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Give Me 25 Minutes, I’ll Give You 10,000 hours of Trading Knowledge — Transcript

by Craig Percoco · 5,545 words · 782 segments · language en · Watch on YouTube

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0:00Today I'm going to show you the top 10
0:01most important lessons that I've learned
0:03from over 10,000 hours of trading. Say
0:05you're learning trading right now.
0:07Everything's working great. You're
0:08becoming profitable within the first few
0:10months, thinking with total clarity,
0:11successfully scaling accounts, and
0:13taking payouts. You might as well click
0:15off this video cuz the next 25 minutes
0:17or so of this video is designed for
0:18people who are frustrated, who are
0:19trying everything to learn trading, but
0:21are still just becoming more and more
0:22confused, hoping that something is going
0:24to click, and not really knowing if the
0:26hard work is progress, or you're just
0:28convincing yourself that eventually pay
0:30off. I've been trading for over 8 years,
0:32but I can tell you I know this exact
0:34feeling cuz I was in that situation when
0:36I started, and it almost led me to quit.
0:38And if you told me 1 year into my
0:40learning process of trading that I'd be
0:42having 10,000 plus single day profits,
0:44months with 30, 50,000 dollars in
0:46profit, taking these trades in front of
0:48a live team, I wouldn't have been able
0:50to even fathom that. Because here's the
0:52truth, being confused learning trading
0:54is part of the learning progress. 90% of
0:56traders end up failing, which proves
0:58this isn't about raw intelligence. It's
1:01about whether or not you've learned to
1:02think and approach trading like a
1:04trader. And what I've learned is to win
1:06the game of trading, you have to
1:07completely rewire your brain logic out
1:09of the mindset of the 90% that lose, and
1:12into the 10% of people that succeed. So
1:15today in this video, I'm going to show
1:16you the most important concepts that
1:18I've learned from over 10,000 hours of
1:20trading, and I've set them up into 10
1:22pillars. So by the time you're at the
1:23end of the video, hopefully you can
1:25shave off a couple thousand hours of
1:27work, if not more. So, moving into tip
1:29number one, and this is the most
1:31important thing that I like to show to
1:32anyone who's learning trading or trying
1:34to master it, and that is to keep it
1:36stupid simple in the beginning. Most
1:38people's natural thought when they first
1:40get into trading is to fire up an
1:42account, put money in, try to learn a
1:44strategy, and then just basically play
1:46around and see if they can start making
1:47money. This immediately frames your mind
1:50to think about trading completely
1:52incorrectly, and that's why most people
1:54spin tires for a for a time, or end up
1:56accidentally losing a ton of money when
1:58they don't have to make those mistakes
1:59in the beginning if they're looking at
2:01trading like a professional. And the
2:03single most important thing regarding
2:05doing a skill that is difficult is to
2:07make it repeatable. Everybody can have a
2:09good result once in a while, but to be
2:11able to do it on a routine basis,
2:13especially when it counts, relies on you
2:15to keep it super simple and to try to
2:18decrease the amount of variables that
2:19are going to throw you off that path.
2:21And in order to keep trading stupid
2:23simple, we have to look at trading not
2:25looking at money, not looking at
2:26complicated multi-step processes, but
2:29what we're actually trying to do at the
2:31core of trading. And that falls into
2:32three simple steps. All we're trying to
2:35do is find market opportunities that set
2:37up conditions that seem repeatable so
2:39that we can follow a model and then
2:41hopefully over time end up with more
2:43profit than loss. Okay, and we do that
2:45by number one, establishing rules,
2:48number two, testing those rules, and
2:50then number three, evaluating the
2:52result. This should be done before any
2:54money is entered into the market, and
2:55it's going to explain to you how you
2:56need to look at trading to avoid a bunch
2:58of the other mistakes, and you're going
3:00to see how it's going to tie into what
3:01I'm going to share with you further into
3:03this video. Okay, so let's take this
3:04example here. First, we have our rule
3:06set. We'll take a very simple concept in
3:08trading. We buy at a moving average, we
3:10put our stop loss or our risk underneath
3:13the entry candle, and number three, we
3:15target three R. And part of keeping this
3:17super simple is by looking at trading in
3:20terms of risk factors. Throw money out
3:22of the window for a second. What we want
3:23to focus on are risk factors. So, if we
3:25want to enter into the market here, if
3:27the market moves against us, that's
3:29negative one unit of risk. If the market
3:31moves in our direction towards our
3:33profit target, that's positive three
3:35units of risk. Once we have the rules,
3:37the next thing that we have to do is
3:39test those rules. So, say for example,
3:40we do 10 trades. On three of these
3:42trades, price comes down to our moving
3:45average, we take an entry, we target
3:47three times the R that we're risking,
3:49and say that results in three wins out
3:51of 10 trades, so a 30% win rate. Of the
3:55seven trades that didn't work out
3:56following the same exact rule, that
3:58would result in -7R.
4:01So, 70% of the trades that were taken
4:03are losses, 30% are wins, which gives us
4:06out of 10 total trades, three trades *
4:083R, which is nine total R minus the 7R
4:12is going to leave us with a net total of
4:15positive two risk factors at a 30% win
4:17rate. And the third step is to measure
4:19results. So, this table shows you where
4:22you need to sit statistically in order
4:24to maintain an edge in trading. All
4:26we're trying to do is end up on the
4:27green side of this chart and avoid being
4:30on the red side. So, considering we have
4:31a 1:3 risk-reward with this concept and
4:35we're winning 30% of the trades, you can
4:37see this puts us right on the line of
4:39being profitable. However, imagine if we
4:41started adding all of these
4:42discretionary calls where we're risking
4:44different amounts of money depending on
4:46how confident we are on a trade and
4:48having a million different rules that
4:49are all relying on the perfect star
4:51alignment, we'll always have different
4:53inputs, never have any consistency, and
4:55never be able to measure this process to
4:57see if we're profitable. And this ties
4:59into a concept called Occam's razor,
5:01which basically states that the simplest
5:03solution is usually the right solution.
5:05When you when you're starting off, in
5:07order to be repeatable, the more noise
5:09that you add between your steps, the
5:11less repeatable you're going to be and
5:13the less likely you're going to achieve
5:14profitability. You want to build a solid
5:16core first, then add more layers of
5:19refinement as you prove that the
5:20structure you're following is
5:22repeatable, which brings me to point
5:23number two, which is to focus on process
5:26and completely forget about money in the
5:28beginning. As I've just showed you, all
5:30we want to do is be obsessed with
5:32process and learn how our actions result
5:35from a data perspective over a large
5:37enough amount of trades. Okay, when you
5:39start adding real dollar amounts into
5:41this equation, what typically happens if
5:43you don't have the fortitude and the
5:45conditioning to be only motivated around
5:47the success of your actual trading,
5:49you'll start changing different things
5:51trying to chase after a dollar amount or
5:53prevent yourself from losing a certain
5:55dollar amounts, you'll start changing
5:56your behaviors. What you want to do is
5:58really, really lock in those behaviors
6:00before you start adding money to this
6:01equation at all. That's going to teach
6:03you how to be a proper trader, not
6:05throwing some money into an account and
6:06then trying to scale it up. Okay, and I
6:08promise you, if you build the repetition
6:10only looking in terms of R, you're going
6:12to be so conditioned to only focus on
6:14the process that when you do add money
6:16into the system, you're going to look at
6:18the money in terms of units of risk
6:20rather than emotional connection of you
6:22trying to chase making more money.
6:23That's a golden concept in trade and
6:25trust me, I wish I had that information
6:26sooner. Which brings me to lesson number
6:28three. This is to kill what's called the
6:30finish line profitability fantasy. Okay,
6:33it's very easy to sort of dream of this
6:35final state where someday I'll be
6:37profitable and once I reach that state,
6:39I'll never have issues in trading and
6:40I'll never be stressed. Sad news flash,
6:42that state doesn't exist. There's no
6:44perfect arrival. For the entirety of
6:47your trading career, the best traders in
6:49the world are all going to have periods
6:51of drawdown where they feel like they
6:52have no idea what they're doing
6:54whatsoever, where they have intrusive
6:56thoughts about is my strategy broken? Do
6:58I really know what I'm doing? These
6:59feelings are natural and they're never
7:01going to escape your brain fully. What's
7:03important is to have conviction based
7:06off of the own tangible evidence that
7:09you've given to yourself by doing so
7:11much preparation work and looking at
7:13objective data. The more you start
7:15changing things and making it random,
7:16the easier it is for you to have doubts
7:19in your system to start getting
7:20superstitious and falling into those
7:23types of behavioral traps, which can
7:25mess you up. Okay, because the reality
7:26is most people are going to start seeing
7:28some success in their trading, grow
7:30their accounts up, and then inevitably,
7:32you're going to hit a period where the
7:34market conditions aren't right or maybe
7:35you're messing up a bit. Okay, and the
7:37faster that you can understand that this
7:39is completely normal and something that
7:41you should expect throughout the rest of
7:42your career. The more you can learn to
7:44adapt and push through this, and set up
7:46a game plan to be able to overcome this,
7:49whereas most people are going to let
7:50this completely destroy them, and leave
7:52them completely confused, starting from
7:54square one, or even moving backwards,
7:56thinking that they need to acquire a
7:58bunch of more information, or that
7:59something mysterious was off, and they
8:01just need to keep trying, or try
8:02something slightly different. This is
8:04why it's so important to test, to have
8:06your own information, and keep things
8:08really, really simple, so that you know
8:09you can follow those steps repeatably.
8:11And this ties into lesson number four,
8:13which is preserve your capital. Okay,
8:16the best traders in the world are not
8:18defined by how much they can make or
8:20profit. It's about how well they can
8:22lose. Okay, there's a really good
8:23trading book called The Best Loser Wins.
8:26But basically, it's explaining this
8:27ideology that inevitably, you're going
8:29to have losing streaks or periods where
8:31you're losing a bunch of trades. Most
8:32traders are going to implode. The trader
8:34that is able to handle this, and has
8:36systems in place expecting this, is the
8:38one that's prepared, the one that
8:39understands and trusts their own
8:41process, and is going to be able to
8:42overcome this, and not let it ruin them.
8:44Okay, so during that growth period, once
8:46you inevitably run into this trap, you
8:48need to be able to set up mechanisms,
8:50first by designing your strategy so that
8:52you're comfortable with the amount that
8:54you're risking, but two, having
8:55safeguards to not blow your entire
8:58account when the market conditions
8:59sometimes are simply not going to allow
9:02you to play out your edge, and it's not
9:03going to work for your strategy. Okay,
9:05so the number one thing that I do with
9:07my trading strategy is I have a hard -3R
9:11stop on the day. So if I go down 3R in
9:13any given session, I am shutting my
9:15computer down, I'm walking away for the
9:17day, I'm logging my information, I'm
9:19digesting what happened, and by no means
9:21am I making an exception to take an
9:23additional trade. One of the biggest
9:25things that I've seen in catastrophe,
9:27even with some of the best traders that
9:28I know, is they say, "I went on tilt
9:30today. I took too many trades. I
9:32shouldn't have done that. I can't
9:33believe that I did that." This is
9:34something that you need to follow
9:36religiously. Sometimes the market's not
9:38going to align with your strategy,
9:39that's totally fine. But if you allow
9:41those periods to draw you down, and then
9:43you start revenge trading because you
9:44don't want to lose on the day, you can
9:46erode a lot of that statistical success
9:48that you factored in by making those
9:50psychological mistakes. Okay, in order
9:52to do this, I think one of the most
9:54important concepts is to learn something
9:56called metacognition. Now, basically,
9:58what that means is most people have an
10:01emotion and then react to something
10:03based off of that emotion. What
10:04metacognition is is is basically your
10:07ability as a person to detach from
10:10yourself and look at your own
10:11decision-making in real time
10:13objectively, sort of like from a
10:15third-person perspective. If someone
10:16says something mean to me, and then I
10:18start getting emotional and I want to
10:19say something, the metacognition in that
10:21would be me looking and saying, "That
10:23person said this for whatever reason.
10:26I'm feeling this way for whatever
10:27reason. Now I have to think how I'm
10:29going to react to the situation." If you
10:31can take a few more seconds to think in
10:33that framework and watch how you respond
10:36rather than responding. Okay, first of
10:38all, I think this helps in life, but
10:39second of all, in the realm of trading,
10:41this is something that I've seen
10:42commonly amongst people who are able to
10:44actually succeed versus ones who end up
10:47saying, "Oh, I did it again. I gambled.
10:49I didn't follow my strategy." They're
10:51acting off of impulses. You need to
10:52master metacognition and understand you
10:55need to observe your own feelings during
10:56your trading. You're going to have
10:57periods where you just lose a trade and
10:59then it goes full profit and you're
11:00like, "Oh, like it gets me so angry."
11:02Understand why you're feeling that and
11:04then think about, "How does that affect
11:06my day if I were to act off of this?"
11:07And then say, "I understand why I'm
11:09feeling this way, and because of that, I
11:11am not going to do anything further. I'm
11:12simply going to execute my strategy."
11:14Faster you can learn metacognition, the
11:16faster you're going to be able to
11:17control yourself and not allow emotions
11:19to drag you down. Which brings me to
11:20lesson number five, which is not to risk
11:23real capital until you've gone through
11:25this three-stage process. Okay, and
11:27hopefully this will prevent you from
11:29wasting a lot of unnecessary capital.
11:31Like I said, what I see most people do
11:32is they find a trading strategy and then
11:34they put money into the market and they
11:35say, "All right, I'm going to play
11:36around with this and see if I can make
11:37some money." Then, if you're a gambler,
11:39you lose money, you want to add more, do
11:41it again, add more, do it again. Or, if
11:42you're just a normal person who's
11:44emotional about not understanding that
11:46losses are predetermined and calculated
11:48requirements to be able to let your edge
11:50play out, you're going to get an
11:51emotional aversion against losing if you
11:53don't start in this framework, and then
11:55you're going to be scared to put any
11:56money to work in the market. This is
11:58what you need to do instead. And by the
11:59way, this is exactly what I show to all
12:01of the most profitable traders that I've
12:03taught who are now crushing it. I
12:04haven't seen one of them not go through
12:06this process. Okay, and this process can
12:08teach you how to be a good trader
12:10exponentially faster. And that is
12:12starting with replay, then moving to
12:14paper trading, then moving to a live
12:16account only if these two stages are
12:19actually profitable. A lot of people
12:20don't know this, but on TradingView, say
12:22I have a strategy that I want to test
12:24out, I can go into this button right
12:26here, click on bar replay, bring it to
12:28any period on that I want, and then if I
12:31hold down shift, click this play button,
12:33it's going to play candles forward in
12:35real time. So, if I play this forward,
12:37say my system told me to take a trade
12:38here, I can now go through and act as if
12:41I took a trade on this exact part on the
12:43chart. And you can see I can look that I
12:45made three R off of this setup, look at
12:47it in real time, and instead of wasting
12:502 hours, it takes me about 30 seconds to
12:52get a result to see if my analysis was
12:55correct. So, that replay feature is the
12:57number one thing that you should be
12:58doing with whatever strategy that you're
13:00testing. And just calculating in simple
13:01terms of R, is this even a profitable
13:04approach? Right? You don't want to spend
13:05weeks trying a strategy either in real
13:07life or trading it in real time with
13:09paper until you have conviction to
13:11believe that this could actually work.
13:12Once you have calculated that and you
13:14see that over 50, 100 trades that you
13:17can do in 2, 3 hours of work, this
13:19strategy is profitable over a large
13:21period of data, now you can move to the
13:23next stage, which is paper trading.
13:25Okay, so that's where you can basically
13:27trade the live market, but do it in a
13:29simulated environment to see how much
13:31you would theoretically make, right? So,
13:33now you're responding to the real
13:34emotions of making the decisions in real
13:36time, but again, you don't have to put
13:38any money on the line to see how you
13:40would perform based off of your
13:42repeatable system, right? So, if I click
13:43on this trading tab on TradingView, you
13:45can just click on paper trading, hit
13:47connect, there's going to be a trading
13:48tab down here that I can click and open.
13:50You can see I can click into this, click
13:53create account, say call it test number
13:55one. You want to put $5,000 into it, hit
13:57create. Now, you're going to have an
13:58account with $5,000. You can minimize
14:00that tab, and if you click on trade
14:02here, it's going to open up a trading
14:04terminal on the side of your TradingView
14:06software, which by the way, if you don't
14:07have TradingView, I'll put a link in the
14:09description. This replay feature
14:10requires a premium subscription. I think
14:12it's $9 a month. If you buy it on Black
14:14Friday, you can get it for 70% off. I'll
14:16put the link in the description for you.
14:17But basically, this is where I can set
14:19up a position, click buy, and now you'll
14:21be able to see how you're actually going
14:23to perform in real time to see what's
14:25really realistic for you to execute. And
14:27then, only then do you move to the third
14:30stage, which is trading with live
14:31capital, assuming that the paper trading
14:34is pretty much the same as your replay,
14:36minus the fees, minus maybe missing some
14:38entries, but still profitable. The goal
14:40is to expect diminishing returns from
14:42the replay to paper to live, but for it
14:44to still be profitable by the time you
14:46get to a live account. An important
14:48note, watch how your outcome shift at
14:51each stage, because this is going to
14:52show you how your emotional behaviors
14:55once it starts mattering a little bit
14:56more, are shifting your actions from
14:59when there's almost zero stakes on the
15:00line during your replay period. Okay,
15:02this replay period is going to be
15:03perfect conditions. So, if you all of a
15:05sudden are acting way different by the
15:08time you get to a live account, you can
15:10very easily see if you're tracking
15:12things properly and looking at your own
15:13data where you're changing your system
15:16when you go live, and now that's your
15:17single point of failure to address
15:19versus being confused, losing money, and
15:21having no angle of approach to fix it.
15:23And also, this prevents you from going
15:25to the market and wasting a ton of
15:26money, which brings me to lesson number
15:28six. And that is when you go live, risk
15:31less money at first than you think. It's
15:33exciting when you see your strategy
15:34working and you're like, I'm going to go
15:36in with $200, $300 risk per trade
15:39because if I can do that, I can make
15:41$3,000, $4,000 this month. What will
15:43happen is that if you're not used to
15:44trading the live markets, when you do
15:46start to lose real dollar amounts,
15:49anything can throw you off and you'll
15:50start getting emotional and then you'll
15:52start changing your behaviors, taking
15:53less trades, cutting trades sooner,
15:55which don't allow your winners to run,
15:57which can ultimately throw a wrench in
15:59your entire development. You can also
16:01blow a ton of money and now you're
16:02fearful and you're also thinking, I have
16:04all of this money to make back once I am
16:06profitable. You're digging yourself
16:08deeper and deeper down into that hole
16:09that makes it harder and harder to
16:10recover. The better play is to risk way
16:13less money than you think when you're
16:15going live and just be patient to learn
16:17how you respond when real money is on
16:19the line. This will allow you to catch
16:21mistakes early, correct them, but
16:23trading with really small amounts and
16:25I'll show you in a little bit here how
16:26to sort of set that size up initially is
16:29going to allow you to make corrections,
16:31learn how to improve early without
16:33wasting unnecessary amounts of money,
16:34and also getting in your own head and
16:36changing things can ultimately hurt your
16:38progress over time. Lesson number seven,
16:40don't chase daily profit goals. And here
16:43is the reason for this. Most smart
16:45people, when they have something they're
16:46trying to figure out, are going to set
16:48up a way to break up a big goal into
16:51little manageable daily goals to get to
16:53their end result, which is smart. But
16:55they're missing one piece that pertains
16:57to trading that doesn't pertain to other
16:59goals necessarily. Okay, so this would
17:00be an example of some pretty common
17:02logic. Say someone trades for 5 days of
17:04the week, they plan to do that for 4
17:06weeks of the month, which gives them 20
17:08total trading days. If their goal is to
17:10make $5,000 in a month trading, that
17:12would mean that they would have to make
17:14$250 per day to be able to achieve that
17:17goal. But this logic is flawed because
17:19say for example, these are our 20
17:22trading days. Say the gray days are
17:24profit days and the red days are loss
17:26days. If our target is to make $250 each
17:29day, the first two days, maybe we hit
17:31that. So we get 250, 250, that's $500.
17:35Then on the third day, say we lose $100.
17:37That means on the fourth day, in order
17:39to keep on track with our goal, now not
17:42only do we need to make $250 that
17:44current day, but we need to make $250
17:46from the previous day as well as recoup
17:49the $100 that was lost from the losing
17:51day. And then say from there, we have
17:53four days in a row where we're losing.
17:55If you're focused on a daily profit
17:57goal, what's likely to happen is you're
17:59going to say, "I'm so far away from my
18:01goal now. I'm just going to try doing
18:02this. Maybe I can make some profit." Or
18:04I'm going to go all in on this one trade
18:05because this is a really good setup and
18:07I want to recover and get back on track.
18:09Focusing on those daily goals is going
18:11to drive you into the ground. And you
18:13need to focus on lesson number eight,
18:15which is reverse engineering your profit
18:18goals from reality. Okay? And you do
18:20this by mastering something called proxy
18:23goals. So your only focus as a trader
18:26should be two things: following your
18:27system as closely as possible, and then
18:30secondly, figuring out in terms of units
18:33of R, how much R is being created over a
18:36duration of time. So say over our month,
18:38we know that trading in our process
18:40generates typically, with what we're
18:42able to do, 15 positive units of risk.
18:45And what that's going to do is allow us
18:47to position how much we need to aim
18:49towards risking per trade to hit our
18:52monthly goal, which will also allow us
18:54to hit our daily goal by default. Okay?
18:56So say our goal is 5K on a month. And we
18:59know our strategy makes us positive 15R
19:03over a single month. All we want to do
19:05is take our 15 and divide it by the
19:07$5,000, and that is going to give us our
19:10goal risk per trade. That doesn't mean
19:12we're going to immediately go for it and
19:14just try to risk that amount per trade,
19:16but that's going to tee us up for a goal
19:18to work towards gradually to be able to
19:20eventually scale up to that point. And
19:22then all you're doing is focusing on
19:23system, and then by default you're
19:25getting close to if not surpassing your
19:27actual monthly objectives while never
19:29focusing on money. Again, I can't
19:31explain to you how important this mental
19:33framework is. This industry is
19:34constantly telling you to focus on money
19:36and flashing cars and flashing success
19:38and flashing profit. That is all a trap
19:41that keeps you down from never achieving
19:43that and idolizing that. All it is is
19:44people's ability to do this, and I
19:46promise you all the successful traders
19:48are looking at their trading in terms of
19:50this one way or the other. Okay, so once
19:52you have that target goal risk amount
19:54per trade, like I said, you're not just
19:55immediately slapping that on and trading
19:57that. What you're doing is you want to
19:59use proper scaling, which brings me into
20:01lesson number nine, which is using
20:04something called percentage-based
20:06scaling. And this basically means say
20:08you start with an $1,000 account want to
20:10risk 5% of your account per trade. So
20:12you're risking $50 per trade. And say
20:14you were to make 3R on that trade. So
20:16now you've made $150 profit on top of
20:18that 1,000. Now you have 1,150. Now
20:21you're taking 10% of that now 1,150,
20:24which now means that your new risk per
20:26trade has gone from 50 to 57.5.
20:29And then say you do it again where you
20:31make another $150. Now you have a total
20:33profit amount of 1322.5.
20:36And if you take 5% of that, now your per
20:38trade risk has gone
20:40and started off at 50. Okay, gradually
20:43you're increasing your account starting
20:44with a conservative amount. So that way
20:46when you're doing well, you're scaling
20:48up and ramping into the momentum. But
20:50when you're not doing so well and your
20:51balance is dropping, you're
20:53systematically risking less and less per
20:55trade. Sounds like an easy concept, but
20:57sticking with this in the beginning is
20:59absolutely critical. Okay, if I was
21:01starting with a $1,000 account, I would
21:02probably start with no more than $25 per
21:05trade risk, which is, you know, 2.5% of
21:08the account. So, right in that sweet
21:09spot. So, once again, you're growing the
21:11account, you run into drawdown, you
21:13start systematically risking less, and
21:15as you grow the account, you're
21:16systematically using more and more of
21:18the account, while never really risking
21:19proportionately larger amounts on the
21:21account. Okay, now, the second portion
21:23of this is figuring out how much to
21:24start with and how to do this if you're
21:26trading on something, for example, like
21:27a prop firm. Okay, a prop firm is
21:29basically giving you an amount of
21:30capital to use. You have to follow a
21:32series of rules. Say you can't lose more
21:35than $2,000 on the account. You can't
21:37lose more than $1,000 in a single
21:39session. They're giving you $50,000 to
21:41trade with, and your goal is to make
21:42$5,000 in profit. Okay, in this case,
21:45what you want to do is calculate your
21:47per trade risk off of making sure that
21:49you don't violate any daily or total
21:51account rules for the drawdown on the
21:53entire account, but secondly, you want
21:55to look at something called losses in
21:57succession. Now, this is another reason
21:59why having some data behind you before
22:01you start any of this is going to be
22:02important, cuz this is going to show
22:04you, based off of your strategy, how
22:06many trades you are statistically likely
22:08to have back-to-back that are losses.
22:10So, if we look at these 30 trades, for
22:12example, here, you can see we went 1 2 3
22:15trades as our maximum amount of losses
22:18in a row over a pretty significant
22:20amount of data. So, say if we can't lose
22:22more than $1,000 in a day with our prop
22:24firm, now we know we can risk $300 per
22:27trade. If you want to keep it
22:29conservative, 200. And even if you
22:31exceed by a small amount that calculated
22:33losses in a row, you're still going to
22:35be within the rules of the prop firm,
22:37but you're scaling pretty much as high
22:38as you can to be able to fit the
22:40constraints of that account and be less
22:41likely to blow up and waste money on the
22:43evaluations and be able to size
22:45accordingly without using that
22:46percentage scale, considering they're
22:48giving you an account balance to start.
22:50Which brings me to lesson number 10. And
22:52that is your surroundings. While you're
22:54going through this learning process,
22:55what I found is it's important to just
22:57basically not tell anybody what you're
22:59doing. Okay, because all of the ideology
23:01that I've just explained to you, natural
23:03people are going to give you the
23:05absolute opposite advice of what you
23:07should be doing to succeed in trading.
23:08So, you're better off just keeping it to
23:10yourself so you can fortify that way of
23:12thinking that I promise you is less
23:14common than you think. Once you
23:15understand it, it seems obvious, but
23:17then you start watching how other people
23:18think and you're like, "That doesn't
23:19make any sense." Sorry if I unpacked
23:21that for you and that's going to be a
23:22struggle you face for the rest of your
23:23life in regular life, but you want to be
23:25profitable at trading. So, the second
23:27thing is having accountability. Okay,
23:29doing this by yourself is really
23:30difficult. When I first started off in
23:32trading, I had partners that would trade
23:34with me and we would work on things
23:35together. Someone that was in a similar
23:37situation as me, learning the same
23:39things. But, keep in mind, the wrong
23:41partner can steer you completely in the
23:43opposite direction as well. Okay,
23:45there's a lot of communities online
23:46where people are doing completely random
23:48things, treating trading like gambling.
23:50That just as easily can drag you down.
23:52Okay, having community where everyone's
23:53working on the same exact thing is the
23:55exact reason why I built a trading
23:57community called Nevada Trades. Number
23:59one, everyone's been through the base
24:00layer education that takes you from
24:02square one, teaches you pretty much
24:04everything that I've learned, as well as
24:05all of my strategies, and then an
24:07environment for people to work on it
24:09together, watch us trade it live, ask
24:11questions, and develop, and be around
24:13like-minded people. Focusing on those
24:15system-based goals, right? This is one
24:17of our students that recently did this.
24:18You can see he's even saying, "Pick one
24:20specific model or system and then refine
24:22your own backtesting to where you can
24:24confidently start trading the live
24:26market." And you can see recently, this
24:27is the month that Brandon just posted.
24:29see most of my students are talking in
24:31terms of risk units. 8.4 R for Haley, 2
24:35R, 5.3 R, 7 R. Okay, once again,
24:38focusing on system-based goals, going
24:40through a process that works, then being
24:42able to fund accounts, take payouts,
24:44grow. That's what it's all about. That's
24:46how you actually master trading and what
24:48I've learned from doing this for over 9
24:49years. Okay, here's another video if you
24:51want to learn more about how I trade.
24:53Make sure you hit the like button if
24:54you're still here and you appreciated
24:55this video. Subscribe if you want to
24:57know when I drop other content. You can
24:59check out our private trading team here
25:00if you want to trade alongside us. Also,
25:02every morning we do pre-market analysis.
25:04You can check that out in the Discord,
25:06which is in our description. But, until
25:07next time, guys, I will see you all in
25:09the next video.

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