Are you sick of the Emotional Ups & Downs of Trading

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Hey, are you an analytical professional who wants to market master the markets, but maybe you're just sick of the emotional ups and downs and the uncertainty and not knowing whether you've got an approach that will actually work. My name is Adrian Reed. I'm the founder of Enlightened Stock Trading. And in this video I want to show you four methods of trading that just don't work. They're absolutely a path to wasted time, frustration and probably financial ruining. And I want to show you one path that works really well, really quickly, and it'll help you master the markets fast. So let's have a look at four approaches that just don't work and see what most traders are doing wrong. On the screen here, you can see massive Facebook group focused on stock trading. It's called the Stock Trading group. It's got 132,000 members. And if you go to this group and you scroll down, you'll see dozens and dozens or hundreds of traders talking about different stocks. And what's your hot tip for tomorrow and what are you buying? And this is going to moon and what's your thoughts on this? And what about those two? I mean, that's a very insightful question, isn't it? And.

You know, is this a good long term investment? And basically what they're doing is asking everyone else to tell them exactly what to do. And if you're going to make money trading the market, you need to have an approach that you're confident in rather than relying on the faceless masses on social media telling you what to trade. If you're going into these groups and you're asking for what stock to buy, you are on the wrong path. I hate to say it because no one in the faceless crowd of social media is going to give you stock tips that are actually going to work for you in the long run. Why not? Why don't stock tips work well? Well, so many reasons, right? Because first of all, everyone has their own sort of agenda and pet stocks that they love and stocks that they're in right now and things that they're focusing on. But when you go into one of these groups and you ask, what should I buy? You're asking for one person's or many people's tips at one point in time and for only one part of the transaction. What should I buy is only part of the trade, right? You've got to buy a stock, you've got to decide how much of that stock to buy, you've got to hold it, and you've got to decide exactly when to exit it. And asking someone, what should I buy? Is nowhere near enough information. Even if they did give you a good tip, you still don't know how much to buy and you still don't know when to exit it. And you don't know when they change their mind. I could be buying a stock today but close it tomorrow because the trend changed and I got a signal to exit. So going into a Facebook group or Twitter, looking on a Twitter stream or going to Reddit asking what stock to buy, or what do you think of this stock? What do you think of that stock? Is a path to ruin because you're not getting a complete story. So what's the next. The next thing that doesn't work. Let's have a look at this. I've got a chart here of.

The Spy. And this is a pretty typical technical analysis, technical traders chart. You know, you've got the candlestick chart up the top, you've got some moving averages, you've got Bollinger bands, you got volume, and you got more volume here just to make it more confusing. And then a whole bunch of indicators, because the more indicators you got, the better your insight into the stock, right? Well, maybe. But look, we've got macd, we've got rsi, we've got stochastics, we got rate of change, we've got ABX and DI plus and minus. And just for good measure, we can chuck the VIX on the chart. And maybe all of these different mathematical manipulations of price might give us a clear indication of when to buy and when to sell, right? Wrong. The trouble is, all of these different indicators have, you know, they're just derivations of price and they're all calculating off the same information, you know, open, high, low, close and volume. And they're just different formulas applied to that same, that same data. So if you add more and more indicators, which are just different mathematical manipulations of price and volume, do you get the right answer? Do you get better and better forecast? Unfortunately, you don't. Because what happens is those formulas, those indicators, they're based on different formulas. And some of them will be telling you to buy, some of them will be telling you to sell, and some of them will be very unclear. And the more indicators you add, typically the more confused you get, the more confused you get, the less decisively you can take action and the more you second guess yourself. So having a chart like this with more and more indicators to tell you what to trade doesn't work either, because you don't know which signal to take. You're looking at so many different squiggly lines in the charts, you can't possibly make rational, consistent decisions. There's another approach that traders typically take on the charts and that's technical analysis. So drawing trend lines and supports and resistance and all this sort of thing. And the trouble with this is it's more black magic and art than it is science because everything that you're doing, you're drawing trend lines and you're finding areas of support and resistance and blah, blah, blah. I don't do this, by the way. All of this is based on the levels that happened in the past. And it's very easy to join two lines in the past and say, look, support held, or look, resistance was maintained. Or look, the price bounced off the trend line because you can see what actually happened and you draw the trend line after the event. The trouble with this sort of trading is in real time, it's almost impossible to draw a trend line on the hard right edge of the chart. That actually helps you because the chart, the price action moves. And so where you would draw the trend line moves day by day. I mean, have a look at. Let me come back to the chart here. Just zoom in and look at this thing. So there was a bottom here and then there was a low. And at this point, if I wanted to draw a trend line, I would have joined that to that. But then later on that trend line was broken. It's like, oh, it must be a downtrend. Oh, no, that was just a correction in the downtrend. Right. So now I've got, obviously I've got my trend line wrong, so I should draw it from this low to this low. Oh, that got broken. Oh, it must be a downtrend. Oh, it's not a downtrend. It went back up. Obviously I got my trend line wrong and so on and so on. So you keep redrawing the trend line, hoping that eventually it'll, it'll hold. And again, it's not a consistent way to trade. And two traders will draw two completely different trend lines and support and resistance patterns on the chart. So this doesn't help either. So as you pursue this technical analysis and the indicators, the confusion mounts, right? Then the logical thing is, oh, well, indicators are too confusing. Let's just go for pure price. Let's just unadulterated, let's just look at price action, which is great, right, because we get all of those indicators out of the way, we'll be at one with the markets and we'll just see where it's going. Again, complete bullshit, because you can't predict what's happening, right? So you might have some in some candlestick patterns or some insight into it, but it's very, very hard to just look at exactly what's going on in the chart right now and make consistent trading decisions day after day, week after week, month after month. And the problem is, if we're going to trade consistently over the long run, what do we need to do? We need to have a proven method that we can repeat over and over and over. And the best way to eliminate all of that uncertainty, all of that confusion, is to put absolute rules in place. Rules that tell you exactly when to buy, exactly how much to buy, and exactly when to sell. So here's my proposed approach, which eliminates 99% of the problems that most traders have. Blow away the charts, forget about all of the indicators, forget about drawing trend lines and support and resistance, and forget about trying to trade with naked price action and put simple rules in place. So I've got a system here which incidentally, I'm going to be giving away if you register for my. For my coming upcoming live workshop called Market Mastery Boot Camp. Link in the description.

If you register for Market Mastery Bootcamp, you're going to get.

Fully disclosed access to this system so that you can see how it works. A trading system is just a simple set of rules that tells you exactly when to get in, exactly how much to buy, and exactly when to get out. Now, the beautiful thing about this is if you have objective rules that tell you when to get in and when to get out, they become testable. Testable objectively, rather than looking back on the chart and going, oh, yeah, I would have drawn the trend line here. And oh yeah, that I would have said that was resistance. So, yeah, I would have sold there. All of that is fine in hindsight, but in real time, it just doesn't work. But what does work in real time is purely objective rules that are defined in a way that if I have the rules and you have the rules, we get exactly the same signal every single time. Systematic trading is, this is what it's called, eliminates the vast majority of problems traders have. So let's have a look at what this set of objective rules does. I'm not going to give you the rules today. You've got to register for Market Mastery Bootcamp to get the rules. But click the link in the description and register and you'll get those rules on the boot camp, which is Coming up really, really soon. So here is my analysis window in amibroker and I've got the rules loaded here. I'm not going to show you the rules today. You've got to register for Market Mastery Bootcamp to get the rules, but I'm just going to run a backtest. And what this is doing is it's taking those rules, applying them to the entire history of this ticker. Actually, I've got a. Yeah, it's applying them to the entire history of this ticker. This system is being applied to the tqqq, which is the leverage Q's etf. And for every day in the history of that ticker, it's looking for where the buy signals were and where the sell signals were, and it's applying those signals to the chart. So objectively, not subjectively, like you would with technical analysis, or when you're doing subjective assessment of your indicators, it's saying exactly when this rule is true and exactly when that rule is true. That's the buy and sell. And so you can see when you do that, you get a complete list of all of the trades that you would have taken in the past based on these rules. And the cool thing about this is then you can start to look at the performance of these rules. And this very simple system, super elegant, easy to trade, doesn't even need complicated software, produced a compound annual return of 23%. It's 140 trades. It's ultra simple. So before you tell me, oh, that's not enough trades to be statistically significant. This system is so simple that it is actually enough to make this viable. 77% winners, 22% losers, a drawdown of 30%. Okay, it's not a perfect system, but making 23% return with a max drawdown of 30% is way better than what the buy and hold of the broader market indexes indices would have given you. And you can also see the equity curve, which shows you how your account would have changed, and the drawdown profile showing when and how long those drawdowns occurred. Now, this system includes slippage, it includes commission. So it's a realistic backtest. It's a more than enough, more than adequate allowance for slippage and commission. And what happens when you have these rules is you can test them like I just showed you. You can see exactly how they performed in the past and that can give you a degree of confidence about whether or not they'll work in the future. And so you eliminate the challenges of subjective technical analysis using indicators of drawing trend lines and support and resistance, which change over time and are super hard to do at the far right hand edge of the chart. And you also eliminate the uncertainty and lack of reproducibility of trading with naked price action charts. This is reproducible. And the brilliant thing is if I use these rules and use these rules, we get exactly the same answer every time, which means we can both have confidence that we're doing the same thing. I don't know if you've realized, but so many people who are doing technical analysis and subjective trading on the, on the Internet, they'll come up with these rules and they'll show you how they trade them. But then you might try and follow their rules and they follow the rules and you get completely different trades because there's some subjectivity that goes into these decisions. Systematic trading like this eliminates all of the subjectivity and makes it so much easier. So here's what I want you to do. If you're an analytical professional and you want to master the markets, and this sounds interesting to you, what I want you to do is click the link in the description and register for Market Mastery bootcamp. It's a two day live workshop. We're running 90 minutes each day and we're going to cover the whole journey from Launch to Mastery of systematic trading. And I'm going to show you exactly what you have to do step by step to get from Launch to Mastery. And I'm also going to give you the rules for this system, fully disclosed, fully coded, ready for you to go, just for registering. So click the link in the description, register for Market Mastery Boot Camp and I will see you there. My name is Adrian Reed. This is enlightened Stock trading and I look forward to accelerating your journey to trading mastery. Bye for now.