A Practice That’s Bad In The Real World But Good For Trading

It’s Discrimination.

Disqualifying someone based on prejudice is a quick way to vilify yourself. But when it comes to trading, it’s legal. And it’s right.

You must discriminate against:

  • Other trading styles.
  • Trades you didn’t plan to take.
  • Pairs and cryptos you don’t trade.
  • Trading advice that’s not in sync with your plan.
  • Your emotions and impulses.
  • Bad habits in general.

You can control only two things in trading – Entries and exits.

Everything else is a product of other people’s actions. When you get in and out dictates how consistent you are. Now…What I’m about to say might sound controversial, but you need to hear it:

Consistency is more important than profits.

Profits result from unpredictable market behaviour, while consistency determines whether you’ll be profitable long term.

How does discrimination fit into this?

Modern traders aren’t discriminating against what their trading plan doesn’t include. In return, they overtrade, which makes their progress unforecastable. The ideal way to find out if a strategy works is by executing it until you get solid results. However, it’s common for traders to jump from strategy to strategy just to end up with random profits and losses.

Less is more in trading.

The less charts you look at, strategies you trade, or technicalities your strategy has, the more focus you have on finding out what works.

Here’s a realistic yet savage way to look at trading.

The market is a battlefield. Trading strategies are rifles. Trading capital is ammunition.

There are two teams, longs and shorts. Every trader directly or indirectly chooses a side whenever they trade.

Team longs bring the price up.

Team shorts bring the price down.

Trading is an indefinite price tug-of-war between longs and shorts.

And due to human behavioural patterns, working strategies, news, hedging, and other external factors, markets contain key information which gives people like you a second-movers advantage.

For example, a large trader may insert a long at a certain time of the day every week. If you were to spot this, you’d look for a strategy where you’d buy before the other trader does.

Thinking from a military-like trading perspective is psychic self-defence against impulses that make you deter from your trading plan.

Soldiers would never step onto a battlefield without a game plan.

Traders should never enter the markets without a solid strategy.

You’ll waste ammo (capital) thinking you can play both sides (time the market). Most traders continue to do this, which is why 80% lose money.

Discriminate against bad trading habits and follow this step-by-step post to build a strategy for the market you trade: