Original subtitles

win, a small loss, or a break even. You should never ever

have access to a lot of capital right now and that's okay. Be

time should be on you becoming the asset yourself. You may not

it's a certainty like it's it's guarantee is no way around it.

it is that you'll experience a large string of losses and

pushing near 70% you will still be at risk of stringing

that it's almost a guaranteed certainty that you will

because you are merely left with much less money in your

so your strike rate is just another way of saying your win

and if you are only risking 1% per trade it's extremely

psychological impacts of those draw downs and that can be a

very vicious cycle that is extremely hard to climb out of.

account but you also have to deal with the negative

first but as the drawdown percentage increases it becomes

started. When you risk too much and lose, your chances to

this small difference could appear pretty nudgeable at

become far more difficult here is a table showing the drawdown

balance of $9900 if you make a profit of 1% you will now only

ever harder to recover losses 10 to 20% draw down can be

and you take a full loss of 1% so that you lose 100 pounds

you have no problem getting funding because remember

experience a big loss. If you can get rid of big losses, you

will no doubt take thousands of trades and all of those

table clearly shows how important the difference that

that you are worthy to handle and manage that larger capital

have a great chance of being profitable for years to come.

within a 1, 000 trade sequence depending on your strike rate

It's just a mathematical concernty. Now hitting eight

trading for the long term over the course of your career you

drawdown then you have no problem finding a big investors

rate so let's say you're actually a pretty good trader

right and even if your strike rate is very very good and

loses in a row has a 50% probability so the same chances

extremely high. It's a near certainty. You can blow your

probability of you losing a number of consecutive trades

risk that much capital on a trade and your risk of ruin is

to the best of traders anything can happen in the markets

priority over optimization of profit. A bulletproof risk

you are a more experienced trader who is relatively

generate an income from that capital and then in turn,

that is you. When you are yet to reach consistency, there's

almost 40% just to get back to break even. This is insane. Do

your training journey, the golden rule will be your main

do you think would happen just a single blow would cause it to

so having what you may consider to be a small account it's no

that's only just in a 1, 000 trade sequence. If you are in

the primary reason that we cap our losses at 1% because if

if the sub was attacked again by an enemy ship now what do

investors care more about draw down and potential loss than

referred to as being in a 1% drawdown. At this new account

recover your capital fully are very very sin and it's not only

and you've got a strike rate of around 60% this table shows

excuse whatsoever to risk more than 1% because if you can

those solid foundation now with tight risk management

quite easily recovered but beyond this level it starts to

trading. You have to take it very seriously and be extremely

model it forces your risk to progressively get smaller and

would experience some extended losing streaks until you gain

anything so make sure you respect that and keep your risk

break even from where the drawdown started so if you

together six to seven loses in a row at some point it happens

risking only 1% per trade will make because it's extremely

trade you've now lost around a quarter of your account and if

entire account within a month with relative ease. And even if

surprise and humble you because here's a table that shows a

take. So, when you're first starting out in trading, you

losing trades and this is calculated by the difference

reason. As I said before, the market will never fail to

probabilities in that table will then shift along to the

dividing your account into 100 equal positions and accept a

infinite capital and infinite market equity that theory may

trades in a row at let's say 5 percent risk. You've got to

dice one last time and they double their risk at 16% and

time that you will experience a string of losses for whatever

hold water but in the real world it's pure fantasy and a

your trading account just like the submarine, right? By

Uh you know, I really can't emphasize enough at just how

ensures that your account harnesses the power of

assumed all of that massive risk well on the way to nearly

doubling their risk to 8% losing again and putting them

trade and they're now risking 4% but they lose three trades

account depending on the level of risk that you choose to

occurrence while training, all measures should be taken to

trending conditions you know some amateurs think that

your account. You can clearly see that this is how you remain

then your account will fall to 9, 900 pounds. This is also

of losing trades your losses will progressively get smaller

you're in a situation where you lose 50% of your account, you

make ninety-nine pounds. So this only brings the account

take hit after hit before sinking and giving it enough

is to never risk more than 1% of your trading account per

disciplined, right? You have to be professional and here's a

you'll be able to do it on a large account you have to prove

likely you know at some point in time you will lose five or

table that shows what effect a losing streak can have on your

experience a drawdown of five or 10% you pretty much just

six trades in a row which is completely normal by the way

that happens you will now have to put out a huge return of

fill up and sink immediately right now take that same

have to double your money just to get back to where you

of that submarine have been completely hollowed out so now

back up to nine thousand nine hundred and 99 pounds. Your one

have to make five or 10% back but once you start to lose over

20% of your account you are really to tread in deep water.

you think would happen this time only one of the

dedicated to highlighting the various risks that you are

make nearly 50% just to get back to break even. Anything

back in the game and making new account highs once again all of

that sub was then attacked by a missile from an enemy ship what

mathematically harder than making the loss in the first

flipping aheads or tails in a coin toss. If you lost seven

place. So, If you were to start with a 10, 000 pound account

versus the profit recovery rate required just to get back to

build a track record with small consistent profits with minimal

Small, regular profits are key. Remember, your focus the whole

highs may be achieved once again. Right, I want you to

principles and if you can do it now on a small account then

consistent, it is still almost a certainty at some point in

expected even with a high win rate but now they're down minus

in the road so you only need a couple of winners to get you

it to reach that consistency. And that golden rule is what is

management principles in place so you can survive those bumps

your trade should end in one of four ways. A small win, a big

lower than a 60% strike rate and you can see just how likely

The more you lose, the harder it is to recover and this is

false belief that they'll get away with never fully realising

sure way to blow your entire account. In the early stages of

not trade like this. You can clearly see how absurd it is to

by keeping the risk portrayed to 1% or less of your account

going to protect you in the meantime. So, draw down is

in a huge hole of minus 15% to climb out of. So they rather

people don't realize is that recovering a loss is

carefully. Ready to play? Now, those are not my words, those

most efficient way possible by teaching you exactly how we

essentially the reduction of your capital after a series of

experience at least six if not seven losing trades in a row

manageable to get back out of that draw down in just a few

keep it as small as possible and the best way to do this is

some more experience within the markets over time and it's

between a relative peak in capital minus a relative

trade to try and make it back and more but then if they lose

and they decide to double down their risk again on the third

trades and make back that 5 or 6% but if you've risked 5% per

strategy. Even the best trading strategy in the world can

wrong. In speculative trading, protection of capital takes

know, it's pretty much an absolute certainty that you

That is obviously not smart trading because their risk far

think of a submarine and now imagine that the internal rooms

important risk management is for your long-term success in

trough. Now, although account drawdown is a very normal

and the reason that this is so important and what a lot of

what is the golden rule in trading well a major major key

portrayed, but you can clearly see that it's only going to

and in the unlikely event that you manage to lose 10 trades in

compartments would fill up and leaving the other ninety-nine

pound sure even though you lost 1% and you made back one now

going to be underwater very quickly. Others might be a

to 1% of your account, you increase the probability of

the course of your trading career not only does a 1% risk

encourages traders to double their risk after each

many cases, unethical minds in the world. You're up against

it is essentially just one big giant hollow floating tube if

actually maintaining that success over the long term so

blowing up their account just to make one percent profit.

maximum loss of just one compartment at a time. And this

the best trader that you can be with what you have now. Build

take a few hits to their account and suddenly they're

outweighs the reward every time. Now gamblers love systems

you saw how consistent profits become progressively larger as

called a reverse compounding effect in the previous lessons

compounding on the way up whilst also taking advantage of

seven percent. But they continue the gambling system

way of avoiding risk because you are eliminating the risk

positions, and how we manage risk. So your learning curve is

rapidly shrunk but you'll still have to work extremely hard at

in the game for the long term so you can survive the

down so during periods of account drawdown that 1% risk

exactly the opposite systems such as the it actually

going to be a learning gap. I'm here to fill that gap in the

model actually preserve your capital but during a series of

therefore of not only becoming a successful trader but

they finally get the massive winner that they were after.

a loss. Potentially in you know a hypothetical environment of

losses the monetary risk on each trade that actually

little bit more prudent and think that 5% risk portrayed is

they're being sensible by risk managing by only risking 10%

But look, their total PNL is now only 1% profit. So they

instead of learning their lesson they think they're smart

trade, how to apply our strategies, and how we manage

like the Martin Gale because it allows them to buy into the

they lose that trade they then decide to risk 2% on the next

consecutive loss so if they risk 1% on the trade but then

becomes progressively smaller and smaller and it forms what's

that second trade at 2% risk they're now down 3% overall so

so the simple act of risking a fixed percentage portrayed it

inevitable run of losses that you will string together over

long enough to then enjoy the calm blue waters of profitable

survive another day, right? So with this anecdote, think of

the reverse compounding effect during those periods of draw

survival technique is critical in keeping your account alive

okay but look at the protection that 1% risk portrayed does for

submarine but this time build strong dividers so that it now

smaller sounds pretty logical right yet most traders do

a result of compounding but the inverse is also during periods

trade never risk more than 1% of your trading account balance

per trade. Why? Well, by capping the risk on each trade

like this can be made back with just one trade and new account

contains 100 water tight compartments all in equal size

trades. So, if your focus is to protect the money in your

attacks to keep the submarine afloat. So the submarine could

making quick and easy money behind. The first aim is

begin the risk management module with. Because As you may

in a row which is perfectly normal by the way and even

possibly said it better myself, and it's a very apt way to

a row at a capped 1% risk per trade, you still have more than

capping the risk to 1% on each trade, you're essentially

90% of your initial balance left to trade with. Draw downs

conducive to your strategy again and this module is

increase the probability of protecting your capital and

time to escape enemy fire and return to safety and live to

your survival during those unfavorable market conditions

likely to face as a trader and by implementing the risk

money due to their lack of respect for risk management.

you're playing with some of the sharpest, fastest, most

corrective price action can result in a series of losing

management principles we're about to cover you will

individual strategies and there are times when choppy

they're not always going to be optimal 100% of the time for

make sure you do not become a part of that 9090 rule like the

account during those chopping market conditions, then you're

you can survive to fight another day. Capital will keep

are brilliant technical analysis but they still lose

your first priority. Because if you still have capital, then

going to remain afloat to rebound from these losses and

then make new account highs once the conditions become more

make from this trade? But potential profits are

the computer that can react fast than you, the trader who

seductive. The first question a professional trader asks is

by understanding how the enemy thinks and acts, by having a

always, how much money can I lose on this trade? So your

eventually put up your account if it is not integrated strict

first and foremost is actually one of a professional risk

money management principles. So when new traders enter a trade,

manager. This is the concept that many continue to get

are the words of an infamous trader called Tom Dante, who

I'm not entirely sure how accurate is but as it goes, it

three objectives as a trader are to conserve capital,

you in the game. Now, I've known a number of traders who

The market will always humble you. In market conditions,

management regime is paramount to any successful trading

increase your account size. Protecting your capital must be

management principles that have stood the test of time and will

statistic that loves to get thrown around which you know,

masses. So although you are a financial trader, your job

any risk management combined with the abuse of leverage,

period. So, I'm going to teach you sound professional risk

capital in the first 90 days of them opening an account. Now,

their primary thought is often, you know, how much money can I

says that roughly 90% of retail traders lose 90% of their

the number one reason that this occurs is due to the absence of

have probably heard already, you know, there's an infamous

some of you may have heard of, and I don't think I could have

survival. Your absolute first goal is to learn how to stay in

solid game plan, and by picking your battles very, very

has more experience than you, the fun that has more money

others that will misinform you and the inner voice that will

do its best to undo you. So, leave all of your dreams of

than you, the insider that has more information than you, the

the game and you can only do this by mapping the territory,

intelligent, well-informed, stubbornly irrational, and in

Welcome to the hardest game in the world. Unfortunately,

the upside potential return