If you're always taking low quality trades... watch this

There's a mistake that a lot of especially beginner traders are making that is just severely holding them back until they realize this. And this has to do with trade selection or more importantly, an exact kind of way that you score your trades so that you know which to prioritize and which not to prioritize. If you've ever struggled with situations where you know how a good trade looks like and you also know how a bad trade looks like, but for one reason or another, you just, maybe you're aware of this, maybe you're not aware of this, maybe you take more of the bad trades than you do the good ones. And if you struggle with this, especially when you know what a good one looks like, but then somehow, some way you don't take it, this video is probably going to be helpful, and I'm going to give it like, the analogy that I'm going to share with you is going to be very helpful. So this was inspired by a backtest review that I just did, essentially, inside Bootcamp. Something that I do is I go through each and every student's individual backtest sessions, and I kind of just give a commentary on, like, hey, this is what you're doing correct? This is what you're doing wrong, and this is potentially what you're missing. In the case of let's call him R. The biggest issue that I noticed that he was making was that, you know, fundamentally speaking, he understands the playbook within boot camp. He understands the steps. He's able to go from, let's say, higher time frame to medium time frame to lower time frame, and he's executing each and every single one of these steps correctly. But for one reason or another, he's prone to speculating in the sense that, just to give you an example, within the playbook of boot camp, you only take a trade either long or short, based on the daily bias, which means if the daily chart is telling you it's going up, then it doesn't matter if you think that it's going down for the day. You wait until there is a day where the higher time frame and the lower time frame are both aligned and going in the same direction before you take that trade. So he knew this, like, fundamental. Like, he was even saying it inside the backtest, like, okay, I know that the daily chart is pointing towards the upside, but I see this playing short. Now, in that particular example, he ended up being, well, he ended up getting for trade, but I'm sure for every one of those. And you, maybe you can relate as well for Every one of those, let's say random speculative trades that you do take, maybe you get one win for every like two losses. And overall it's not a positive expected value kind of play. For those of you who may not understand what that means, let's just say that if you, you know, put this out over, let's say a thousand trades of you doing this random speculating, if you win one trade for every two, like if you, for every win that you get, you lose two trades, guess what? That's not positive value, right? If anything, you continue to do this over the course of a thousand trades, you're going to be losing a whole lot of money. And so it doesn't matter if you win here and there in the short term, it's just kind of like random sample sizes or small sample sizes could even just be variance. What's important, the thing that's important to understand about succeeding as a trader is that it's not about individual moments or like individual outcomes. It's more of doing, consistently doing the right thing time and time again over the long term and ensuring that you're making like overall you're making money, overall you're making more money than you lose. I don't know why I lost my train of thought there. And this short term speculative stuff is not it. At the very least, it's not the highest quality of input that you can be putting in. And so the way I kind of explain this to, in, and especially if you, if you struggle with this, you're going to relate to, to this analogy that I'm going to give you, the way that I told him is that let's think about a food period at the bottom. I actually don't know what is the traditional food pyramid. I have completely gone like, I don't, I don't follow the traditional food pyramid. If anything, I'm much more towards carnival and just, yeah, primal stuff, whatever. I digress. So if you imagine the typical food pyramid at the bottom you have your, I believe it was carbohydrates. And then here you have like the second base you kind of have like your vegetables if I'm not mistaken. And then it's protein and then you have fats and then on the top you have your processed food. So you kind of want to structure your trades in a way that mimics a food pyramid in a sense that you want your base to be made up of trades that are fundamentally like, objectively speaking, good inputs, like the highest quality trades there is meaning there should be news days like you should be taking trades on news days. You want to make sure that the higher time frame and lower time frame are both pointing in the same direction. You want to make sure that you're trading within, let's say, the New York session compared to the Asia session, or even worse, trading on a weekend. And a variety of other criteria that you can come up with. Again, like, I'm just sharing this based on the perspective of Boot Camp and the system that I'm using. I basically just the way you can do this for yourself is just come up with a checklist, right? A comprehensive checklist of everything that you deem to be important before you dive into a trade. To give you an example, for me, that's type, frame alignment, that's one of them. Newsday. That's another one of them. Trading in the right session, that's another one of them. So that's three, and I have eight. So before I get into every trade, I will grade how many you know of those criteria are available at any given time. So, for example, let's say this trade, as of the time that I'm about to take this trade, let's say there are seven out of eight of those criteria present. And so I can now objectively, like, from very objective standpoint, I can now grade this trade as. Let's call it Level 3. I call it Level 3. As long as there are seven out of eight criteria that are met, this is called Level 3. In other words, it is just a fancy way or just my way of saying that this is an A plus trade. And so that consists of the base of that pyramid. As long as most of my trades that I do take, let's say 60 to 70% of my trades that I do take are consisting of those A plus trades, then it matters less if I do decide to speculate here and there because my base is covered. Most people get this the opposite way around. Where most of your trades are the random speculative ones, let's say only four out of eight criteria are present. And only every now and then, when their patience allows them to, they take a trade that is actually like level three or an A setup. Because the truth is, these A plus setups, they don't come around very often. And so that's why most people struggle. They know what a good setup looks like. They know what a bad setup looks like. It's just that there are so many more instances of bad setups occurring that, you know, they just get impatient and they jump into the market for what, whatever reason, right? Could be Dopamine. It could be boredom, it could be anything. But the key is like, think of it as a food pyramid. If you base your diet off of fully processed foods, meaning the top of the pyramid, if you treat it as the base, you are going to struggle. Whether it be health or anything else in life, you can apply this. But on the flip side, if you cover your base, it's okay to take a speculative trade every now and then. It's okay to take level two trades or an A class trade or even B setups if you want to. As long as they do not make up the majority of your trades. As long as they do not make up the majority of your trading diet. I think that's the word that I was trying to look for. So hopefully this gives you a little bit more insight as to how to, you know, select your trades. And if you have any questions about this, feel free to just leave it there. I just leave it down below. I'd be happy to help. But remember, trading is a food. Like in your trading diet, a lot of people are doing this the opposite way around. If you're able to do this the right way, guess what? You're already doing something that most people aren't. And it's going to be so easy for you to take the money of the unaware, of the uneducated, which is also the reason why you're here in this video, to educate yourself. So Ned, you don't end up being one of those retail traders that gets their money absolutely washed away from them. Anyways, gonna get back to my cigar. I'll see you guys in the next one. Ciao, ciao.