Here are some common trading axioms, that are (imo) totally misguided and wrong.
1. Financial Markets, are a battle between Bulls & Bears. Buyers and Sellers
- Financial Markets are a parasite, dominated by entities in control of both sides of the order book, who move the markets around looking to extract as much value from other market participants (and society at large) as possible.
2. Traders should always aim for 2:1 risk reward in their trades. That way, you can be wrong 50% of the time and still make money.
- Markets fucking hate 2:1 rr. If the market gives u 2:1 RR, it is cos it is going much higher, or cos it grinded out several 1:1 trades before eventually getting to 2:1 Most traders would be better off either aiming for 1:1 RR (or less) and being right the vast majority of the time, or aiming for crazy ratios like 10:1 (and above), and live with being constantly wrong, but getting paid out big time, when right.
3. Traders should place their SL behind logical structure. Thus if the SL gets hit, this proves the trader was wrong, and the market is likely to keep going much further against their position.
- Most recognised trading patterns that set up comfortably for the trader to take a position, are fated to fail, with the logical Stop Loss level becoming an actual market target. This is why no matter how well u follow the rules of engagement, based on a bunch of cherry picked examples that your educator taught to you, the market always seem to know where you entered and where your SL is. Dumb Money Historical SL levels tend to become future Market Supply & Demand zones.
4. Once in a trade, the trader should simply leave their position alone and allow it to work.
- The Market is flashing signals to entice traders to enter all the time, most of which are traps. If enough traders take the bait, then their SL levels become the target for the price action. First sign that the market isn't respecting your level, GTFO and reassess. Chances are your entry will become new market resistance at least until the point where the logical SL framing your trade is Rinsed. This will involve utilising a SL well away from the all the action.
5. A Trader should have clearly defined trading rules. An algorithmic system that tells him if enough factors line up, then he must take a position.
- Training the mind to think mechanically about the markets, will only hamstring and limit the trader. Intuition plays a huge role in whether a trader is effective in the markets or not. In a market dominated by algos that cost tens of millions to develop, the only edge a human trader can possibly have, is an edge that cannot be replicated by algos or AI. Markets are not explained by the power of some candle pattern, Fibonacci level, or momentum divergence. They are explained by the hunt for liquidity. Every Bear M or Bull W that the candles paint, is simply a liquidity pool in waiting to be harvest some time down the line.
Whose got any more?
1. Financial Markets, are a battle between Bulls & Bears. Buyers and Sellers
- Financial Markets are a parasite, dominated by entities in control of both sides of the order book, who move the markets around looking to extract as much value from other market participants (and society at large) as possible.
2. Traders should always aim for 2:1 risk reward in their trades. That way, you can be wrong 50% of the time and still make money.
- Markets fucking hate 2:1 rr. If the market gives u 2:1 RR, it is cos it is going much higher, or cos it grinded out several 1:1 trades before eventually getting to 2:1 Most traders would be better off either aiming for 1:1 RR (or less) and being right the vast majority of the time, or aiming for crazy ratios like 10:1 (and above), and live with being constantly wrong, but getting paid out big time, when right.
3. Traders should place their SL behind logical structure. Thus if the SL gets hit, this proves the trader was wrong, and the market is likely to keep going much further against their position.
- Most recognised trading patterns that set up comfortably for the trader to take a position, are fated to fail, with the logical Stop Loss level becoming an actual market target. This is why no matter how well u follow the rules of engagement, based on a bunch of cherry picked examples that your educator taught to you, the market always seem to know where you entered and where your SL is. Dumb Money Historical SL levels tend to become future Market Supply & Demand zones.
4. Once in a trade, the trader should simply leave their position alone and allow it to work.
- The Market is flashing signals to entice traders to enter all the time, most of which are traps. If enough traders take the bait, then their SL levels become the target for the price action. First sign that the market isn't respecting your level, GTFO and reassess. Chances are your entry will become new market resistance at least until the point where the logical SL framing your trade is Rinsed. This will involve utilising a SL well away from the all the action.
5. A Trader should have clearly defined trading rules. An algorithmic system that tells him if enough factors line up, then he must take a position.
- Training the mind to think mechanically about the markets, will only hamstring and limit the trader. Intuition plays a huge role in whether a trader is effective in the markets or not. In a market dominated by algos that cost tens of millions to develop, the only edge a human trader can possibly have, is an edge that cannot be replicated by algos or AI. Markets are not explained by the power of some candle pattern, Fibonacci level, or momentum divergence. They are explained by the hunt for liquidity. Every Bear M or Bull W that the candles paint, is simply a liquidity pool in waiting to be harvest some time down the line.
Whose got any more?
