Adrian Reid explains that traders must use a defined trading system and backtest it to build confidence and understand outcomes (wins, losses, gaps, run-lengths). He emphasizes strict risk management—small position sizes, minimal leverage, and stop controls—to avoid being wiped out so one can stay in the market long-term and build wealth.
First one is, if you're going to trade in stocks or crypto or futures or Forex or anything, you need a system. You need a set of rules that you know is comfort is profitable. And you need to have the confidence in those rules through backtesting. The way you backtesting builds confidence because you can see all the things that happen. You know the overnight, the gaps, you know the stops that hit your stop loss, you know the losses, you know the wins, you know how many losses in a row, you know how many wins in a row because you've tested it. That builds confidence and it also shows you how much risk you can take on each trade and not get wiped out. To have a system, test it, manage your risks to stay in the game. The biggest mistake is being wiped out if you got to. If you want to win the game and build wealth long term, you have to stay in the game. So no matter what happens, no matter how crazy the market gets, no matter how bad the economy, you can't lose all your money. You've got to stay in the game. That means you've got to manage your risk well. Position, size, very small, don't use much or any leverage so that you can't get wiped out. Then you can stay in the game long term, build your wealth and ultimately achieve the goals that you set for yourself.
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