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Version 1.1 by Drunk Monkey on 2020-11-20 11:22
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Drunk Monkey 1.1 1 1
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3 ICT: Okay, this is part four of the if I
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7 could go back and tell myself what I
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11 know now series this is a hypothetical
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15 conversation with my younger self.
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19 Alright, so you're looking at all your
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23 books and such Michael and you're
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27 preparing your way to get to financial
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31 freedom. And while you're practicing,
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35 and the question is going to be is when
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39 do you leave demo trading or at the time
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43 when we first started, it was paper
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47 trading. So when am I ready for live
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51 funds? It begins with proof of concept.
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55 proof of concept, you have to show a
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59 minimum of six months consistency
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63 managed to keep risk below 3% maximum
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67 and emotionally whether strings of
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71 losses
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75 so went to live demo First and foremost,
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79 you have to have proof of concept. And
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83 you're gonna be doing a lot of things,
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87 you mean buying a lot of books. And I
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91 wish I could tell you to save all that
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95 money. Because you're going to have over
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99 2000 books and less than a dozen of them
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103 were really worth the time reading. A
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107 lot of it's going to be regurgitated
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111 things. So you want to focus on the
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115 following things. If you do this,
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119 Michael, you're going to be able to fast
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123 track your way to get through a lot of
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127 the hardships that you're that you will
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131 unknowingly enter yourself into and
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135 chase and pursue things that are going
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139 to lead to more loss and confusion. The
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143 first thing we're going to be focusing
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147 on is seasonal tendencies. You want to
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151 ignore the things that Jake Bernstein
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155 talks about. The more research group
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159 that puts out seasonal tendencies, this
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163 person has the best seasonal tendencies
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167 mrci.com is the website, you're going to
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171 find that if you stick to that
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175 gentleman's seasonal tendencies, they're
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179 going to serve you exceptionally well.
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183 Quarterly shifts, you're looking for
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187 moves that move every three to four
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191 months. Now, the markets always have
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195 some specific gyration. But focusing
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199 primarily on the major moves that should
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203 transpire over the next three to four
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207 months. If you focus there, you're going
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211 to find a lot of these mega trades.
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215 Monthly bias. Try to formulate all of
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219 the things that you're doing every
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223 single day to get in sync with the
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227 monthly bias. What is the monthly by
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231 select way to do is it likely to trade
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235 higher is it likely to trade lower
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239 focusing within that Particular bias
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243 within a specific quarterly shift within
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247 a specific seasonal tendency is going to
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251 give you the highest odds probability of
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255 success than anything you're going to
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259 read in any of the books that you buy.
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263 So, if I could grab you and shake you by
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267 the lapels, Michael, this is exactly
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271 what I would stress to you, because
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275 everything that you're doing prior to
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279 identifying This is creating the
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283 problem. All the frustrations, you're
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287 feeling all the I want to know where
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291 it's going next. This is the three
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295 things that helps figure that out for
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299 you. But it's gonna be years before you
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303 discern that. But if I could convince
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307 you right now, this is what I would tell
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311 you to do. Focus on these top three
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315 things. Once you have that determined,
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319 then you can focus on a weekly profile.
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323 Now if it's bullish, then you're
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327 expected to have a weekly profile.
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331 That's bullish at the time of recording,
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335 your world renowned for knowing and
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339 teaching how the weekly bias and weekly
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343 range is typically formed with the
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347 higher low form generally by Tuesday's
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351 long and open if not by Wednesday. So if
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355 you can focus on that seasonal tendency
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359 that's bullish or bearish, and you're
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363 looking for that quarterly shift that's
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367 in align with that seasonal tendency.
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371 And you have factored into what the
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375 monthly bias should be in concert with
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379 those two previous ideas. Your weekly
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383 profile should be in alignment as well.
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387 So you're not trying to go against the
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391 underlying momentum, you're trying to
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395 get in sync with the institutional order
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399 flow. Once you identify the seasonal
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403 tendency, and you're focusing on a
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407 quarterly shift or a price swing that
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411 should transpire over the next three to
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415 four months. And your monthly bias is
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419 determined to be bullish or bearish
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423 relative to those seasonal tendencies
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427 and next quarterly shift and you're
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431 working with any weekly profile, it's
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435 bullish or bearish relative to the idea
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439 of that, what monthly bias and quarterly
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443 shift and seasonal tendency, the daily
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447 template. That means what type of day
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451 are we going to have? Did we just come
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455 off of a big range day, or a series of
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459 big range days because we're probably
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463 going to contract and go into small
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467 ranges. But if we do go into a small
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471 range, it's going to be a short term
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475 event that should lead to a large
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479 expansion in the direction of the
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483 monthly bias in expectation is a
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487 quarterly shift that you're looking for
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489 123
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491 and within alignment of the seasonal
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495 tendency. The Daily template is
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499 basically your power three concept where
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503 it's the open, high, low and close
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507 formation of the daily bar. You're
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511 looking for accumulation, manipulation
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515 and distribution.
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519 You want us spend a lot of time studying
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523 time of day. Long and open has specific
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527 characteristics that generally make the
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531 higher low of the day. Not all the time.
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535 But most of the time. New York is a
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539 continuation of whatever has transpired
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543 in London. Unless you've reached a
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547 higher timeframe level or key level that
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551 may introduce a new york session market
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555 reversal profile. London closes
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559 typically the opposite end of the daily
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563 range, or will be opposing the higher
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567 low formed in London open. Focusing on a
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571 time of day, within all these specific
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575 studies are going to put you in the
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579 highest order of probability doesn't
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583 mean you're going to not take losses you
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587 will. But sticking to this in this
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591 protocol is going to lead to the longest
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595 stretch of consistency and continuity in
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599 your trading and you're ever going to
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603 find doing anything else.
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607 Minimum six months consistency. Now, I
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611 understand you're excited. And you see
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615 there's a lot of things ahead of you,
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619 Michael. And you've made that plan of
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623 retiring at 40. And newsflash, you get
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626 00:07:23,070 ~-~-> 00:07:27,210
627 there. But try not to rush profits.
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631 There's going to be a transition. You
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633 159
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635 don't know when it's going to occur. But
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637 160
638 00:07:32,010 ~-~-> 00:07:34,290
639 it is when you start trading the bond
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641 161
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643 market. The bond market starts serving
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645 162
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647 you very well. And then you discover
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649 163
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651 that you can do far more per week than
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653 164
654 00:07:41,580 ~-~-> 00:07:43,920
655 you could with just one lot by using
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657 165
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659 more money management. And the
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661 166
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663 enticement is going to be get there
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665 167
666 00:07:52,230 ~-~-> 00:07:54,780
667 quicker, get there quicker, and you
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669 168
670 00:07:54,780 ~-~-> 00:07:59,640
671 discover the power of compound interest,
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673 169
674 00:07:59,640 ~-~-> 00:08:03,330
675 but Don't, at that time, understand the
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677 170
678 00:08:05,010 ~-~-> 00:08:07,560
679 depths that it can take you down with.
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681 171
682 00:08:07,680 ~-~-> 00:08:09,960
683 It's very powerful, but it's a double
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685 172
686 00:08:09,960 ~-~-> 00:08:14,490
687 edged sword. So if I could change your
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689 173
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691 mind about something speaking to you
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693 174
694 00:08:16,230 ~-~-> 00:08:21,450
695 now, you should do your best to try not
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697 175
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699 to be profitable or rush profits. And
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701 176
702 00:08:24,390 ~-~-> 00:08:26,760
703 what I mean by that, taking more trades
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705 177
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707 than necessary. In other words, your
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711 trade frequency, Michael, when you first
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713 179
714 00:08:30,510 ~-~-> 00:08:33,090
715 start is going to be horrendous. There's
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717 180
718 00:08:33,090 ~-~-> 00:08:34,620
719 going to be days where you actually have
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722 00:08:34,620 ~-~-> 00:08:39,540
723 taken 30 entries. And none of them are
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727 profitable. Because you're going back
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729 183
730 00:08:41,670 ~-~-> 00:08:43,920
731 and forth, back and forth, thinking
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733 184
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735 you're going to get the right direction,
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737 185
738 00:08:45,870 ~-~-> 00:08:48,270
739 right? And it's not going to work out
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741 186
742 00:08:48,270 ~-~-> 00:08:50,580
743 for you. This is the reason why you have
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745 187
746 00:08:50,580 ~-~-> 00:08:52,920
747 to work with the previous information or
748
749 188
750 00:08:52,920 ~-~-> 00:08:54,810
751 you work from a macro perspective down.
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753 189
754 00:08:55,200 ~-~-> 00:08:57,870
755 If you do that. You will also be more
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757 190
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759 controlled over your decision. Making
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761 191
762 00:09:01,350 ~-~-> 00:09:02,760
763 and you won't be in a rush to make
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765 192
766 00:09:02,760 ~-~-> 00:09:05,220
767 profits. rushing to profit is the
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769 193
770 00:09:05,220 ~-~-> 00:09:08,520
771 surest, fastest way to lose money. It
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773 194
774 00:09:08,520 ~-~-> 00:09:10,320
775 doesn't feel like it, especially when
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777 195
778 00:09:10,320 ~-~-> 00:09:11,490
779 you're buying all these books because
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781 196
782 00:09:11,490 ~-~-> 00:09:13,470
783 all these books are sugarcoating
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785 197
786 00:09:13,500 ~-~-> 00:09:15,690
787 everything. They're over simplifying
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789 198
790 00:09:15,720 ~-~-> 00:09:17,580
791 everything and giving you a false sense
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793 199
794 00:09:17,580 ~-~-> 00:09:19,410
795 of security because of these indicators.
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797 200
798 00:09:19,920 ~-~-> 00:09:21,990
799 And the indicators are not the secret.
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801 201
802 00:09:22,470 ~-~-> 00:09:24,180
803 Those indicators are just the red
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805 202
806 00:09:24,180 ~-~-> 00:09:26,070
807 herring and the gimmick that that books
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809 203
810 00:09:26,100 ~-~-> 00:09:30,780
811 using to sell. Keep them on the return
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813 204
814 00:09:30,810 ~-~-> 00:09:32,880
815 as the focus. Now you're going to be
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817 205
818 00:09:32,880 ~-~-> 00:09:36,870
819 trading starting with commodities, and
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821 206
822 00:09:36,900 ~-~-> 00:09:38,670
823 you're focusing on the dollar amount,
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825 207
826 00:09:38,670 ~-~-> 00:09:40,470
827 how much can I make today? How much
828
829 208
830 00:09:40,470 ~-~-> 00:09:43,950
831 money can I make this week? And as soon
832
833 209
834 00:09:43,950 ~-~-> 00:09:46,230
835 as you take that first loss for the
836
837 210
838 00:09:46,230 ~-~-> 00:09:49,230
839 month, this is when you go into a
840
841 211
842 00:09:49,230 ~-~-> 00:09:51,750
843 tailspin because you're in a hurry to
844
845 212
846 00:09:51,750 ~-~-> 00:09:53,520
847 get that back. You don't like taking
848
849 213
850 00:09:53,520 ~-~-> 00:09:55,710
851 losses and I want you to understand
852
853 214
854 00:09:55,710 ~-~-> 00:10:00,750
855 something 27 years from now You're going
856
857 215
858 00:10:00,750 ~-~-> 00:10:02,790
859 to be able to look back and count up an
860
861 216
862 00:10:02,790 ~-~-> 00:10:05,220
863 enormous amount of money that if you
864
865 217
866 00:10:05,220 ~-~-> 00:10:07,590
867 collectively add it all up, all of your
868
869 218
870 00:10:07,590 ~-~-> 00:10:11,070
871 losses are enormous. And there is
872
873 219
874 00:10:11,070 ~-~-> 00:10:13,950
875 nothing wrong with that, because every
876
877 220
878 00:10:13,950 ~-~-> 00:10:16,740
879 trader loses. But you got to keep the
880
881 221
882 00:10:16,740 ~-~-> 00:10:18,990
883 focus on the monthly return. It doesn't
884
885 222
886 00:10:18,990 ~-~-> 00:10:20,820
887 make a difference if you have three
888
889 223
890 00:10:20,820 ~-~-> 00:10:24,150
891 losing trading days out of the week, or
892
893 224
894 00:10:24,270 ~-~-> 00:10:27,360
895 you had no winning positive days for the
896
897 225
898 00:10:27,360 ~-~-> 00:10:29,310
899 week, but you come out ahead on a
900
901 226
902 00:10:29,310 ~-~-> 00:10:31,770
903 monthly if your monthly return is
904
905 227
906 00:10:31,770 ~-~-> 00:10:35,640
907 consistently higher than 1%. You're
908
909 228
910 00:10:35,640 ~-~-> 00:10:37,890
911 doing exceptionally well. It doesn't
912
913 229
914 00:10:37,890 ~-~-> 00:10:40,410
915 feel like it. It doesn't sound like it.
916
917 230
918 00:10:40,500 ~-~-> 00:10:43,080
919 You think that everyone that super elite
920
921 231
922 00:10:43,230 ~-~-> 00:10:46,350
923 is doing 500% per month because that's
924
925 232
926 00:10:46,350 ~-~-> 00:10:48,090
927 the impression that these books that
928
929 233
930 00:10:48,090 ~-~-> 00:10:49,470
931 you're buying and wasting money on
932
933 234
934 00:10:49,470 ~-~-> 00:10:52,140
935 Michael are giving you. They don't do
936
937 235
938 00:10:52,140 ~-~-> 00:10:54,210
939 that. They aren't making those types of
940
941 236
942 00:10:54,210 ~-~-> 00:10:56,280
943 returns. And you want to be able to
944
945 237
946 00:10:56,280 ~-~-> 00:10:59,250
947 focus primarily on what you've done over
948
949 238
950 00:10:59,250 ~-~-> 00:11:02,040
951 the course of Four weeks or so. And that
952
953 239
954 00:11:02,040 ~-~-> 00:11:05,340
955 result in that return is your goal.
956
957 240
958 00:11:05,700 ~-~-> 00:11:07,290
959 You're not trying to get an everyday
960
961 241
962 00:11:07,290 ~-~-> 00:11:08,820
963 percentage, you're not trying to get an
964
965 242
966 00:11:08,820 ~-~-> 00:11:10,890
967 every week percentage. You're looking at
968
969 243
970 00:11:10,890 ~-~-> 00:11:14,190
971 how you close each month, and this month
972
973 244
974 00:11:14,220 ~-~-> 00:11:15,930
975 positive because if it's positive,
976
977 245
978 00:11:16,860 ~-~-> 00:11:18,300
979 that's better than a loss. If you
980
981 246
982 00:11:18,300 ~-~-> 00:11:19,800
983 continuously do that you're going in the
984
985 247
986 00:11:19,800 ~-~-> 00:11:22,080
987 right direction. But trying not to rush
988
989 248
990 00:11:22,080 ~-~-> 00:11:24,270
991 profits and try not to look beyond the
992
993 249
994 00:11:24,270 ~-~-> 00:11:26,190
995 scope of what your monthly return is.
996
997 250
998 00:11:28,860 ~-~-> 00:11:33,330
999 Invite the possibility of being wrong. I
1000
1001 251
1002 00:11:33,330 ~-~-> 00:11:35,910
1003 understand obsessive compulsive
1004
1005 252
1006 00:11:35,910 ~-~-> 00:11:37,920
1007 disorder. We struggle with it and we
1008
1009 253
1010 00:11:37,920 ~-~-> 00:11:41,220
1011 still struggle with it in our 40s but I
1012
1013 254
1014 00:11:41,220 ~-~-> 00:11:42,270
1015 want you to understand something
1016
1017 255
1018 00:11:42,270 ~-~-> 00:11:42,660
1019 Michael,
1020
1021 256
1022 00:11:44,130 ~-~-> 00:11:46,230
1023 you are not going to be right 100% of
1024
1025 257
1026 00:11:46,230 ~-~-> 00:11:48,690
1027 the time and early on the first couple
1028
1029 258
1030 00:11:48,690 ~-~-> 00:11:51,510
1031 years. You're spending time trying to
1032
1033 259
1034 00:11:51,660 ~-~-> 00:11:55,320
1035 perfect and eliminate the possibility of
1036
1037 260
1038 00:11:55,320 ~-~-> 00:11:58,320
1039 you being wrong. And it's a farce don't
1040
1041 261
1042 00:11:58,320 ~-~-> 00:12:00,000
1043 do that you're going to waste time doing
1044
1045 262
1046 00:12:00,000 ~-~-> 00:12:02,340
1047 That there is no perfect person, there
1048
1049 263
1050 00:12:02,340 ~-~-> 00:12:05,070
1051 is no perfect trader. And you still,
1052
1053 264
1054 00:12:05,340 ~-~-> 00:12:07,080
1055 with almost three decades of experience,
1056
1057 265
1058 00:12:07,080 ~-~-> 00:12:09,630
1059 I'm speaking to you now, you are still
1060
1061 266
1062 00:12:09,630 ~-~-> 00:12:12,150
1063 not perfect, your exits aren't perfect,
1064
1065 267
1066 00:12:12,180 ~-~-> 00:12:13,710
1067 your entries aren't perfect all the
1068
1069 268
1070 00:12:13,710 ~-~-> 00:12:16,710
1071 time. Perfection is still going to evade
1072
1073 269
1074 00:12:16,710 ~-~-> 00:12:19,740
1075 you, but you do not need perfection when
1076
1077 270
1078 00:12:19,740 ~-~-> 00:12:22,800
1079 you're wrong. Many times that's going to
1080
1081 271
1082 00:12:22,800 ~-~-> 00:12:25,170
1083 lead to a more profitable trade or
1084
1085 272
1086 00:12:25,740 ~-~-> 00:12:26,880
1087 identifying that you're wrong and
1088
1089 273
1090 00:12:26,880 ~-~-> 00:12:28,260
1091 getting out and staying on the sidelines
1092
1093 274
1094 00:12:28,260 ~-~-> 00:12:31,800
1095 preserves your capital. by preserving
1096
1097 275
1098 00:12:31,800 ~-~-> 00:12:34,230
1099 your capital, you don't go into spending
1100
1101 276
1102 00:12:34,950 ~-~-> 00:12:37,140
1103 your mental capital in the mental
1104
1105 277
1106 00:12:37,140 ~-~-> 00:12:38,910
1107 capital is how much money you're really
1108
1109 278
1110 00:12:38,910 ~-~-> 00:12:41,880
1111 willing to lose. You may have $20,000 in
1112
1113 279
1114 00:12:41,880 ~-~-> 00:12:43,590
1115 that trading account, but you're really
1116
1117 280
1118 00:12:43,590 ~-~-> 00:12:46,110
1119 not comfortable if you lost 5000 of it.
1120
1121 281
1122 00:12:46,440 ~-~-> 00:12:47,760
1123 So what are you really trading with
1124
1125 282
1126 00:12:48,570 ~-~-> 00:12:52,140
1127 $5,000 but the $20,000 is just lipstick.
1128
1129 283
1130 00:12:52,410 ~-~-> 00:12:55,170
1131 The extra 15,000 is padding you hope you
1132
1133 284
1134 00:12:55,170 ~-~-> 00:12:57,660
1135 never go into and as soon as you do,
1136
1137 285
1138 00:12:58,320 ~-~-> 00:13:00,000
1139 everything gets abandoned the trailer
1140
1141 286
1142 00:13:00,000 ~-~-> 00:13:02,700
1143 Plan, methodology. All of that goes up
1144
1145 287
1146 00:13:02,700 ~-~-> 00:13:04,590
1147 door risk management, trade management,
1148
1149 288
1150 00:13:04,950 ~-~-> 00:13:07,350
1151 all of it tossed out because now you're
1152
1153 289
1154 00:13:07,350 ~-~-> 00:13:10,170
1155 emotional, and you can't act that way.
1156
1157 290
1158 00:13:11,760 ~-~-> 00:13:13,530
1159 Invite the possibility of being wrong,
1160
1161 291
1162 00:13:13,590 ~-~-> 00:13:16,710
1163 identify the characteristics that leads
1164
1165 292
1166 00:13:16,710 ~-~-> 00:13:20,040
1167 to your trade idea being wrong, identify
1168
1169 293
1170 00:13:20,040 ~-~-> 00:13:22,110
1171 it before you even put the trade on. So
1172
1173 294
1174 00:13:22,110 ~-~-> 00:13:25,350
1175 in other words, what negates the idea
1176
1177 295
1178 00:13:25,740 ~-~-> 00:13:29,160
1179 what makes it most likely to fail. If
1180
1181 296
1182 00:13:29,160 ~-~-> 00:13:31,350
1183 those trades show signatures of that
1184
1185 297
1186 00:13:31,380 ~-~-> 00:13:34,470
1187 occurring, do not hesitate to simply
1188
1189 298
1190 00:13:34,470 ~-~-> 00:13:36,660
1191 close the trade, preserve capital. If
1192
1193 299
1194 00:13:36,660 ~-~-> 00:13:40,050
1195 you do that, you will be on a fast track
1196
1197 300
1198 00:13:40,050 ~-~-> 00:13:44,070
1199 to preserving your mental capacity, your
1200
1201 301
1202 00:13:44,490 ~-~-> 00:13:47,010
1203 willingness to stay studying, even
1204
1205 302
1206 00:13:47,010 ~-~-> 00:13:49,380
1207 though you're not taking trades. If you
1208
1209 303
1210 00:13:49,380 ~-~-> 00:13:50,880
1211 don't do this, you're going to find
1212
1213 304
1214 00:13:50,880 ~-~-> 00:13:53,760
1215 yourself going into the longest tailspin
1216
1217 305
1218 00:13:53,760 ~-~-> 00:13:57,300
1219 in terms of pursuing something that is
1220
1221 306
1222 00:13:57,300 ~-~-> 00:13:59,760
1223 eluding you because you're causing it.
1224
1225 307
1226 00:14:00,540 ~-~-> 00:14:02,910
1227 You're trying to be perfect. And it
1228
1229 308
1230 00:14:02,910 ~-~-> 00:14:04,920
1231 won't exist, it won't, it won't happen,
1232
1233 309
1234 00:14:04,920 ~-~-> 00:14:07,260
1235 you're not going to be there that will
1236
1237 310
1238 00:14:07,260 ~-~-> 00:14:12,270
1239 always evade. Avoid chasing parabolic
1240
1241 311
1242 00:14:12,270 ~-~-> 00:14:18,180
1243 equity searches. I can recall many of
1244
1245 312
1246 00:14:18,180 ~-~-> 00:14:21,630
1247 the things that we did. And there's some
1248
1249 313
1250 00:14:21,630 ~-~-> 00:14:24,870
1251 of those instances where it worked out
1252
1253 314
1254 00:14:24,870 ~-~-> 00:14:28,230
1255 in our favor. But most of the time, it
1256
1257 315
1258 00:14:28,230 ~-~-> 00:14:32,370
1259 didn't. So, avoiding parabolic equity
1260
1261 316
1262 00:14:32,370 ~-~-> 00:14:34,680
1263 surges is one of the things that it's
1264
1265 317
1266 00:14:34,680 ~-~-> 00:14:35,730
1267 going to be very hard for you because
1268
1269 318
1270 00:14:35,730 ~-~-> 00:14:37,830
1271 the first one you get with Chicago Board
1272
1273 319
1274 00:14:37,830 ~-~-> 00:14:41,370
1275 trade wheat, that sets the stage for you
1276
1277 320
1278 00:14:41,370 ~-~-> 00:14:43,350
1279 thinking that you can do this every
1280
1281 321
1282 00:14:43,350 ~-~-> 00:14:45,360
1283 week. And it doesn't work that way.
1284
1285 322
1286 00:14:45,810 ~-~-> 00:14:48,930
1287 Avoid trying to allow your account to
1288
1289 323
1290 00:14:48,960 ~-~-> 00:14:51,930
1291 grow exponentially with these parabolic
1292
1293 324
1294 00:14:51,930 ~-~-> 00:14:54,060
1295 equity surges where you're getting
1296
1297 325
1298 00:14:54,870 ~-~-> 00:14:59,190
1299 hundred plus returns quickly. Try not to
1300
1301 326
1302 00:14:59,190 ~-~-> 00:15:02,670
1303 do that. Number one, you have to have
1304
1305 327
1306 00:15:02,670 ~-~-> 00:15:04,710
1307 the right market conditions. You have to
1308
1309 328
1310 00:15:04,710 ~-~-> 00:15:07,050
1311 have everything on point your entry,
1312
1313 329
1314 00:15:07,050 ~-~-> 00:15:08,880
1315 your stop your trade management, your
1316
1317 330
1318 00:15:08,880 ~-~-> 00:15:12,180
1319 exits, there are so many things that
1320
1321 331
1322 00:15:12,180 ~-~-> 00:15:14,370
1323 have to line up for you to deliver with
1324
1325 332
1326 00:15:14,400 ~-~-> 00:15:17,700
1327 Olympic level equity surges on a
1328
1329 333
1330 00:15:17,700 ~-~-> 00:15:21,870
1331 consistent basis. It's not realistic
1332
1333 334
1334 00:15:22,230 ~-~-> 00:15:26,430
1335 going into this. Now. It's going to
1336
1337 335
1338 00:15:26,430 ~-~-> 00:15:27,810
1339 eventually get to the point where you
1340
1341 336
1342 00:15:27,810 ~-~-> 00:15:29,850
1343 can see these things and predict them.
1344
1345 337
1346 00:15:30,060 ~-~-> 00:15:32,400
1347 But it won't be in the first few years.
1348
1349 338
1350 00:15:33,450 ~-~-> 00:15:34,860
1351 You're going to make the mistake in
1352
1353 339
1354 00:15:34,860 ~-~-> 00:15:35,940
1355 believing that you're better than you
1356
1357 340
1358 00:15:35,940 ~-~-> 00:15:40,020
1359 really are far before you really get on
1360
1361 341
1362 00:15:40,020 ~-~-> 00:15:41,220
1363 what it is you should be doing as a
1364
1365 342
1366 00:15:41,220 ~-~-> 00:15:45,810
1367 trader. Reduce leverage when taking
1368
1369 343
1370 00:15:45,810 ~-~-> 00:15:48,960
1371 losses. Now this is something that I can
1372
1373 344
1374 00:15:48,960 ~-~-> 00:15:51,810
1375 remember we did very poorly, when we
1376
1377 345
1378 00:15:51,810 ~-~-> 00:15:55,860
1379 would take losses. You would increase
1380
1381 346
1382 00:15:56,490 ~-~-> 00:15:58,260
1383 the amount of contracts trying to
1384
1385 347
1386 00:15:58,260 ~-~-> 00:16:00,420
1387 recapture and get more equity. Back in
1388
1389 348
1390 00:16:00,420 ~-~-> 00:16:02,640
1391 the account, because we didn't like the
1392
1393 349
1394 00:16:02,640 ~-~-> 00:16:04,110
1395 way it felt when money was taken out,
1396
1397 350
1398 00:16:04,200 ~-~-> 00:16:05,730
1399 not only did we not like the fact that
1400
1401 351
1402 00:16:05,730 ~-~-> 00:16:08,580
1403 we were wrong, but we didn't like the
1404
1405 352
1406 00:16:08,580 ~-~-> 00:16:10,140
1407 fact that we were wrong and we were
1408
1409 353
1410 00:16:10,440 ~-~-> 00:16:15,720
1411 robbed of equity. And we personify that
1412
1413 354
1414 00:16:16,680 ~-~-> 00:16:18,960
1415 and made it someone or something that
1416
1417 355
1418 00:16:18,960 ~-~-> 00:16:21,930
1419 we're going to get revenge on. And that
1420
1421 356
1422 00:16:22,020 ~-~-> 00:16:24,090
1423 I can look back and say that that was
1424
1425 357
1426 00:16:24,180 ~-~-> 00:16:27,900
1427 90% of the biggest losses and the
1428
1429 358
1430 00:16:27,900 ~-~-> 00:16:30,870
1431 biggest and longest streaks of losing
1432
1433 359
1434 00:16:30,870 ~-~-> 00:16:33,540
1435 trades were linked to that very thing.
1436
1437 360
1438 00:16:36,090 ~-~-> 00:16:38,850
1439 If we would have just simply reduced the
1440
1441 361
1442 00:16:38,850 ~-~-> 00:16:41,070
1443 leverage. For instance, if we were
1444
1445 362
1446 00:16:41,070 ~-~-> 00:16:43,890
1447 trading 10 contracts of the standard
1448
1449 363
1450 00:16:43,890 ~-~-> 00:16:45,180
1451 Poor's futures contract,
1452
1453 364
1454 00:16:45,810 ~-~-> 00:16:49,110
1455 and we took a loss of 2%. The next trade
1456
1457 365
1458 00:16:49,170 ~-~-> 00:16:53,730
1459 should be five lots. And if we take a
1460
1461 366
1462 00:16:53,730 ~-~-> 00:16:56,970
1463 loss there, next trade should be to lots
1464
1465 367
1466 00:16:57,930 ~-~-> 00:17:00,000
1467 and keep reducing until you make 50%
1468
1469 368
1470 00:17:00,000 ~-~-> 00:17:02,910
1471 Have a previous loss back, then you can
1472
1473 369
1474 00:17:02,910 ~-~-> 00:17:05,220
1475 go back up one scale in the money
1476
1477 370
1478 00:17:05,220 ~-~-> 00:17:06,870
1479 management and risk trade management.
1480
1481 371
1482 00:17:08,130 ~-~-> 00:17:10,020
1483 But if you don't do this, you're going
1484
1485 372
1486 00:17:10,020 ~-~-> 00:17:13,560
1487 to have a wild roller coaster equity
1488
1489 373
1490 00:17:13,560 ~-~-> 00:17:15,840
1491 swings and many accounts being dusted.
1492
1493 374
1494 00:17:16,980 ~-~-> 00:17:19,080
1495 If you don't do this, you're not going
1496
1497 375
1498 00:17:19,080 ~-~-> 00:17:21,060
1499 to build in plateaus and your equity,
1500
1501 376
1502 00:17:22,200 ~-~-> 00:17:23,340
1503 there's going to be a series of winning
1504
1505 377
1506 00:17:23,340 ~-~-> 00:17:25,050
1507 trades. And then what's going to
1508
1509 378
1510 00:17:25,050 ~-~-> 00:17:26,490
1511 eventually come that you don't like to
1512
1513 379
1514 00:17:26,580 ~-~-> 00:17:28,680
1515 admit, it's going to be a losing trade
1516
1517 380
1518 00:17:28,680 ~-~-> 00:17:31,680
1519 or two or three. And if you keep risking
1520
1521 381
1522 00:17:31,680 ~-~-> 00:17:34,080
1523 the same amount, your equity drawdown is
1524
1525 382
1526 00:17:34,080 ~-~-> 00:17:36,240
1527 going to be notable and horrendous if
1528
1529 383
1530 00:17:36,240 ~-~-> 00:17:39,300
1531 you don't control yourself. So you want
1532
1533 384
1534 00:17:39,300 ~-~-> 00:17:41,040
1535 to reduce the leverage after taking
1536
1537 385
1538 00:17:41,040 ~-~-> 00:17:43,860
1539 losses because then the inevitable is
1540
1541 386
1542 00:17:43,860 ~-~-> 00:17:44,730
1543 going to happen. You're gonna have a
1544
1545 387
1546 00:17:44,730 ~-~-> 00:17:46,560
1547 series of losses. But if you keep
1548
1549 388
1550 00:17:46,560 ~-~-> 00:17:51,150
1551 risking 2% 2% 2% 2% it's going to have
1552
1553 389
1554 00:17:51,330 ~-~-> 00:17:54,450
1555 greater impact on the drawdown that you
1556
1557 390
1558 00:17:54,450 ~-~-> 00:17:57,060
1559 suffer. And it's much more work on your
1560
1561 391
1562 00:17:57,060 ~-~-> 00:18:03,960
1563 part to recapture that. Be patient will
1564
1565 392
1566 00:18:03,960 ~-~-> 00:18:08,460
1567 draw down recovery. Losing still sucks.
1568
1569 393
1570 00:18:08,880 ~-~-> 00:18:10,710
1571 When you get stopped out, it's not fun.
1572
1573 394
1574 00:18:10,920 ~-~-> 00:18:12,450
1575 But it's a business transaction,
1576
1577 395
1578 00:18:12,660 ~-~-> 00:18:16,350
1579 eventually, around late 20s, you're
1580
1581 396
1582 00:18:16,350 ~-~-> 00:18:18,510
1583 going to see it as just that. It still
1584
1585 397
1586 00:18:18,510 ~-~-> 00:18:20,040
1587 won't feel good. And you'll hate that
1588
1589 398
1590 00:18:20,040 ~-~-> 00:18:22,470
1591 you have them. But you'll come to grips
1592
1593 399
1594 00:18:22,470 ~-~-> 00:18:24,780
1595 with a little bit. But be patient
1596
1597 400
1598 00:18:24,780 ~-~-> 00:18:26,040
1599 withdrawal data recovery. In other
1600
1601 401
1602 00:18:26,040 ~-~-> 00:18:28,050
1603 words, don't rush to get it back. If you
1604
1605 402
1606 00:18:28,050 ~-~-> 00:18:30,390
1607 have a day trade or two, that shares a
1608
1609 403
1610 00:18:30,390 ~-~-> 00:18:33,330
1611 net loss for the day, stop the next
1612
1613 404
1614 00:18:33,330 ~-~-> 00:18:35,400
1615 trading day. It's very easy to start
1616
1617 405
1618 00:18:35,430 ~-~-> 00:18:37,620
1619 building that back up and don't try to
1620
1621 406
1622 00:18:37,620 ~-~-> 00:18:40,800
1623 get it back in one trade. You have made
1624
1625 407
1626 00:18:40,800 ~-~-> 00:18:43,170
1627 so many errors I can tell you right now,
1628
1629 408
1630 00:18:43,530 ~-~-> 00:18:46,020
1631 at least three dozen of them and they
1632
1633 409
1634 00:18:46,020 ~-~-> 00:18:50,730
1635 were all in soybeans. Those trades ended
1636
1637 410
1638 00:18:50,730 ~-~-> 00:18:53,370
1639 up being parlayed into huge losses and
1640
1641 411
1642 00:18:53,370 ~-~-> 00:18:55,530
1643 to lost accounts. You killed two
1644
1645 412
1646 00:18:55,530 ~-~-> 00:18:59,670
1647 accounts. You don't see it yet. Oh, but
1648
1649 413
1650 00:18:59,670 ~-~-> 00:19:02,640
1651 it's coming. You will have blown to
1652
1653 414
1654 00:19:02,820 ~-~-> 00:19:05,700
1655 futures accounts trading the soybean
1656
1657 415
1658 00:19:05,700 ~-~-> 00:19:08,760
1659 market, because you're trying to get
1660
1661 416
1662 00:19:08,760 ~-~-> 00:19:11,790
1663 back your losses, and you get caught in
1664
1665 417
1666 00:19:11,790 ~-~-> 00:19:14,580
1667 a couple limit moves. And you can't get
1668
1669 418
1670 00:19:14,580 ~-~-> 00:19:17,010
1671 out of those. And you end up suffering
1672
1673 419
1674 00:19:17,010 ~-~-> 00:19:18,870
1675 and blowing out the account. Because you
1676
1677 420
1678 00:19:18,870 ~-~-> 00:19:22,320
1679 are not being patient. You're not going
1680
1681 421
1682 00:19:22,320 ~-~-> 00:19:28,170
1683 to be patient. And you suffer the draw
1684
1685 422
1686 00:19:28,170 ~-~-> 00:19:32,940
1687 down. And the recovery of it is not only
1688
1689 423
1690 00:19:32,940 ~-~-> 00:19:35,070
1691 timeline basis. In other words, there's
1692
1693 424
1694 00:19:35,070 ~-~-> 00:19:37,710
1695 no deadline that you have to meet to get
1696
1697 425
1698 00:19:37,710 ~-~-> 00:19:41,580
1699 that money back. Immediate is what you
1700
1701 426
1702 00:19:41,580 ~-~-> 00:19:43,800
1703 feel like it has to be, but that's the
1704
1705 427
1706 00:19:43,800 ~-~-> 00:19:46,860
1707 trap. That's the trap. You have to avoid
1708
1709 428
1710 00:19:46,860 ~-~-> 00:19:49,590
1711 that. Michael, if you don't listen to
1712
1713 429
1714 00:19:49,590 ~-~-> 00:19:52,140
1715 me, you're going to find yourself
1716
1717 430
1718 00:19:52,470 ~-~-> 00:19:57,330
1719 chasing loss after loss after loss and
1720
1721 431
1722 00:19:57,330 ~-~-> 00:19:58,710
1723 you're not going to be thinking clearly
1724
1725 432
1726 00:19:58,920 ~-~-> 00:20:01,260
1727 you're going to get even more insanely
1728
1729 433
1730 00:20:01,260 ~-~-> 00:20:03,390
1731 re in raged, okay. It's what it's going
1732
1733 434
1734 00:20:03,390 ~-~-> 00:20:06,510
1735 to become. Because you think that the
1736
1737 435
1738 00:20:06,510 ~-~-> 00:20:07,800
1739 brokers on the other side clicking
1740
1741 436
1742 00:20:07,800 ~-~-> 00:20:11,340
1743 buttons just to get you and I can tell
1744
1745 437
1746 00:20:11,340 ~-~-> 00:20:14,010
1747 you honestly, looking back, you were
1748
1749 438
1750 00:20:14,010 ~-~-> 00:20:16,410
1751 just doing it wrong and doing it wrong a
1752
1753 439
1754 00:20:16,410 ~-~-> 00:20:21,420
1755 lot and very frequently pursuing
1756
1757 440
1758 00:20:21,420 ~-~-> 00:20:25,320
1759 something that is very easily accepted.
1760
1761 441
1762 00:20:25,710 ~-~-> 00:20:28,440
1763 Take the loss, go home for the day and
1764
1765 442
1766 00:20:28,440 ~-~-> 00:20:31,890
1767 see what happens tomorrow. If you don't
1768
1769 443
1770 00:20:31,890 ~-~-> 00:20:36,180
1771 do that, you're going to dust multiple
1772
1773 444
1774 00:20:36,180 ~-~-> 00:20:36,720
1775 accounts
1776
1777 445
1778 00:20:44,370 ~-~-> 00:20:46,440
1779 managed to keep risk below 3% maximum.
1780
1781 446
1782 00:20:49,530 ~-~-> 00:20:52,890
1783 Avoid large risk for large wins. Now,
1784
1785 447
1786 00:20:53,790 ~-~-> 00:20:56,760
1787 when you first start trading, you're
1788
1789 448
1790 00:20:56,760 ~-~-> 00:20:58,290
1791 going to read a couple things in
1792
1793 449
1794 00:20:58,710 ~-~-> 00:21:01,860
1795 commodity magazine. And it's going to
1796
1797 450
1798 00:21:01,860 ~-~-> 00:21:03,840
1799 inspire you to trade with a little bit
1800
1801 451
1802 00:21:03,840 ~-~-> 00:21:07,050
1803 larger risk. And you're going to pull
1804
1805 452
1806 00:21:07,050 ~-~-> 00:21:08,970
1807 out your calculator, and you're gonna be
1808
1809 453
1810 00:21:08,970 ~-~-> 00:21:10,920
1811 sitting at lunch while at work. And
1812
1813 454
1814 00:21:10,920 ~-~-> 00:21:12,630
1815 you're gonna think if I take my account,
1816
1817 455
1818 00:21:12,840 ~-~-> 00:21:18,300
1819 and I risk 810 12% per trade, I can do
1820
1821 456
1822 00:21:18,300 ~-~-> 00:21:21,090
1823 this or that in the time of the end of
1824
1825 457
1826 00:21:21,090 ~-~-> 00:21:23,280
1827 the month. If I do that 12 months in a
1828
1829 458
1830 00:21:23,280 ~-~-> 00:21:26,790
1831 row, I'll be able to buy this or that.
1832
1833 459
1834 00:21:28,380 ~-~-> 00:21:34,710
1835 Don't do that. Avoid large risk. You're
1836
1837 460
1838 00:21:34,710 ~-~-> 00:21:36,390
1839 not going to be consistent in the
1840
1841 461
1842 00:21:36,390 ~-~-> 00:21:38,580
1843 beginning. You think you are because the
1844
1845 462
1846 00:21:38,580 ~-~-> 00:21:41,280
1847 books that you bought are telling you
1848
1849 463
1850 00:21:41,490 ~-~-> 00:21:43,230
1851 that it's just simply just do this, do
1852
1853 464
1854 00:21:43,230 ~-~-> 00:21:44,730
1855 that and when the indicator says this,
1856
1857 465
1858 00:21:44,730 ~-~-> 00:21:45,870
1859 that's when you buy them an indicator
1860
1861 466
1862 00:21:45,870 ~-~-> 00:21:48,450
1863 says this, you sell and you're going to
1864
1865 467
1866 00:21:48,450 ~-~-> 00:21:49,890
1867 find out very quickly that this doesn't
1868
1869 468
1870 00:21:49,890 ~-~-> 00:21:52,710
1871 work that way. It's it's not that easy.
1872
1873 469
1874 00:21:55,170 ~-~-> 00:22:00,000
1875 Expect to make velocity your edge after
1876
1877 470
1878 00:22:00,000 ~-~-> 00:22:03,690
1879 spending almost 28 years doing this, I
1880
1881 471
1882 00:22:03,690 ~-~-> 00:22:06,600
1883 can tell you everyone still thinks that
1884
1885 472
1886 00:22:06,780 ~-~-> 00:22:10,920
1887 having a large are multiple. Okay or
1888
1889 473
1890 00:22:10,920 ~-~-> 00:22:13,620
1891 risk reward model is the secret. And
1892
1893 474
1894 00:22:13,620 ~-~-> 00:22:15,660
1895 that's not the secret. The secret is
1896
1897 475
1898 00:22:15,840 ~-~-> 00:22:19,110
1899 velocity doing something over and over
1900
1901 476
1902 00:22:19,110 ~-~-> 00:22:21,660
1903 and over again, that has a unexpected
1904
1905 477
1906 00:22:21,660 ~-~-> 00:22:24,420
1907 result that is high in probability and
1908
1909 478
1910 00:22:24,420 ~-~-> 00:22:27,840
1911 flipping the equity. That's velocity.
1912
1913 479
1914 00:22:29,520 ~-~-> 00:22:33,780
1915 You will in your mid 30s, discover how
1916
1917 480
1918 00:22:34,020 ~-~-> 00:22:37,230
1919 you can take the same account balance.
1920
1921 481
1922 00:22:38,070 ~-~-> 00:22:40,290
1923 And while other traders and other
1924
1925 482
1926 00:22:40,290 ~-~-> 00:22:42,570
1927 methodology may be focusing on trying to
1928
1929 483
1930 00:22:42,570 ~-~-> 00:22:46,770
1931 get 10 to one or more, you can do
1932
1933 484
1934 00:22:46,770 ~-~-> 00:22:50,430
1935 exceptionally well doing one to one two
1936
1937 485
1938 00:22:50,430 ~-~-> 00:22:54,330
1939 to one because you can use the lower
1940
1941 486
1942 00:22:54,330 ~-~-> 00:22:56,940
1943 timeframes that you don't appreciate
1944
1945 487
1946 00:22:56,940 ~-~-> 00:23:00,000
1947 right now. But they are the same market
1948
1949 488
1950 00:23:00,840 ~-~-> 00:23:05,850
1951 with dozens of setups per day, but
1952
1953 489
1954 00:23:05,850 ~-~-> 00:23:07,260
1955 you're not in a position when you first
1956
1957 490
1958 00:23:07,260 ~-~-> 00:23:09,330
1959 start, did start doing those types of
1960
1961 491
1962 00:23:09,330 ~-~-> 00:23:12,450
1963 trades. It's going to be a little bit
1964
1965 492
1966 00:23:12,450 ~-~-> 00:23:14,970
1967 time before you understand that but
1968
1969 493
1970 00:23:15,360 ~-~-> 00:23:18,240
1971 velocity and turning over the equity
1972
1973 494
1974 00:23:18,270 ~-~-> 00:23:21,780
1975 without risking a lot. That beats every
1976
1977 495
1978 00:23:21,780 ~-~-> 00:23:24,150
1979 race, it beats every trading contest. It
1980
1981 496
1982 00:23:24,150 ~-~-> 00:23:28,020
1983 beats every thing, period, because
1984
1985 497
1986 00:23:28,020 ~-~-> 00:23:32,220
1987 you're using the rate of turnover in the
1988
1989 498
1990 00:23:32,220 ~-~-> 00:23:34,680
1991 equity, because you're taking more
1992
1993 499
1994 00:23:34,680 ~-~-> 00:23:37,410
1995 frequency. And you're looking at a
1996
1997 500
1998 00:23:37,410 ~-~-> 00:23:40,200
1999 result that is measurable. It's a
2000
2001 501
2002 00:23:40,200 ~-~-> 00:23:42,750
2003 repeating reoccurring pattern that forms
2004
2005 502
2006 00:23:42,810 ~-~-> 00:23:44,280
2007 every single day multiple times
2008
2009 503
2010 00:23:44,280 ~-~-> 00:23:47,940
2011 intraday. So it's not that you want to
2012
2013 504
2014 00:23:47,940 ~-~-> 00:23:50,280
2015 take a larger risk to make bigger money,
2016
2017 505
2018 00:23:50,310 ~-~-> 00:23:54,030
2019 you want to take surgical strikes, and
2020
2021 506
2022 00:23:54,030 ~-~-> 00:23:57,090
2023 parlay the account up using velocity and
2024
2025 507
2026 00:23:57,090 ~-~-> 00:24:00,570
2027 it's just a higher frequency trade. The
2028
2029 508
2030 00:24:00,570 ~-~-> 00:24:03,660
2031 same reoccurring pattern, want to lower
2032
2033 509
2034 00:24:03,660 ~-~-> 00:24:06,810
2035 timeframe. And while other traders are
2036
2037 510
2038 00:24:06,810 ~-~-> 00:24:09,330
2039 waiting for their 10 to 121 30 to one,
2040
2041 511
2042 00:24:10,740 ~-~-> 00:24:13,530
2043 that money can only make whatever the
2044
2045 512
2046 00:24:13,530 ~-~-> 00:24:15,840
2047 maximum, our multiple is going to be for
2048
2049 513
2050 00:24:15,840 ~-~-> 00:24:18,450
2051 it. But within those long or higher
2052
2053 514
2054 00:24:18,450 ~-~-> 00:24:20,760
2055 timeframe price swings, you're going to
2056
2057 515
2058 00:24:20,760 ~-~-> 00:24:23,490
2059 be in there, moving back and forth, both
2060
2061 516
2062 00:24:23,490 ~-~-> 00:24:25,410
2063 directions, most of the money being
2064
2065 517
2066 00:24:25,920 ~-~-> 00:24:27,030
2067 allocated to the side of the
2068
2069 518
2070 00:24:27,030 ~-~-> 00:24:29,910
2071 marketplace, it's going to move in, and
2072
2073 519
2074 00:24:30,150 ~-~-> 00:24:32,880
2075 still trading counter trend intraday
2076
2077 520
2078 00:24:33,060 ~-~-> 00:24:35,310
2079 with less than the risk that you're
2080
2081 521
2082 00:24:35,310 ~-~-> 00:24:36,840
2083 using when you're trading in sync with
2084
2085 522
2086 00:24:36,840 ~-~-> 00:24:40,440
2087 the market. And you will destroy the 10
2088
2089 523
2090 00:24:40,440 ~-~-> 00:24:43,290
2091 to 121 31 are multiple type trading
2092
2093 524
2094 00:24:43,290 ~-~-> 00:24:46,530
2095 models. It's simple math, but you're
2096
2097 525
2098 00:24:46,530 ~-~-> 00:24:48,150
2099 going to be distracted Michael, by all
2100
2101 526
2102 00:24:48,150 ~-~-> 00:24:50,220
2103 these books and all these things.
2104
2105 527
2106 00:24:50,700 ~-~-> 00:24:52,680
2107 They're going to draw your attention
2108
2109 528
2110 00:24:52,680 ~-~-> 00:24:55,290
2111 away from the simplest of things. Is it
2112
2113 529
2114 00:24:55,290 ~-~-> 00:24:56,910
2115 going on at all? Is it going to go down?
2116
2117 530
2118 00:24:57,300 ~-~-> 00:24:59,100
2119 How far is going to go up? How far is it
2120
2121 531
2122 00:24:59,100 ~-~-> 00:25:01,320
2123 going to go down? At what point is it
2124
2125 532
2126 00:25:01,410 ~-~-> 00:25:02,850
2127 incorrect and I want to be out of the
2128
2129 533
2130 00:25:02,850 ~-~-> 00:25:07,110
2131 trade. Now, that same criteria just
2132
2133 534
2134 00:25:07,110 ~-~-> 00:25:08,640
2135 applied to a one minute or five minute
2136
2137 535
2138 00:25:08,640 ~-~-> 00:25:12,120
2139 chart, you can take that same equity and
2140
2141 536
2142 00:25:12,120 ~-~-> 00:25:14,640
2143 flip it over and over and over and over
2144
2145 537
2146 00:25:14,640 ~-~-> 00:25:19,230
2147 again. within the span of, say a weekly
2148
2149 538
2150 00:25:19,230 ~-~-> 00:25:21,390
2151 range, it takes five candles to form.
2152
2153 539
2154 00:25:22,710 ~-~-> 00:25:26,370
2155 You may have 30 to 40 trades for the
2156
2157 540
2158 00:25:26,370 ~-~-> 00:25:28,050
2159 course of the week, and they're all one
2160
2161 541
2162 00:25:28,050 ~-~-> 00:25:31,140
2163 minute setups. But if each one of those
2164
2165 542
2166 00:25:31,140 ~-~-> 00:25:37,800
2167 pay out 2% minimum nothing's going to
2168
2169 543
2170 00:25:37,800 ~-~-> 00:25:41,670
2171 keep up with that. Consider the
2172
2173 544
2174 00:25:41,670 ~-~-> 00:25:43,230
2175 negatives of forcing setups.
2176
2177 545
2178 00:25:45,570 ~-~-> 00:25:47,130
2179 Your impatience Michael in the
2180
2181 546
2182 00:25:47,130 ~-~-> 00:25:48,690
2183 beginning, because the first trade you
2184
2185 547
2186 00:25:48,690 ~-~-> 00:25:51,060
2187 put on, you lose 50% of your activity
2188
2189 548
2190 00:25:51,600 ~-~-> 00:25:53,580
2191 and your trading options and you didn't
2192
2193 549
2194 00:25:53,910 ~-~-> 00:25:56,340
2195 fully understand what you're doing. And
2196
2197 550
2198 00:25:56,940 ~-~-> 00:25:59,700
2199 option trading is not just simply being
2200
2201 551
2202 00:25:59,700 ~-~-> 00:26:01,200
2203 right On the marketplace, you have to
2204
2205 552
2206 00:26:01,200 ~-~-> 00:26:04,140
2207 beat the time decay as well. You'll
2208
2209 553
2210 00:26:04,140 ~-~-> 00:26:05,820
2211 learn about that later on with some
2212
2213 554
2214 00:26:05,820 ~-~-> 00:26:08,310
2215 pain. But consider the negatives of
2216
2217 555
2218 00:26:08,310 ~-~-> 00:26:10,350
2219 forcing the setups because you're going
2220
2221 556
2222 00:26:10,350 ~-~-> 00:26:12,360
2223 to try to force it, you're going to have
2224
2225 557
2226 00:26:12,360 ~-~-> 00:26:13,860
2227 a level that you want to be buying it,
2228
2229 558
2230 00:26:13,890 ~-~-> 00:26:16,560
2231 but you are impatient. And you're going
2232
2233 559
2234 00:26:16,560 ~-~-> 00:26:20,340
2235 to try to buy it ahead of time. And that
2236
2237 560
2238 00:26:20,370 ~-~-> 00:26:25,020
2239 is a problem. Because you aren't very
2240
2241 561
2242 00:26:25,140 ~-~-> 00:26:27,690
2243 versed in proper stock placement. In the
2244
2245 562
2246 00:26:27,690 ~-~-> 00:26:30,780
2247 beginning, Michael, you're going to have
2248
2249 563
2250 00:26:30,780 ~-~-> 00:26:32,760
2251 your stock too tight because you don't
2252
2253 564
2254 00:26:32,760 ~-~-> 00:26:35,160
2255 want to risk a lot of money. But you are
2256
2257 565
2258 00:26:35,160 ~-~-> 00:26:38,280
2259 risking 5% on the trade, and that's too
2260
2261 566
2262 00:26:38,280 ~-~-> 00:26:41,010
2263 much. You're risking way too much. But
2264
2265 567
2266 00:26:41,010 ~-~-> 00:26:43,290
2267 you're forcing the entry sooner than it
2268
2269 568
2270 00:26:43,290 ~-~-> 00:26:46,890
2271 should be taken. And it is done at a
2272
2273 569
2274 00:26:46,890 ~-~-> 00:26:48,930
2275 time where you're using the maximum
2276
2277 570
2278 00:26:48,930 ~-~-> 00:26:51,510
2279 amount of leverage which strangles the
2280
2281 571
2282 00:26:51,510 ~-~-> 00:26:52,710
2283 trade because you have to have a very
2284
2285 572
2286 00:26:52,710 ~-~-> 00:26:56,220
2287 short, tight stop in a trade that you
2288
2289 573
2290 00:26:56,250 ~-~-> 00:26:58,980
2291 entered too soon. Before the level you
2292
2293 574
2294 00:26:58,980 ~-~-> 00:27:02,010
2295 want to buy in So, when you're doing
2296
2297 575
2298 00:27:02,010 ~-~-> 00:27:05,730
2299 that, you're convincing yourself that
2300
2301 576
2302 00:27:05,730 ~-~-> 00:27:08,430
2303 you're going to be right. And ignoring
2304
2305 577
2306 00:27:08,970 ~-~-> 00:27:10,860
2307 all of the things that you're doing
2308
2309 578
2310 00:27:10,860 ~-~-> 00:27:15,240
2311 wrong that is inviting failure. You have
2312
2313 579
2314 00:27:15,240 ~-~-> 00:27:17,730
2315 to consider the negatives of it. What is
2316
2317 580
2318 00:27:17,760 ~-~-> 00:27:19,530
2319 the impact of that? Number one, you're
2320
2321 581
2322 00:27:19,590 ~-~-> 00:27:22,320
2323 teaching yourself that not following the
2324
2325 582
2326 00:27:22,320 ~-~-> 00:27:26,940
2327 rules is okay. That trading ahead of the
2328
2329 583
2330 00:27:26,940 ~-~-> 00:27:30,810
2331 level before it's made a touch or a
2332
2333 584
2334 00:27:30,810 ~-~-> 00:27:34,140
2335 retest to it. That that's normal. That's
2336
2337 585
2338 00:27:34,140 ~-~-> 00:27:35,430
2339 something you should be doing when it
2340
2341 586
2342 00:27:35,430 ~-~-> 00:27:37,650
2343 doesn't fit within the model. If you've
2344
2345 587
2346 00:27:37,830 ~-~-> 00:27:39,900
2347 identified a level and you want to buy
2348
2349 588
2350 00:27:39,900 ~-~-> 00:27:41,490
2351 at that level, why are you buying before
2352
2353 589
2354 00:27:41,490 ~-~-> 00:27:44,790
2355 the levels hit? Because you're forcing
2356
2357 590
2358 00:27:44,790 ~-~-> 00:27:46,710
2359 the trade. you're impatient. You want to
2360
2361 591
2362 00:27:46,710 ~-~-> 00:27:47,970
2363 get in because you're afraid that you're
2364
2365 592
2366 00:27:47,970 ~-~-> 00:27:49,800
2367 going to miss the move. It might not hit
2368
2369 593
2370 00:27:49,800 ~-~-> 00:27:52,200
2371 your level. Well, guess what? So what?
2372
2373 594
2374 00:27:53,220 ~-~-> 00:27:56,160
2375 There's going to be 10s of thousands of
2376
2377 595
2378 00:27:56,160 ~-~-> 00:28:00,450
2379 trades in your career, and your Not
2380
2381 596
2382 00:28:00,480 ~-~-> 00:28:06,090
2383 going to miss the big moneymaker.
2384
2385 597
2386 00:28:06,690 ~-~-> 00:28:10,170
2387 Because of not getting in early. Getting
2388
2389 598
2390 00:28:10,170 ~-~-> 00:28:12,720
2391 in early is always always I can tell you
2392
2393 599
2394 00:28:12,720 ~-~-> 00:28:15,570
2395 now looking back has always been an
2396
2397 600
2398 00:28:15,570 ~-~-> 00:28:19,350
2399 error. Always. It never works out in our
2400
2401 601
2402 00:28:19,350 ~-~-> 00:28:24,600
2403 favor. So don't do it. Taking partials
2404
2405 602
2406 00:28:24,600 ~-~-> 00:28:26,940
2407 is the best thing you will ever do. And
2408
2409 603
2410 00:28:26,940 ~-~-> 00:28:30,420
2411 I'll say it again. Taking partials is
2412
2413 604
2414 00:28:30,420 ~-~-> 00:28:33,570
2415 the best thing that you're ever going to
2416
2417 605
2418 00:28:33,570 ~-~-> 00:28:37,860
2419 do, Michael, the biggest hurdle in your
2420
2421 606
2422 00:28:37,980 ~-~-> 00:28:42,090
2423 development is being comfortable with
2424
2425 607
2426 00:28:42,090 ~-~-> 00:28:45,060
2427 holding the trade. You're going to
2428
2429 608
2430 00:28:45,060 ~-~-> 00:28:47,070
2431 struggle with that. It's going to cause
2432
2433 609
2434 00:28:47,070 ~-~-> 00:28:48,870
2435 anxiety. You're going to have heart
2436
2437 610
2438 00:28:48,870 ~-~-> 00:28:50,310
2439 palpitations, you're going to have
2440
2441 611
2442 00:28:50,490 ~-~-> 00:28:51,750
2443 shortness of breath, you're going to
2444
2445 612
2446 00:28:51,780 ~-~-> 00:28:52,860
2447 feel like you're going to faint a couple
2448
2449 613
2450 00:28:52,860 ~-~-> 00:28:54,300
2451 times you're going to vomit a couple
2452
2453 614
2454 00:28:54,300 ~-~-> 00:28:56,310
2455 times, because some of the trades that
2456
2457 615
2458 00:28:56,310 ~-~-> 00:28:59,700
2459 you're in in the s&p are huge and this
2460
2461 616
2462 00:28:59,700 ~-~-> 00:29:03,630
2463 discussion little tick is making you go
2464
2465 617
2466 00:29:03,630 ~-~-> 00:29:06,780
2467 nuts. wait around for it, it happens.
2468
2469 618
2470 00:29:08,640 ~-~-> 00:29:12,330
2471 But taking partials off, while the trade
2472
2473 619
2474 00:29:12,330 ~-~-> 00:29:16,860
2475 is developing, number one, it feels good
2476
2477 620
2478 00:29:16,890 ~-~-> 00:29:19,590
2479 to take something off. It feels good.
2480
2481 621
2482 00:29:20,190 ~-~-> 00:29:21,750
2483 And it feels like you're doing something
2484
2485 622
2486 00:29:21,750 ~-~-> 00:29:23,100
2487 because even when you're in a trade
2488
2489 623
2490 00:29:23,100 ~-~-> 00:29:24,960
2491 that's winning, you're going to find
2492
2493 624
2494 00:29:24,960 ~-~-> 00:29:29,010
2495 that it is like holding on to a
2496
2497 625
2498 00:29:29,010 ~-~-> 00:29:31,050
2499 motorcycle at 200 plus miles an hour.
2500
2501 626
2502 00:29:32,130 ~-~-> 00:29:35,610
2503 It's it's a incredible rush. But you'll
2504
2505 627
2506 00:29:35,610 ~-~-> 00:29:38,370
2507 also want to ride the end sometimes
2508
2509 628
2510 00:29:38,400 ~-~-> 00:29:40,680
2511 quickly. And when you get in a trade,
2512
2513 629
2514 00:29:41,040 ~-~-> 00:29:43,470
2515 and it's moving in your favor, you want
2516
2517 630
2518 00:29:43,470 ~-~-> 00:29:45,030
2519 to get there quick, you want to get
2520
2521 631
2522 00:29:45,030 ~-~-> 00:29:46,470
2523 there and get you out of the trade and
2524
2525 632
2526 00:29:46,470 ~-~-> 00:29:47,730
2527 profit because you don't like the
2528
2529 633
2530 00:29:47,730 ~-~-> 00:29:49,470
2531 discomfort of not knowing if it's gonna
2532
2533 634
2534 00:29:49,470 ~-~-> 00:29:52,590
2535 hit your target. So the way you're going
2536
2537 635
2538 00:29:52,590 ~-~-> 00:29:55,650
2539 to best deal with that and have the
2540
2541 636
2542 00:29:55,650 ~-~-> 00:29:57,960
2543 ability to hold on to the trade longer
2544
2545 637
2546 00:29:57,960 ~-~-> 00:30:00,300
2547 into fruition or to get stopped out. Cuz
2548
2549 638
2550 00:30:00,300 ~-~-> 00:30:04,560
2551 that's part of the plan too. You have to
2552
2553 639
2554 00:30:04,560 ~-~-> 00:30:06,630
2555 take something off. So if the trade
2556
2557 640
2558 00:30:06,630 ~-~-> 00:30:08,730
2559 moves 10 points in your favor, take 10
2560
2561 641
2562 00:30:08,730 ~-~-> 00:30:11,820
2563 points off with something. Even if it's
2564
2565 642
2566 00:30:11,820 ~-~-> 00:30:14,220
2567 one contract or one lot, take something
2568
2569 643
2570 00:30:14,220 ~-~-> 00:30:16,830
2571 off. It feels good. It's that cookie
2572
2573 644
2574 00:30:16,830 ~-~-> 00:30:19,620
2575 that reward. When it moves a little bit
2576
2577 645
2578 00:30:19,620 ~-~-> 00:30:22,980
2579 more, take something off again. And
2580
2581 646
2582 00:30:22,980 ~-~-> 00:30:25,350
2583 you're going to find by doing that, it
2584
2585 647
2586 00:30:25,350 ~-~-> 00:30:28,710
2587 helps alleviate the pain and uncertainty
2588
2589 648
2590 00:30:28,710 ~-~-> 00:30:30,480
2591 of holding on to that trade until it
2592
2593 649
2594 00:30:30,480 ~-~-> 00:30:34,920
2595 gets to your profit objective. Taking
2596
2597 650
2598 00:30:34,920 ~-~-> 00:30:37,170
2599 partials reduces risk while paying.
2600
2601 651
2602 00:30:39,750 ~-~-> 00:30:41,100
2603 You're going to worry in the beginning
2604
2605 652
2606 00:30:41,130 ~-~-> 00:30:42,660
2607 about getting stopped out all the time.
2608
2609 653
2610 00:30:43,080 ~-~-> 00:30:44,250
2611 And you're going to do a lot of
2612
2613 654
2614 00:30:44,250 ~-~-> 00:30:46,140
2615 acrobatics. With your your stop loss,
2616
2617 655
2618 00:30:46,140 ~-~-> 00:30:47,160
2619 you're going to move it back when you
2620
2621 656
2622 00:30:47,160 ~-~-> 00:30:48,930
2623 think it's dropping against you. or
2624
2625 657
2626 00:30:48,930 ~-~-> 00:30:50,700
2627 raise it up when it's rising back up
2628
2629 658
2630 00:30:50,700 ~-~-> 00:30:52,770
2631 towards your stop. And you're going to
2632
2633 659
2634 00:30:52,770 ~-~-> 00:30:54,780
2635 drive yourself crazy doing that you have
2636
2637 660
2638 00:30:54,780 ~-~-> 00:30:56,190
2639 to commit to whatever your stop is going
2640
2641 661
2642 00:30:56,190 ~-~-> 00:30:57,810
2643 to be based on sound money management
2644
2645 662
2646 00:30:57,810 ~-~-> 00:31:01,080
2647 and risk and Once the trade starts
2648
2649 663
2650 00:31:01,080 ~-~-> 00:31:03,150
2651 moving in your favor, take partials off.
2652
2653 664
2654 00:31:03,390 ~-~-> 00:31:05,550
2655 By doing that, not only does it fund you
2656
2657 665
2658 00:31:05,550 ~-~-> 00:31:09,060
2659 as the trader, but it also reduces the
2660
2661 666
2662 00:31:09,060 ~-~-> 00:31:10,830
2663 risk. Because every time you take
2664
2665 667
2666 00:31:10,830 ~-~-> 00:31:12,570
2667 something off, you're reducing the
2668
2669 668
2670 00:31:12,570 ~-~-> 00:31:14,490
2671 exposure to your account and your and
2672
2673 669
2674 00:31:14,490 ~-~-> 00:31:17,250
2675 your mental capital will withstand. So
2676
2677 670
2678 00:31:17,250 ~-~-> 00:31:19,860
2679 you have to constantly manage not only
2680
2681 671
2682 00:31:19,860 ~-~-> 00:31:21,480
2683 the trade, but you have to manage the
2684
2685 672
2686 00:31:21,480 ~-~-> 00:31:24,570
2687 trader. And it's expectation, your
2688
2689 673
2690 00:31:24,570 ~-~-> 00:31:27,150
2691 expectation is you put the trade on
2692
2693 674
2694 00:31:27,150 ~-~-> 00:31:29,340
2695 because you want to be profitable. So
2696
2697 675
2698 00:31:29,340 ~-~-> 00:31:32,220
2699 what's the best thing that you can do as
2700
2701 676
2702 00:31:32,220 ~-~-> 00:31:33,810
2703 a trader, when the trades in profit,
2704
2705 677
2706 00:31:34,530 ~-~-> 00:31:37,710
2707 take something off, don't be fearful and
2708
2709 678
2710 00:31:37,710 ~-~-> 00:31:40,230
2711 don't allow greed to say I have to hold
2712
2713 679
2714 00:31:40,230 ~-~-> 00:31:42,060
2715 on for everything. It's all or nothing,
2716
2717 680
2718 00:31:42,270 ~-~-> 00:31:43,260
2719 because I'm going to tell you, Michael,
2720
2721 681
2722 00:31:43,260 ~-~-> 00:31:44,670
2723 when you do that, the first couple
2724
2725 682
2726 00:31:44,670 ~-~-> 00:31:46,140
2727 years, you're going to be in some
2728
2729 683
2730 00:31:46,140 ~-~-> 00:31:48,930
2731 trades. For instance, coffee, you're
2732
2733 684
2734 00:31:48,930 ~-~-> 00:31:50,010
2735 going to be holding on to a coffee
2736
2737 685
2738 00:31:50,010 ~-~-> 00:31:52,800
2739 trade. That's going to move a lot. It's
2740
2741 686
2742 00:31:52,800 ~-~-> 00:31:58,080
2743 going to move a lot and $35,000 turns
2744
2745 687
2746 00:31:58,080 ~-~-> 00:32:01,500
2747 into an $8,000 loss. Because you wanted
2748
2749 688
2750 00:32:01,500 ~-~-> 00:32:05,790
2751 to get your full target. You have to
2752
2753 689
2754 00:32:05,790 ~-~-> 00:32:08,520
2755 listen. You have to listen to this. If
2756
2757 690
2758 00:32:08,520 ~-~-> 00:32:10,020
2759 you don't do these things, Michael,
2760
2761 691
2762 00:32:10,020 ~-~-> 00:32:12,480
2763 you're going to regret it. Taking
2764
2765 692
2766 00:32:12,480 ~-~-> 00:32:13,890
2767 partials is the best thing you're ever
2768
2769 693
2770 00:32:13,890 ~-~-> 00:32:16,950
2771 going to do. And taking partials reduces
2772
2773 694
2774 00:32:16,950 ~-~-> 00:32:21,510
2775 risk while paying you. Ignore
2776
2777 695
2778 00:32:21,510 ~-~-> 00:32:25,560
2779 unprofitable traders advice on risk. If
2780
2781 696
2782 00:32:25,560 ~-~-> 00:32:29,220
2783 someone that you read if someone that
2784
2785 697
2786 00:32:29,220 ~-~-> 00:32:32,610
2787 you listen to says anything against
2788
2789 698
2790 00:32:32,610 ~-~-> 00:32:35,970
2791 what's being said to you right here, I
2792
2793 699
2794 00:32:35,970 ~-~-> 00:32:37,530
2795 would put a million dollars on them not
2796
2797 700
2798 00:32:37,530 ~-~-> 00:32:41,100
2799 being a profitable trader. Chances are
2800
2801 701
2802 00:32:41,130 ~-~-> 00:32:42,720
2803 they have no idea what it is to be
2804
2805 702
2806 00:32:42,720 ~-~-> 00:32:44,610
2807 consistent. They probably had hit and
2808
2809 703
2810 00:32:44,610 ~-~-> 00:32:49,860
2811 miss type results, but consistent. Long
2812
2813 704
2814 00:32:49,860 ~-~-> 00:32:52,980
2815 term trading results come by way of
2816
2817 705
2818 00:32:53,310 ~-~-> 00:32:56,160
2819 funding the positions and funding the
2820
2821 706
2822 00:32:56,160 ~-~-> 00:32:59,040
2823 trader or as we say it today, pay the
2824
2825 707
2826 00:32:59,040 ~-~-> 00:33:02,340
2827 trader If you don't do those things,
2828
2829 708
2830 00:33:02,370 ~-~-> 00:33:04,110
2831 there's nothing guaranteed like that
2832
2833 709
2834 00:33:04,110 ~-~-> 00:33:05,490
2835 your trades gonna hit your target.
2836
2837 710
2838 00:33:06,390 ~-~-> 00:33:08,520
2839 There's absolutely nothing guaranteeing
2840
2841 711
2842 00:33:08,520 ~-~-> 00:33:11,580
2843 that and the volatility in today's
2844
2845 712
2846 00:33:11,580 ~-~-> 00:33:14,820
2847 world, which, at the time of this
2848
2849 713
2850 00:33:14,820 ~-~-> 00:33:16,950
2851 recording, we've seen some pretty
2852
2853 714
2854 00:33:17,070 ~-~-> 00:33:22,350
2855 dramatic volatility and your trades
2856
2857 715
2858 00:33:22,410 ~-~-> 00:33:24,780
2859 every time you put them on, there's no
2860
2861 716
2862 00:33:24,780 ~-~-> 00:33:26,550
2863 guarantee that you're going to hit your
2864
2865 717
2866 00:33:26,550 ~-~-> 00:33:29,400
2867 objective. So you have to get to the
2868
2869 718
2870 00:33:29,400 ~-~-> 00:33:31,740
2871 point where you trust yourself and you
2872
2873 719
2874 00:33:31,740 ~-~-> 00:33:33,450
2875 don't rely on other people's advice
2876
2877 720
2878 00:33:33,480 ~-~-> 00:33:35,880
2879 about risk because their advice about
2880
2881 721
2882 00:33:35,880 ~-~-> 00:33:39,870
2883 your risk is free to them. There's no
2884
2885 722
2886 00:33:39,870 ~-~-> 00:33:41,970
2887 exposure, and the advice they're giving
2888
2889 723
2890 00:33:41,970 ~-~-> 00:33:45,450
2891 you probably isn't sound. So stick to
2892
2893 724
2894 00:33:45,450 ~-~-> 00:33:48,480
2895 what I'm telling you here. commit to it,
2896
2897 725
2898 00:33:48,780 ~-~-> 00:33:52,080
2899 and own it. Your losses are your losses,
2900
2901 726
2902 00:33:52,350 ~-~-> 00:33:54,660
2903 your wins are your wins. No one else can
2904
2905 727
2906 00:33:54,660 ~-~-> 00:33:56,340
2907 take credit for it, and you shouldn't
2908
2909 728
2910 00:33:56,340 ~-~-> 00:33:57,120
2911 try to share credit
2912
2913 729
2914 00:34:05,700 ~-~-> 00:34:08,310
2915 Whether a series of consecutive losses,
2916
2917 730
2918 00:34:11,100 ~-~-> 00:34:13,470
2919 taking losses is normal Michael, it
2920
2921 731
2922 00:34:13,470 ~-~-> 00:34:16,620
2923 doesn't feel good. It sucks. But
2924
2925 732
2926 00:34:16,860 ~-~-> 00:34:19,530
2927 unfortunately, there's simply no way
2928
2929 733
2930 00:34:19,530 ~-~-> 00:34:21,870
2931 around it. Every trader loses money.
2932
2933 734
2934 00:34:22,380 ~-~-> 00:34:23,970
2935 Every trader suffers drawdown.
2936
2937 735
2938 00:34:24,480 ~-~-> 00:34:27,930
2939 professional traders manage how much and
2940
2941 736
2942 00:34:28,350 ~-~-> 00:34:30,150
2943 they understand they don't know how long
2944
2945 737
2946 00:34:30,150 ~-~-> 00:34:31,710
2947 it's going to take before it turns to
2948
2949 738
2950 00:34:31,920 ~-~-> 00:34:33,600
2951 equity around in other words, the
2952
2953 739
2954 00:34:33,600 ~-~-> 00:34:40,650
2955 recovery you will lose fortunes. Expect
2956
2957 740
2958 00:34:40,650 ~-~-> 00:34:44,010
2959 the pain. The faster you can accept this
2960
2961 741
2962 00:34:44,010 ~-~-> 00:34:45,720
2963 Michael and warm up to the idea that
2964
2965 742
2966 00:34:45,720 ~-~-> 00:34:49,200
2967 imperfection is normal. It's absolutely
2968
2969 743
2970 00:34:49,290 ~-~-> 00:34:51,600
2971 normal. And there's going to be booked
2972
2973 744
2974 00:34:51,600 ~-~-> 00:34:53,220
2975 as you're going to buy. It's going to
2976
2977 745
2978 00:34:53,220 ~-~-> 00:34:55,230
2979 sound like it's the best book in the
2980
2981 746
2982 00:34:55,230 ~-~-> 00:34:57,240
2983 world. You're going to buy courses and
2984
2985 747
2986 00:34:57,240 ~-~-> 00:34:58,260
2987 it's going to sound like you're going to
2988
2989 748
2990 00:34:58,260 ~-~-> 00:35:01,500
2991 get riches on told, this isn't a
2992
2993 749
2994 00:35:01,500 ~-~-> 00:35:04,500
2995 volunteer account, all of that stuff is
2996
2997 750
2998 00:35:04,500 ~-~-> 00:35:07,440
2999 nonsense. You're going to lose money,
3000
3001 751
3002 00:35:07,770 ~-~-> 00:35:09,420
3003 and you're going to have losing streaks.
3004
3005 752
3006 00:35:09,840 ~-~-> 00:35:12,480
3007 And the amount of money if we could
3008
3009 753
3010 00:35:12,510 ~-~-> 00:35:14,700
3011 total all up and look back, it's
3012
3013 754
3014 00:35:14,700 ~-~-> 00:35:18,690
3015 enormous. But it didn't kill you. It
3016
3017 755
3018 00:35:18,690 ~-~-> 00:35:20,940
3019 didn't take you out of the game. It did
3020
3021 756
3022 00:35:20,940 ~-~-> 00:35:23,580
3023 not defeat you. It beat you up a couple
3024
3025 757
3026 00:35:23,580 ~-~-> 00:35:26,070
3027 times pretty bad and your ego is bruised
3028
3029 758
3030 00:35:26,070 ~-~-> 00:35:30,180
3031 for well. Truth be told, I still feel a
3032
3033 759
3034 00:35:30,180 ~-~-> 00:35:33,120
3035 little pain from it. But you're going to
3036
3037 760
3038 00:35:33,120 ~-~-> 00:35:35,940
3039 have to accept the fact that losing
3040
3041 761
3042 00:35:35,940 ~-~-> 00:35:39,390
3043 streaks do occur. Now, it's been a long
3044
3045 762
3046 00:35:39,390 ~-~-> 00:35:42,720
3047 time since I had 10 losses in a row. But
3048
3049 763
3050 00:35:42,720 ~-~-> 00:35:44,850
3051 you're going to have those and there's
3052
3053 764
3054 00:35:44,850 ~-~-> 00:35:46,470
3055 nothing wrong with it because it helps
3056
3057 765
3058 00:35:46,470 ~-~-> 00:35:50,220
3059 you number one respect risk. Because no
3060
3061 766
3062 00:35:50,220 ~-~-> 00:35:53,790
3063 one is exempt from being wrong. I still
3064
3065 767
3066 00:35:53,790 ~-~-> 00:35:55,950
3067 get it wrong. And you're going to get it
3068
3069 768
3070 00:35:55,950 ~-~-> 00:35:58,200
3071 wrong a lot in the beginning. Prepare
3072
3073 769
3074 00:35:58,200 ~-~-> 00:36:02,340
3075 for that. Multiple losses does not prove
3076
3077 770
3078 00:36:02,550 ~-~-> 00:36:06,060
3079 it is broken. Your trading method is not
3080
3081 771
3082 00:36:06,090 ~-~-> 00:36:09,660
3083 decided in terms of effectiveness. If
3084
3085 772
3086 00:36:09,780 ~-~-> 00:36:11,520
3087 you have a series of losing trades, a
3088
3089 773
3090 00:36:11,520 ~-~-> 00:36:12,990
3091 series of losing trades is something
3092
3093 774
3094 00:36:12,990 ~-~-> 00:36:15,270
3095 that every trading methodology will
3096
3097 775
3098 00:36:15,360 ~-~-> 00:36:18,150
3099 eventually will eventually plague every
3100
3101 776
3102 00:36:18,180 ~-~-> 00:36:21,030
3103 methodology. There's there is not one
3104
3105 777
3106 00:36:21,030 ~-~-> 00:36:23,880
3107 single trader that has not endured this.
3108
3109 778
3110 00:36:24,090 ~-~-> 00:36:26,100
3111 It's a normal thing. But when you
3112
3113 779
3114 00:36:26,280 ~-~-> 00:36:28,560
3115 experience it, and you have to endure
3116
3117 780
3118 00:36:28,560 ~-~-> 00:36:30,390
3119 it, it feels like it's only you right,
3120
3121 781
3122 00:36:30,390 ~-~-> 00:36:33,810
3123 Michael, but it's not just you. Truth
3124
3125 782
3126 00:36:33,810 ~-~-> 00:36:36,480
3127 is, everyone has it. But the problem is,
3128
3129 783
3130 00:36:37,020 ~-~-> 00:36:39,000
3131 the people online and the people you
3132
3133 784
3134 00:36:39,000 ~-~-> 00:36:40,440
3135 read about in their books aren't not
3136
3137 785
3138 00:36:40,440 ~-~-> 00:36:42,240
3139 really honest with you. They're going to
3140
3141 786
3142 00:36:42,240 ~-~-> 00:36:44,670
3143 tell you nothing about their losses.
3144
3145 787
3146 00:36:44,670 ~-~-> 00:36:45,990
3147 They're not going to say anything about
3148
3149 788
3150 00:36:45,990 ~-~-> 00:36:47,310
3151 losing money. They're only going to
3152
3153 789
3154 00:36:47,310 ~-~-> 00:36:49,650
3155 focus on the sweet sugary coated
3156
3157 790
3158 00:36:49,770 ~-~-> 00:36:51,750
3159 chapters of their books that says this
3160
3161 791
3162 00:36:51,750 ~-~-> 00:36:53,670
3163 is what I got rich with, and you can
3164
3165 792
3166 00:36:53,670 ~-~-> 00:36:58,770
3167 too. Stick to the method and risk
3168
3169 793
3170 00:36:58,800 ~-~-> 00:37:02,130
3171 reduction. When you have your first
3172
3173 794
3174 00:37:02,130 ~-~-> 00:37:03,360
3175 string of losses, Michael, you're going
3176
3177 795
3178 00:37:03,360 ~-~-> 00:37:05,190
3179 to want to skip around and try something
3180
3181 796
3182 00:37:05,190 ~-~-> 00:37:06,360
3183 new. And that's the reason why you
3184
3185 797
3186 00:37:06,360 ~-~-> 00:37:08,340
3187 bought all those books because you were
3188
3189 798
3190 00:37:08,340 ~-~-> 00:37:11,190
3191 looking for the Holy Grail. And the
3192
3193 799
3194 00:37:11,190 ~-~-> 00:37:13,200
3195 problem with that is every time you went
3196
3197 800
3198 00:37:13,200 ~-~-> 00:37:15,420
3199 to a new system, it starts off with
3200
3201 801
3202 00:37:16,050 ~-~-> 00:37:18,630
3203 modest wins, and you fall in love it,
3204
3205 802
3206 00:37:18,630 ~-~-> 00:37:20,280
3207 you think you figured it out, and then
3208
3209 803
3210 00:37:20,280 ~-~-> 00:37:22,470
3211 it goes into a tailspin. And you do
3212
3213 804
3214 00:37:22,470 ~-~-> 00:37:24,330
3215 things the same way that I've outlined
3216
3217 805
3218 00:37:24,360 ~-~-> 00:37:26,550
3219 in our discussion here. And you lose
3220
3221 806
3222 00:37:26,550 ~-~-> 00:37:28,320
3223 track of what you're doing, and lose
3224
3225 807
3226 00:37:28,320 ~-~-> 00:37:30,750
3227 control of yourself. And you enter into
3228
3229 808
3230 00:37:30,750 ~-~-> 00:37:35,880
3231 a series of losing trades. Your first
3232
3233 809
3234 00:37:36,000 ~-~-> 00:37:39,030
3235 impulse is to abandon that method and go
3236
3237 810
3238 00:37:39,030 ~-~-> 00:37:40,920
3239 to something else. And the problem with
3240
3241 811
3242 00:37:40,920 ~-~-> 00:37:43,590
3243 that is is you do this dozens of times.
3244
3245 812
3246 00:37:44,490 ~-~-> 00:37:45,960
3247 Now, if I could grab you by the lapels
3248
3249 813
3250 00:37:45,960 ~-~-> 00:37:48,210
3251 and shake you again, it's simply this
3252
3253 814
3254 00:37:48,450 ~-~-> 00:37:52,470
3255 stop bouncing around. Focus with one
3256
3257 815
3258 00:37:52,500 ~-~-> 00:37:54,330
3259 thing in mind. Work with a higher
3260
3261 816
3262 00:37:54,330 ~-~-> 00:37:56,340
3263 timeframe bias work off of one key
3264
3265 817
3266 00:37:56,340 ~-~-> 00:37:59,100
3267 level, work off with one market and stay
3268
3269 818
3270 00:37:59,100 ~-~-> 00:38:01,110
3271 on one side of the market. until proven,
3272
3273 819
3274 00:38:01,170 ~-~-> 00:38:02,640
3275 obviously that you're on the wrong side.
3276
3277 820
3278 00:38:03,450 ~-~-> 00:38:06,030
3279 If you manage your risk, don't force the
3280
3281 821
3282 00:38:06,030 ~-~-> 00:38:10,350
3283 trades and your patient, that alone can
3284
3285 822
3286 00:38:10,350 ~-~-> 00:38:12,930
3287 be profitable. But you have to stick
3288
3289 823
3290 00:38:12,930 ~-~-> 00:38:15,900
3291 with the method. And if you don't reduce
3292
3293 824
3294 00:38:15,900 ~-~-> 00:38:19,200
3295 the risk when you take losses, you won't
3296
3297 825
3298 00:38:19,650 ~-~-> 00:38:21,180
3299 have the ability to stay with the
3300
3301 826
3302 00:38:21,180 ~-~-> 00:38:24,660
3303 method. The method eventually it takes
3304
3305 827
3306 00:38:24,660 ~-~-> 00:38:26,100
3307 six years for you to figure it out. By
3308
3309 828
3310 00:38:26,100 ~-~-> 00:38:29,670
3311 the way, six years, you figure out
3312
3313 829
3314 00:38:29,670 ~-~-> 00:38:33,090
3315 exactly who you are as a trader. And it
3316
3317 830
3318 00:38:33,120 ~-~-> 00:38:35,100
3319 feels like a lifetime. It feels like
3320
3321 831
3322 00:38:35,100 ~-~-> 00:38:36,420
3323 you're never going to get it Michael, I
3324
3325 832
3326 00:38:36,420 ~-~-> 00:38:39,060
3327 know I know how it feels. And I wish I
3328
3329 833
3330 00:38:39,060 ~-~-> 00:38:40,500
3331 could go back and just tell you to your
3332
3333 834
3334 00:38:40,500 ~-~-> 00:38:40,950
3335 face.
3336
3337 835
3338 00:38:42,300 ~-~-> 00:38:46,740
3339 Suck it up. Just take it because
3340
3341 836
3342 00:38:47,010 ~-~-> 00:38:49,650
3343 everything changes in your sixth year.
3344
3345 837
3346 00:38:50,430 ~-~-> 00:38:53,820
3347 Everything changes. It becomes easier.
3348
3349 838
3350 00:38:54,210 ~-~-> 00:38:57,120
3351 It becomes far less stressful to put the
3352
3353 839
3354 00:38:57,120 ~-~-> 00:38:58,470
3355 trade on you know exactly what you're
3356
3357 840
3358 00:38:58,470 ~-~-> 00:38:59,730
3359 looking for. You know where your stop
3360
3361 841
3362 00:38:59,730 ~-~-> 00:39:01,050
3363 should be. If you hadn't managed to
3364
3365 842
3366 00:39:01,050 ~-~-> 00:39:03,000
3367 stop, you're not over leveraging your
3368
3369 843
3370 00:39:03,000 ~-~-> 00:39:06,420
3371 account. You're not forcing trades. You
3372
3373 844
3374 00:39:06,420 ~-~-> 00:39:08,580
3375 grow into yourself and the sixth year.
3376
3377 845
3378 00:39:09,720 ~-~-> 00:39:12,000
3379 But prior that sixth year, you're like a
3380
3381 846
3382 00:39:12,000 ~-~-> 00:39:16,380
3383 wild cowboy. And you just gunslinger and
3384
3385 847
3386 00:39:16,380 ~-~-> 00:39:18,840
3387 you're not fearful of anything. You take
3388
3389 848
3390 00:39:18,840 ~-~-> 00:39:20,460
3391 on wrist, it's much larger than you
3392
3393 849
3394 00:39:20,460 ~-~-> 00:39:21,930
3395 should you trade more times than you
3396
3397 850
3398 00:39:21,930 ~-~-> 00:39:23,640
3399 should. And when you have severe
3400
3401 851
3402 00:39:23,640 ~-~-> 00:39:26,190
3403 drawdown, it doesn't bother you. And
3404
3405 852
3406 00:39:26,190 ~-~-> 00:39:29,490
3407 that's a problem. You weren't afraid to
3408
3409 853
3410 00:39:29,490 ~-~-> 00:39:33,060
3411 do anything. And you weren't afraid to
3412
3413 854
3414 00:39:33,060 ~-~-> 00:39:34,950
3415 get into the marketplace with huge
3416
3417 855
3418 00:39:34,950 ~-~-> 00:39:38,190
3419 leverage, where one trade could wipe out
3420
3421 856
3422 00:39:38,190 ~-~-> 00:39:42,090
3423 the account. That's nonsense. And you
3424
3425 857
3426 00:39:42,090 ~-~-> 00:39:45,060
3427 don't need to do that to do well. But
3428
3429 858
3430 00:39:45,060 ~-~-> 00:39:46,770
3431 you have to stick to a method that's
3432
3433 859
3434 00:39:47,010 ~-~-> 00:39:50,490
3435 very consistent. That will have losses
3436
3437 860
3438 00:39:50,880 ~-~-> 00:39:55,590
3439 and you manage your risk. You will be
3440
3441 861
3442 00:39:55,590 ~-~-> 00:39:57,660
3443 correct more than you're incorrect. It
3444
3445 862
3446 00:39:57,660 ~-~-> 00:39:59,490
3447 doesn't feel like it now Michael, but
3448
3449 863
3450 00:39:59,490 ~-~-> 00:40:01,530
3451 you will be And the only way that
3452
3453 864
3454 00:40:01,530 ~-~-> 00:40:03,510
3455 happens is sticking to the method.
3456
3457 865
3458 00:40:04,800 ~-~-> 00:40:07,380
3459 sticking to the method, working from the
3460
3461 866
3462 00:40:07,380 ~-~-> 00:40:11,070
3463 macro down to the micro, and being
3464
3465 867
3466 00:40:11,070 ~-~-> 00:40:14,040
3467 willing to admit that you're wrong, and
3468
3469 868
3470 00:40:14,040 ~-~-> 00:40:15,420
3471 either taking the loss and going home
3472
3473 869
3474 00:40:15,420 ~-~-> 00:40:19,080
3475 for the day, or changing direction. And
3476
3477 870
3478 00:40:19,080 ~-~-> 00:40:21,120
3479 in the beginning, it's best if you just
3480
3481 871
3482 00:40:21,120 ~-~-> 00:40:22,380
3483 take my advice right now, Michael, and
3484
3485 872
3486 00:40:22,380 ~-~-> 00:40:24,060
3487 just get out of the marketplace and try
3488
3489 873
3490 00:40:24,060 ~-~-> 00:40:26,550
3491 not to do the reversal. Because we lose
3492
3493 874
3494 00:40:26,550 ~-~-> 00:40:30,900
3495 a lot of money doing that too. Don't
3496
3497 875
3498 00:40:30,900 ~-~-> 00:40:32,280
3499 look for others to measure against.
3500
3501 876
3502 00:40:33,360 ~-~-> 00:40:34,560
3503 You're gonna look at other people, other
3504
3505 877
3506 00:40:34,560 ~-~-> 00:40:37,050
3507 traders, other authors. And you're going
3508
3509 878
3510 00:40:37,050 ~-~-> 00:40:39,600
3511 to try to say that you want to be like
3512
3513 879
3514 00:40:39,600 ~-~-> 00:40:46,500
3515 them, and everyone else should not be a
3516
3517 880
3518 00:40:46,500 ~-~-> 00:40:50,250
3519 measuring stick to you. Because to have
3520
3521 881
3522 00:40:50,250 ~-~-> 00:40:53,640
3523 that stunt your growth, you're saying
3524
3525 882
3526 00:40:53,640 ~-~-> 00:40:56,760
3527 that, that person's accomplishments and
3528
3529 883
3530 00:40:56,790 ~-~-> 00:41:03,510
3531 accolades. You want them Why focus on
3532
3533 884
3534 00:41:03,510 ~-~-> 00:41:04,560
3535 the ones that you're going to do
3536
3537 885
3538 00:41:04,560 ~-~-> 00:41:07,830
3539 yourself? The ones that you are going to
3540
3541 886
3542 00:41:07,830 ~-~-> 00:41:11,400
3543 achieve those successes and those
3544
3545 887
3546 00:41:11,400 ~-~-> 00:41:13,230
3547 failures, because they're stories that
3548
3549 888
3550 00:41:13,260 ~-~-> 00:41:15,690
3551 are going to be significant and
3552
3553 889
3554 00:41:15,690 ~-~-> 00:41:18,030
3555 meaningful to you. And should anyone sit
3556
3557 890
3558 00:41:18,030 ~-~-> 00:41:20,700
3559 down with you that has any interest in
3560
3561 891
3562 00:41:20,700 ~-~-> 00:41:23,940
3563 the marketplace. They're gonna be very
3564
3565 892
3566 00:41:23,940 ~-~-> 00:41:25,290
3567 interested to hear what you have to say.
3568
3569 893
3570 00:41:26,310 ~-~-> 00:41:28,920
3571 You have so many adventures ahead of
3572
3573 894
3574 00:41:28,920 ~-~-> 00:41:32,640
3575 you, Michael. But so much of the pain
3576
3577 895
3578 00:41:33,030 ~-~-> 00:41:38,610
3579 that we endure, was 120% avoidable. So
3580
3581 896
3582 00:41:40,260 ~-~-> 00:41:42,750
3583 hopefully, you've taken my advice here
3584
3585 897
3586 00:41:44,370 ~-~-> 00:41:46,320
3587 and are going to work towards trying to
3588
3589 898
3590 00:41:46,320 ~-~-> 00:41:47,520
3591 eliminate some of the pain that we
3592
3593 899
3594 00:41:47,520 ~-~-> 00:41:50,070
3595 endure. I can tell you as an older man,
3596
3597 900
3598 00:41:50,130 ~-~-> 00:41:51,810
3599 I'd greatly appreciate it if you would.
3600
3601 901
3602 00:41:53,670 ~-~-> 00:41:55,950
3603 And those of you they were listening. I
3604
3605 902
3606 00:41:55,950 ~-~-> 00:41:58,320
3607 hope this was also very beneficial and
3608
3609 903
3610 00:41:58,320 ~-~-> 00:41:59,580
3611 profitable for your learning and
3612
3613 904
3614 00:41:59,580 ~-~-> 00:42:01,800
3615 development. Until next time, I wish you
3616
3617 905
3618 00:42:01,800 ~-~-> 00:42:02,700
3619 good luck and good trading.