Trading Psychology is Bullsh*t... here's why.

You believing that trading psychology is what's holding you back from being a profitable trader is actually your downfall. And in this video, I'm going to explain exactly how. So we as traders, we are wired to believe that we're not profitable because we have some sort of problem. We allow our emotions to come into trading. Trading is 90 psychology, and that is true to a certain extent. However, there are certain stages that we as traders must cross before we face the trading psychology road. And in this video, I kind of want to dive into that. Exactly. Because when I started out trading, I would get into that trap, right? Oh, man. I trade well for one week and then I give it all back because my trading psychology is all messed up or I don't have a good understanding about my emotions. And once again, it does play a role. But there is a point that, that, that needs to play a role and there's a point where you need to focus on it. So let me explain. This is where most traders are, right? Let's just go here. Most traders are at a place where they want to basically be profitable, right? Every trader wants to get to this point. However, the case is, be it from whatever strategy they're trading, be it whatever focus point they have in the market, they want to be profitable. Now, the problem is the moment any trader goes and starts trading and makes a little bit of money and then they start giving that money back or they start going into drawdown, we immediately go, it's because of our emotions. Now the problem here is we can come to this road of emotions until we have developed an edge. Once again, guys, this emotion component is something we can jump to as traders until we have developed edge. An edge. Now, what do I mean by developing an edge? This is a very big word thrown around all the time, right? So edge and emotions combined, like conquering both is what makes a successful trader, Right? Let's put the dollar sign. That's what will make a successful trader. But this is what needs to be conquered first. And then after this is conquered, guide, after you have an edge, after it is proven, after it is tested, then we can only conquer this. Most traders try to conquer this, which is emotion part, without having an edge. And every time they're unprofitable or their trading performance goes down, they immediately label it to that. So now let's go into how do we build this? So in order to have an edge, right, there's a few things that you must do as a trader. Number one, you need to understand what or what your approach is to the Overall market. So for example, I look at order flow, right? I focus on price action, right? My whole idea of trading, right? What my trading structure and idea is based off is based off identify the difference or the imbalance between buyers and sellers. In simple terms, I believe that on every trade or certain trading days, there is an imbalance between buyers and sellers. And my job becomes to identify who is in control. That is where I tend to look for an edge. That's where I tend to look for some sort of opportunity that I can capitalize off with that idea of trading in the markets. I then build setups which I call playbooks. And in these setups or playbooks, I like to have criteria. So for example, I may have something called an opening range breakout, right? Let's say that is a part of my playbook or that is part of my setup. This playbook setup follows this structure that I believe in the market. This, this kind of idea that I have, that the market is an auction house, that there is or going to be imbalances between buyers and sellers. That's why we see price fluctuate higher and lower. And with that I will create once again these setups. One set up being opening range breakout, another setup being, let's just say, the morning flush. And once again, names don't matter. You can, you can call any of these, you know, setups, any name, whatever the case is. Now, what it goes down to, it goes down to having a criteria, entry criteria, exit criterias, right? What are entry criteria for my morning flush strategy? What are entry criteria for my opening range breakout? So if I go on my opening range breakout strategy and I'll show you a playbook example up here, you guys will see the entry criteria and exit criteria that I have laid out. And every time I take a trade, I have to make sure that these entry criteria align to. So the entry criteria could be market conditions, right? It could be conditions for that particular stock, particular instrument. For example, for opening range breakouts, I look for gaps. That's one thing I look for. I look for gaps, right? I look for news, right? I look for, you know, depending on. And this is all dependent on what markets you trade. So if you trade stocks, you are looking for some pre market activity before the market opens. You are looking for gaps in the New York session open, or are you looking for a high arval, right? And once again, these are contingent to what your setups are, what your approach to the market is. So for arval, I may be looking for relative volume, I may be looking for A higher pre market move supported by volume, right? These are where my market conditions or entry conditions may line up with this particular setup. Now when I have this setup laid out, my job then becomes to back test guys. Back test, back test, back test, back test, back test. Make sure you back test a strategy all the way. Now when I back test a strategy, I am applying the same rules that I have and I'm using these rules to basically have a strong understanding of entry criteria that I may, I may use in the past and I may use in the future. When these rules are set out, I then go back in time on particular instruments and I test how these rules play out. If I was to trade this particular way now would do this over and over and over again and I would track this data, right? By identifying strengths and weaknesses of that setup. What are the best times this setup works and I would get myself comfortable. Once I am done back testing this setup, I then go and I forward test, right? With real capital, right? Very small money. I test this strategy, I test this approach to the market and I test it for some time until I have a good amount of data. Once I have a good amount of data, I will then go and apply it to real markets and scale up more money. Now once that is done, that is where emotions pop up. That is where your psychology needs to be mastered. Up until I have a way of trading correctly. Up until I have playbooks that are tested, I have an edge that showcases that it works, it makes money, it has a high R multiple, maybe it has a high win percentage based on whatever the edge or that approach to the market requires. Once that is done, like I said, that is where emotions then pop up. When I go into the real markets and I put in more capital and I start scaling up and I start being aggressive, yes, my emotions will pop up where I will hesitate on executing some of my setups. I will be scared of taking a loss. And I may sell early or I may sell too late, or I may not want to take the trade for, you know, various reasons. That is when this becomes a big, big thing. So as I was saying, you know, having an edge, right? And, and mastering your emotions is what will make you a successful trader. But the problem with traders is that they jump into emotions without ever having a proper edge. So depending on where you are in your trading career, number one, make sure that you have a proper system that is back tested, that is proven, and then that is forward tested with very minimal capital. And I say very minimal capital because if you do it minimal capital, you won't be really mentally invested to allow your emotions to overtake. Your emotions start coming in when you have tons of capital, but if you do with small capital, it's easy to just gauge that strategy working or not. And then once you scale up now you're like, okay, well, now I know I'm going to have to deal with the emotion part. Don't get trapped into the same trap that I was in, guys. And I know a lot of people are in the same trap where we just keep blaming trading psychology, trading psychology, emotions, emotions, emotions. And once again, that's a fair statement. Only when you have developed an edge.