8 Trading Rules To Become Profitable in 2024...

Becoming a successful trader is a marathon and not a sprint. Now, a lot of people that try to become successful, they try to rush the process or they cut corners. Now in this video, I want to talk about things that you must do in order to become a successful and profitable trader. The first thing which is the most important thing is have a playbook, have a strategy, right? You need to have a well defined system, well defined edge in the market that allows you to make money. If you don't have this, it will make it very, very difficult for you to be profitable. So in order to develop a play, you must do the following things. Number one, you have to identify the market criteria where this playbook or strategy will work. Number two, you need to have entry and exit rules for this strategy that tells you that based on these criteria, you can enter or exit. Now, once you have these rules early on, you have to understand that the rules will not really make sense. You don't have real backing for these rules. And in order to back these and make sense of them, you must backtest. You have to backtest the strategy, you have to backtest the rules, you have to refine that system. Once you backtest and you refine that system, jump into trading with small size. I know everyone wants to make a lot of money when it comes to trading, but trust me, guys start off with the strategy, one or two strategies, not a lot. Build that strategy, build that playbook with criteria, back test it. Once you back test it, go with the real account with very minimal size so you can build confidence, build experience in the markets and just see what you need to tweak in that playbook or strategy to actually allow it to get better. And with that strategy or playbook, you have to make sure you stay consistent with it, right? So a lot of traders I see, they develop a strategy, but they change it every day. They don't have clear criteria, they don't have clear use cases for that strategy. That makes sense. They're adjusting every day depending on how they feel or what they feel, right? And that's not what you want to do. You want to have a clear cut system that is well tested, that is defined, and then use it. The next thing is journaling. Now, I know a lot of people hate the concept of journaling when it comes to trading, but I promise you that journaling and tracking your data is one of the most crucial aspects of becoming a profitable trader. You have to have your stats, you have to know what strategies are performing well, what days do you perform well, what size you perform well under what time periods, you perform well or bad under. You have to understand what is causing you to go. On losing streaks, how do you respond? On losing streaks, how do you respond? And winning streaks. Without that data, you can't really fully maximize your trading capacity, right? So for me, it starts off with having a proper detailed pre market game plan. It starts off with me recapping every single trade that I've taken. What I did well, what I did wrong, maybe I sold too early. Why did I sell too early? What did I see, what did I miss? How can I improve? And guys, keep in mind, trading is a game that we are constantly looking to improve day over day, year over year. Even me, I've been trading for 10 years. I'm still tracking my data, I'm still journaling, and I'm still looking to get better. Because there's never a moment in trading where you get to a point where you're like, okay, I made it. I still haven't gotten to that point where I feel like I've made it. And that's something you have to keep on your mind, right? That trading is something where you have to keep going. There's never that point where you get at the top of the mountain or top of the hill. You have to keep refining the system, keep updating, keep improving, and the moment you stop, the losses will catch up to you. Now if you want to start journaling, I have a link down below for trade Zella. Check it out, get started. If not, just, just start journaling any possible way you can and take it from there. The next one is stop focusing on your PNL as an indication for success or not in the markets. I see a lot of beginner traders or big traders at all. They'll say, well, this month I didn't make a lot of money, so I traded bad. I had a red month or a flat month. So I'm a terrible trader. And I tell traders that don't take your P and L as a measure of your success in the markets, especially when you start out. And the reason for that is you're not going to find consistency in the markets for some time. And that's a given. It's going to take you time, right? Because you're not going to find consistency. That consistency will not represent in the dollar value of results. Like you won't have a 10k a month, a 12k month, a 15k month and so on, right? But what you can do is you can start measuring other aspects of your trading that you're allowed to say, well, I am improving. While I am improving in backtesting, I am able to find a strategy that has a 40% win ratio. Well, now I've improved it to a 50% win ratio. I have gotten my win to loss ratio from a 2 to a 2.5. I have gotten better at cutting my losses. I have gotten better at allowing certain trades to run. I have gotten better at defining pre market movements or the game plans that I had. They are working a lot better. If you start shifting your focus onto things that you can measure and that aren't P and L based, you will a feel a lot more comfortable, you will feel more confident and then you won't, you just won't get discouraged, right? Because imagine you're trading for six months, you're not profitable, like oh well, it's not working out, let me quit. But imagine you trade for six months and you're like, well, this is the progress I've made in six months. These are the areas I've improved in. That allows you to keep going and it allows you to keep being focused on the process, keeps focused on the systems and it allows you to focus on just getting better. And if you do that within some time, the money will automatically show up. My favorite one, risk. Keep your risk consistent. Risk is the most important part of trading, guys. It's something that we have to keep in mind if we want to become profitable and successful traders. We have to control one of the things that we have control over and that is risk. How much risk do we put on each trade? How do we stay consistent with risk? Especially starting out, right? Because starting out, our main goal is to stay alive as long as we possibly can, right? We want to be able to put on as many trades as we can without having massive drawdowns or massive blow ups in our account. So in order to do that, we keep our risk consistent, we keep it minimal and we keep it going for a really long period of time until we allow ourselves to build confidence. So I have a video I'm going to post up here. It's a whole risk video of our multiple how to position size. I highly recommend check it out and just focus on the risk component of trading. The next thing to do is have a pre market game plan. Before you take on any session, you need to have a routine, you need to have a system before every session. So every time before I take any trades or I start my trading day or session, whatever the case may be, I am looking at a game plan. I am Building a game plan based on my hypothesis, based on what I believe are the possibilities that are happening in the market. I'm aware of all of the economic events that are happening. I'm aware of all of my key levels in the market. I'm aware of yesterday's movements, upcoming movements, upcoming events and so on that may possibly move the market. And then I also allow myself to get in the right state of mind. So I have to do this 20 to 30 minutes before the market opens or I start my session. So once again, so I can get in the right state of mind, I have an idea of what I'm doing. What you should not be doing is you should not wake up. First thing you do, open your laptop and put on a trade. That's not the way to go, guys. You want to make sure you have a well defined plan. You want to make sure you're in the right state of mind and you are active to be able to put on trades and be able to think properly. And you should make a rule. And I've had this rule for a really long time where if I'm not in front of my computer 30 minutes before with the following items, I'm not allowed to trade for the day. And because we have no boss as traders, which sounds cool, it also has a flip side because there's no one to hold us accountable and no one to tell us, hey, you can't trade this day or hey, this is wrong. We just kind of, you know, go on tilt and go crazy in terms of just putting on trades that don't make sense. And if I have two losing trades, I'm not allowed to increase my size. If I have three losing trades, I have to take a step back. When you set these rules and you follow them, you now allow yourselves to be aware of what is happening in your trading. You don't allow yourself to go on massive drawdowns or you know, go in massive tilts where you allow yourself to blow your account. So set these rules. And the first rule you should start from, in my opinion, is your pre market game plan. So this is my favorite one. Stop paying attention to everyone else on social media, especially the traders. Stop it. It is destroying you. It is very easy to go on YouTube, go on TikTok, go on Instagram and look at other traders posting these crazy gains and say, well, how do I get there? I need to get there, I need to do this, I need to increase my size. And what that does is it just puts you in a state of mind where you Start taking very stupid trades. Ignore all the outside noise, right? Just, just stop, stop paying attention to all the social media nonsense with traders and so on. And if you need to get off, get off. Because when you start paying attention to multiple people on social media, you start looking at different strategies, different ways to trade. Like, well, you know what, this guy did this, so I'm going to copy them. Well, today this guy did this, I'm going to copy them. So it doesn't allow you to build your own path and it also builds like this FOMO within yourself of seeing other people make X amount of money or X amount of success. And it forces your hand to take bad trades and also stop paying attention to so many different mentors that have different trading styles. Find one or two trading styles that makes sense, that you know, you like the way, you like to trade and stick to consuming content around that. If you consume content around everything, you want to allow yourself to become super great at one way of trading, one style of trading and so on. And I'll tell you guys, 99% of things that you see on social media, that you see on YouTube, especially in the trading space, is nonsense. It's not real. It's just, it's not real. People are feeding you bad ways of trading and feeding you complete utter bs. And it's very easy for that to create this illusion of I should be doing this or I should be able to be profitable in two months or three months. It's not the case. Stay in your lane, give yourself time, increase your time horizon and just allow your journey to be your journey. Own it and just be patient with it. And I promise, if you don't cut corners, if you don't go all over the place and you stick to the game plan, you stick to improving, you don't look around, I'm just trying to make money. You will eventually get to a point of being profitable and you will get to a point of being successful in this field. The last one is getting out of fantasy land. It's very easy for us as traders to go into fantasy land and think, if I was to buy here and I was to sell there, I would make so much money. And I would love to say that's true, but it is far from the truth. Guys. The truth is trading is very hard. And I've said this countless times, right? Trading is very difficult. There's very few people that will make it in the game of trading. Now from a competitive point, I want trading to be competitive. I want it to be difficult. I Enjoy that it's difficult. What I'm saying is the more difficult it is, the better the reward. So if you are in your trading journey, realize that it is going to be difficult. Be mentally prepared. Know that, hey, this is going to be difficult. Very few people are going to make it. These are the things that I must do and I must stick to. And I have to be able to not only conquer the markets, I have to be able to conquer myself. And I know you guys have heard psychology, psychology, psychology. It's a very big part of trading, 110%. And you need to understand that in order to be successful, there is a component where you have to conquer yourself, but you also have to have a strategy. You can't, you know, they both work hand in hand. Conquer yourself, make sure you have a good defined strategy. Put those two things together with the element of protecting your downside, which is risk. Do it for months and months and months and months consistently, day in and out. And once again, when you look behind you, you'll see how far you've come and you'll see how your PNL starts reflecting that. With that being said, I hope you guys all make it as profitable traders in the upcoming year and I wish to see every single person watching this succeed. Thank you so much for watching, guys.