The Fed is evil!
The market is stuck!
The market is bearish!
None are true if you know where to look. And that’s what many smart people are missing these days.
Yesterday’s coaching call gave new members eye-opening insights into the process of profitability.
That’s right, it’s a process. Which is good news for those who want to learn a life-long skill that keeps paying you over and over.
Bad news for those who want trading to be “set it and forget it.”
Let’s focus on the good news and how it leads to consistently getting paid.
A process means it’s repeatable. Structure means it’s repeatable. And that means never again feeling confused. When you know what to look for, you’re never lost.
Profitable trading is about two things; timing or time in. Best case scenario, both.
Timing means that you enter new trades as close to the optimal entry as possible. At the moment of greatest reward potential.
Time in sometimes means you build positions slowly so that you have the least amount of shares if wrong, and the most amount of shares when right.
This is especially important if swing trading. When accepting overnight risk, it’s smart to work your way into positions.
But for those who truly master the process of trading, you know when to trade size on your initial entry, your timing is on point, and you hold winning trades for the maximum profit.
So the million dollar question is this: How do you know when to do that? How do you know when to go big?
Going big requires a process for identifying great ideas. But here’s the kicker that everyone misses.
A good idea, an obvious bullish move, does not mean it’s a good trade right now. It could be too far from the optimal entry.
And this is the golden nugget that you need to hear…
Great traders, consistent traders understand that each trade has unique risk, unique profit potential.
But that’s not how most people trade, they never consider if this trade, right now is better than the rest.
Or if this trade is just okay.
And then – adjust their risk, initial position size and profit expectations based on that idea, at that moment.
Sometimes the market is a broad based rally. Sometimes it’s sector or industry group specific, and sometimes it’s stock specific.
So here’s the implications. The market might be “stuck” but there’s plenty of ideas.
If you don’t see them yet, you need to ask why. You need a process.
Don’t believe me?
Well did you catch any of this?
#GE, General Electric a boring old stock producing a raging, persistent bullish move for the last seven months.
If you’re ready to get paid, you need to start asking different questions.
These insights lead to my last point. Something that our community excels at. Accepting the fact that there will be losses. It’s part of trading.
For those of you who keep asking about win/loss ratio, “hit rate” and such, well that’s an inexperienced question.
I’ll take our 50% win rate over your 90% win rate because I’m willing to bet your winners to losers are one to one.
Which means one big losing trade wipes out al of those small gains.
We understand timing, time in, and position sizing. And all we care about is how much our account grows from month to month.
It’s not about those vanity metrics, it’s about getting paid, and making more when you spot the opportunity.
Most of the time it’s the market and sector rotation. Today it will be earnings.
We’ll have a focus on #SQ and #COIN today.
Let’s make it an awesome day.