The TWISTED Game of Day Trading (and How To Win at It)

Let this circle represent 1000 retail forex traders. This is what 100,000 traders would look like. This is what 15 million traders would look like. This is the estimated amount of retail Forex traders in the world today. And 40% of them enter the market in the last three years only. And with an average of $5,000 in lifetime deposits. And considering that approximately 90% of traders lose 90% of their money in the first 90 days, this would mean that retail Forex traders lost Approximately a staggering $2024 billion in the last three years only. And this number could be substantially higher. That money, of course, hasn't disappeared into the ether all this time. There was a CFD broker taking the other side of those trades, AKA taking that money. But this is just Forex traders in any CFD brokers. This doesn't include the forex prop firm industry, the retail stock brokers industry, the retail option brokers industry, the cryptocurrency industry, other retail trading services like education, bots, signals, indicators and all the trading scams industry. This could easily make the retail trading industry as a whole a 100 billion dollar industry. And this is just a very small fraction of the money that every day flows in financial markets through investment banks, hedge funds, pension funds, sovereign funds, big companies, university endowments, ETPs, HFTs, CPOs, AMCs, all through the same two big exchanges and through dark pools.

And then there is you, a beginner retail trader trying to get out of the matrix. The matrix. Matrix, the matrix. And get rich fast with Forex from your childhood bedroom, hoping that one day you'll finally be able to show it off to your old school friends, thanks to the technical analysis course of some 20 year old pseudo trading guru. Sure, truth is, you're most likely just a little fish who got itself into the wrong waters. Hello.

Well, hi.

Most wannabe traders don't even realize that when you choose trading as a business, you're in the world of finance. It's a world where you'll find yourself from the very beginning in a position of extreme disadvantage. You're betting against people with PhD in finance and statistical analysis and macroeconomics and IT people who smarter than you, has much more money than you, more experience than you, better technology than you, better information than you, and have been dominating the world of finance for centuries and specifically designed this industry to profit. Profit from your ignorance, impatience and greed.

Good afternoon. Corona. Financial markets are one of the most important and determining economical and geopolitical battlefields in the world. It's a constant war between individuals with inconceivable amounts of money. And you think that a 500 a day forex easy strategy of a young YouTuber will help you? Come on, you have to start being smarter than that.

Shut the up. Let's face it, most likely you've been trying trading for some time now, maybe a couple months, maybe some years now, but still, you're most likely on the losing side of this war. And trust me when I tell you it's not just a lack of the proper mindset, which is really important, but it's also a lack of reliable information. If words like matching algorithms, or auction theory or yield curve don't sound familiar to you, or if you still believe that one secret algorithm is the root cause of every single market movement in every single market in every single time frame, and that banks hunt for your stop loss, these are all symptoms that you lack basic market knowledge. And being properly informed in finance is just the bare minimum requirement. If you don't have the right information, you can't defend yourself. And if you can't defend yourself, you will be fucking harvested. All right? There's no mercy in financial markets. If they can take your money, they will. So first step is knowledge. And in this channel, my goal is to provide you with loads of condensed, high quality, bullshit free, advanced trading knowledge and share with you the experience and insights of and other highly experienced legit trading professionals. So you might want to subscribe in this video. My goal is to open your mind and uncover some disturbing truth about the retail trading industry that keep you a victim of this big casino. And what for me are the three most important step that you need to take in order to cut through the noise, cut through the bullshit and be able to make it in trading. But before we start, if you seriously want to stop trying to learn trading from fake social media gurus and learn from the world champions of trading, instead, you might be interested in sponsor World Class Edge. As in World Class Edge, you can literally learn trading from the best traders in the world. If I click on Patrick, for example, Patrick Neal has done more than a thousand percent with an average of 150% per year. And these are all the times he joined. It's like nine times. And you can learn trading directly from him and his team of traders, including his mentor Tom. We're talking about people with five years of track record and amazing performances in all markets. Click the link in the description to join a free one hour live masterclass where they will show you the basics of their approach and present their mentorship programs. Now Back to the video.

We live in the age of digital money gurus. The Wolf of Wall street movie was born at the very explosion of a new wave of young money gurus and fueled the hype for a whole new generation of people trying to win at life and become millionaires. And while self realization is a very noble sentiment, an unconceivable amount of people started being fed and started believing this concept that somehow there is some secret methods to make a lot of money in an easy way, quickly and without risks. And all of them had to find out the hard way that there is no such thing. But why does this idea tackle so much into people's minds? It's crucial to understand this basic principle to understand why the failure rate in trading is so high as 90, 95%. Why would someone lose their entire life on a clear scam? Why is there still today an epitome of ludo mania maniac losing their self in front of slot machines? Why some traders keep losing and losing for 1, 2, 3, 5, 10 years and never stop. The reason of course lies in the way our brain is wired. Evolutionarily speaking, humans fall very easily and deeply respond in their core in the so called hedonistic bias. Maximize our pleasure and minimize the pain, getting the best result with the lowest effort. We want to get in shape, but fast and without effort. We want to make a lot of money, but not risking anything and in a fast and easy way. And that's what every single online advertisement about business model is leveraging against you. If you study any marketing course, that's what they will teach you in the first lesson. You have to make people believe that a big transformation of your shitty life not only is possible, but it's probable while requiring the lowest effort, the lowest time and the lowest risk. This is how you hook them on an emotional level. So that then you can use flawlessly rational or pseudo rational arguments to lubricate and facilitate that choice. The trading and the finance industry as a whole does exactly the same thing. It attracts dumb money by emotionally manipulating uninformed and impulsive people, which is most people, by leveraging on the hedonistic bias. And this happens on every level. It happens when a guru try to sell you their technical analysis course or their signal service, when they show you their Lambos, when the broker reminds you that there's a news event, or when it offers you a high leverage. It happens in so many different and subtle ways that sometimes it's even hard to realize. The big casino of the trading industry and the gurus and the brokers are all doing their best to make you believe that dream. So inside the head, in the back of the brain of every trader, there is a little Ludo maniac who when finally presented the opportunity of making money with trading, he fucking loves that. You know, it's kind of doable, it's kind of quick, and a radical change of your life is a couple clicks away. And at that moment, at that exact moment when we chose trading as a business, something started that I like to call the greed dilemma. And the greed dilemma is this. You started trading because you thought it was possible to make a lot of money. Because on paper it is. It feels somehow like a glitch in the system. If you got in trading is because you want a nice lifestyle, because you want to make millions of dollars. Then you get into trading and you more or less quickly find out that if you focus on the end goal, you lose. You have to focus on the process instead. You can't just follow your greed in every trade. To be successful as a trader, you need to become a cold executioner of this evil mathematical plan milking this big breast of financial markets. So greed was the thing that got you here in the first place. And it's the very thing that is keeping you from success. Because trading, more than any other business out there, requires you to emotionally detach from the same result that gave you the motivation to begin with. This is the greed dilemma.

Trading, at the end of the day, it's the most money related thing in the world. Trading is a war between money. What drives financial market is greed. There is no reason to trade other than greed. You're not creating a new something, you're not bringing new solutions to the world and sell it to a market to make a profit. You're just a greedy bastard trying to egoistically change your life. And that's okay. Every successful trader is like this. So to reach success, you have to play smart with greed instead. Because if you let it control your emotions while you're trading, it will be your worst enemy. If you keep the right amount of it, it can be your best ally. Positive greed, that little ego or egoism that ultimately drives capitalism as a whole, is okay. It's needed in trading. As long as it stays that small fire in you that keeps you from quitting, that fuels your discipline to stay in the right path. But as a beginner, in order to keep it that way, you need to calm the fuck down, all right? And start rationalizing and playing some smart moves. The most important of which is Finding an actual edge.

In the standard European roulette, there is exactly the same number of red and black slots. So you might think the chances of winning are 50 50, but it actually is around 47% because there's a catch, and that is the green slot. The green slot is the edge of the casino. That is what takes your chances below randomness. And in trading, the market can go up or can go down. So if you trade completely randomly, there is technically 50% chances of winning and 50 of losing. But the brokers always keep at least commissions and maybe also a little bit of spread markup. That's why in the long term, if you were to trade completely randomly, you would erode all your money out of commission. That's why traders try to increase their chances by finding a statistical edge. An edge is whatever takes you above that 50, 50. But how does one find it? And how can you be sure that that edge is valid and will stay valid in the future? Problem is, in the world of finance, there's so many instruments, so many tools, so many markets, so many strategies, so many ways to make money to choose from. So many that you probably don't even know they exist. And just like this, because of laziness, beginners will choose the first, most common, most accessible and perceivably easy answer that the Internet will provide, which usually is forex CFDs. Everyone today can trade these. There's basically zero entry barrier. You can open an account with as low as $10. And when a product is free and it's easy to access, it means you are the product. What beginner trader don't realize is that the industry lures them to trade low grade, unregulated, untransparent product like CFDs or cryptos. While professionals rarely trade CFDs only, but mostly prefer trading futures and options. And they trade bonds and stocks through macroeconomics, order flow and volume data and option data. All things that of course are not as sexy and perceivably easy as drawing a couple lines and shape on a chart. And cryptos that will make a thousand percent in two days. That's why the average trader rely on these. That's why the big slaughter happens there. Beginner trader don't know that behind a candle which has four pieces of information, there is a world of information like order flow that you can use to have a better and more objective understanding of the markets. Beginner traders don't understand that new trends are not set by a price breaking a previous high, but by market expectations and sentiment on the next economic cycle. They mostly have no idea that using options, you can manage risk in a completely different way without the need of a stop loss, or without having to guess the direction of the price. But using strategies simply based on volatility. And the big finance bros want to keep it that way. They love to keep us fighting about which concepts are better. Meanwhile, they are using tools that actually give them a better edge. So even though it's true that every strategy can work, that a simple price action strategy can work, or a basic support and resistance strategy with some trend line could potentially work. But at the same time, yes, you can hit the target with a slingshot as well as with a bow, a ballistic bow, or a sniper rifle with thermal vision. With each one of these tools you have to be the one who aims and shoots properly. But if you master the rifle, you can probably have a better hit rate and precision than with a slingshot. So if choosing the right financial instrument and the right tools is the first step in finding an edge, another step is definitely which asset you should trade. Usually people start with forex, but with no particular reason, they are led to forex by the industry as a first asset class. But it's not necessarily always the best option. Big currency pair like Euro dollar can spend a lot of time in ranges and they tend to trade the same ranges that are strongly defended by central banks and government. While equity indices like S and P have a more mean, reverting and bullish nature. So in periods of high liquidity, there are amazing trending markets to follow. And in all of this macroeconomic scale, sentiment and fundamentals allow you to place yourself where the volatility and the big trends will happen. And the next important step is choosing the right trading style, the right time frame, because the industry is constantly pushing traders to do as many trades as possible with the biggest size possible. So you move a lot of lots and contracts and pay them loads of commissions. And this way it's more easy to trigger a gambling kind of attitude. So the more you are scalping, the better for the industry. And to be clear, I have absolutely nothing against scalping. I use some scalping strategies myself and my friend and partner Fabio is one of the greatest scalper I've ever known and he's for the second or third time in the leaderboards of the Robins World cup day trading championships. So yes, you can have an edge as a scalper, but it's definitely not a trading style I would suggest to everybody, especially beginners, because it requires a very strong psychology and an amazing Level of focus and stress management. Plus with most strategies, especially algorithmical ones, there is a steep inverse correlation between trading speech and edge decay. Because the lower the time frame, the higher the competition. For short term edges, the higher the so called book efficiency. Because trading in derivatives is a zero sum game. So every edge is a market inefficiency. Just think about it. If someone keeps winning, it means that someone else is losing and eventually they are going to quit or change their trading styles. So you're going to start having less and less counterparty to your trades and so less setups. Then maybe more people are going to find out about the same edge that you're using. And through time this is going to erode your edge more and more. So scalpers will more often need to readapt and optimize their strategy based on new market conditions to incur in stop loss streaks. So as a scalper is better to opt for a strategy that has a high win rate. The higher the time frame instead, the less you will be subject and victim to edge decay and market noise. For most mechanical strategies, Macro trend as example, even though they can significantly differ from one another, are pretty reliable and and don't feel the same level of market efficiency. So choosing the right time frame is a very crucial choice as to where to find an edge. And in all of this, backtesting plays a very important role. Your edge should be based on data, your risk management should be based on data, and so on and so forth. But even if traders desperately try to find an edge, still around 70% of traders lose, lose all of their money. And 99% of people who ever traded will never achieve through trading their dream of financial freedom. And interestingly this means that not only traders are below randomness, but they have a negative edge. So by simply taking the trades that they take on the other side, you would be profitable. So why does our mind constantly fuck it up?

Maximum result, Lowest effort Chasing pleasure, Escaping pain The hedonistic principle is defining the very nature of the human mind. A beginner trader opens a trade in search of pleasure and exit a trade too early for escaping pain. And fear of pain is the main driving factor of unsuccessful trading. Being in a winning position that start to consolidate or retrace being in a losing position. These are situation where every trader, even the most experienced and seasoned ones will feel some level of cognitive dissonance. Cognitive dissonance discussed by legendary trader Tom Hogart in his book Best Loser Win is when you have two conflicting beliefs in your mind. You know your strategy says hold but you want to close. You know, your strategy says don't open here, but you don't want to miss the next move or you want to recover from a previous loss. And trading is not about getting every market move. It's not about being always right. It's becoming the cold executive of a specific plan. A plan that you have written down that you back tested and forward tested, which aim is to take whatever the market can give you with a high probability. So the focus should stay in the process, not on the result. That's why people luring you with results are not making you a favor, because they're literally facilitating your cognitive dissonance. You shouldn't focus on the result. And the best way to treat your mind as a beginner is to treat it like a puppy. I recently got a dog, his name is Nove and he's an Australian shepherd. And when you first get a puppy, you usually keep it in a little cage or in a confined space so it doesn't go out pooping and peeing and biting stuff and destroying your whole house. And a beginner trader should do the same thing with its mind. When you open a position, don't let your immature and unexperienced and instinctive and impulsive mind fuck it up. Close it in a cage, stay away from the charts, set the trade and fucking forget about it. If you constantly stay in front of a position, there is a way higher chance you are going to fuck it up. No matter how great your edge, how great your strategy, how great your back testing data or your demo trading, the only way you are going to become a successful trader is constantly putting yourself through the pain of the cognitive dissonance of a real money live account, open trading position. And unfortunately no course can help you with that. The only way you can be successful as trading is going through the pain yourself or with a mentor. And doing it constantly long enough to not let it affect your trading decision anymore. No course can teach you, no demo account can prepare you and no signal service can save you. You have to be the one in control of your mind and your money. Other than self domestication, you should always, but especially at the beginning, keep tracking your trades. To monitor your edge, keep a personal journal as a therapy for bad trading days. Not only a technical journal, but a personal one. Journaling has been proven by clinical studies to be one of the best tools that psychologist prescribe to patients to actively treat different form of mental disorders. Then keep yourself a little booklet of all your worst trading days and mistakes and have a look at it before every single session. Trading is a long journey against the market and against yourself. From here on, you're on your own. So good luck. Ciao.