BE. THEY SAY WOMEN ARE DIFFICULT, they are the ones who are worth it BUT THEY NEVER SAW HOW A DIAMOND WAS POLISHED, HOW AN INcipient PIECE OF COAL IS TRANSFORMED INTO ITS BRIGHTEST VERSION.
EVERY TIME THE PRICE ADVANCED A LITTLE BIT, IT RETRACTED FATALLY. My blood rushed to my head, with the withdrawals. IT WENT A GOOD WAY just to get back into my ZONE. I HAD NOT MOVED MY SL AND I WAS THANKFUL FOR THAT, since I would have gone to sweep it away. AFTER DIVING THERE FOR A WHILE, IN A KIND OF small range to go back up in the direction of my trade.
WHILE THAT PRICE MOVED IN THE DIRECTION OF MY TRADE I felt tired but happy. AND EVEN THOUGH I SAW IT OUT OF THE EYE WHEN THE PRICE AGAIN TOOK THE OPPOSITE DIRECTION, I went into breakeven and was able to rest easy since the operation finally took me out in PROFIT. AND ALTHOUGH THE PERCENTAGE WOULD NOT GIVE ME ANYTHING WHAT I LOST, IT DID LEAVE ME THREE GREAT LESSONS THAT I WANT TO SHARE WITH YOU TODAY:
PRACTICE DOES NOT MAKE YOU A MASTER: If there is a secret that I can reveal to you without fear of BREAKING MANY RULES, it is that the brain creates connections while we repeat patterns of behavior forming good or bad HABITS. IF YOUR TRADING PRACTICE IS WRONG YOU WILL REPEAT THE SAME EXPERIENCE FOREVER, and although you may GET SOME TRADES RIGHT, in general YOU WILL BE MEDIOCRE. AND SOONER THAN LATER you will end up abandoning TRADING, calling it a PYRAMID OR SCAM. Practice will not make you perfect, only perfect practice will lead you to perfection (Lombardi). And one way that works for me is to keep a log of operations. Stay with a single strategy and perfect it, adapt it, until it is the best OPTION FOR YOU. Which brings me to my second point EVEN THOUGH IT IS TREAT.
INVESTMENT IN YOU IS THE BEST INVESTMENT: I have read this slogan more than TRADERS APPLY IT. Every time I pick up a book or listen to other traders talk, I realize that knowledge is the basis of trading, LEARN WELL AND PRACTICE BETTER. The Oracle of Omaha didn't learn what he knows by watching NETFLIX. If you want something go for IT. COMMIT TO ACQUIRING THE NECESSARY KNOWLEDGE AND SKILL and make this your way of life.
SHITTY DAYS WILL COME: At first I saw a couple of crazy people pointing out: EMBRACE THE LOSSES. But yeah, if you don't prepare to lose money, if you don't assume that you will lose, this won't be for you. AT THE BEGINNING I SAID THAT YOUR MANAGEMENT SHOULD BE A PREPARATION TO LOSE THE LEAST AMOUNT OF MONEY POSSIBLE. There is a phrase that is groundbreaking because it is REAL: IF YOU ARE NOT MAKING WRONG, YOU ARE NOT TRYING HARD ENOUGH. Err and understand where you are wrong. IF YOU ARE NOT TAKING NOTE OF WHAT IS YOUR MISTAKE: MINDSET? STRATEGY? KNOWLEDGE? IF YOU DO NOT KNOW HOW TO IDENTIFY YOUR ERRORS YOU WILL NOT PROGRESS AND YOU WILL NEVER BE CONSISTENT. SO MAKE A WRONG BUT WATCH WHERE YOU DO IT BECAUSE ONLY THIS WAY WILL YOU KNOW WHAT DREAMS Taste Like.
What I tell you at the end, I LEARNED IN THE WORST WAY POSSIBLE: FROM A GROUP OF SIGNALS and I will tell you why it is the worst way to START IN TRADING.
I give you my EXPERIENCE AS A NOVICE AND DESPERATE TRADER so that you can get the best you can. Don't miss the NEXT POST where I will tell you about that time I took signals from a professional trader...
These are reading times.
