All language subtitles for 6. the 3 fatal trading sins

much smaller. Now, your
performance discrepancy will be

have no experience in. Make
sure you truly master your

probability setups as possible
and that way the gap between

plays in training because we
have no idea in what sequence

motivated you know you wake up
and you're in the perfect

market conditions are not so
great for your strategy so what

really master your craft so
that wraps up this lesson. Now,

very very quickly because
sometimes you can be insanely

be consistent with your
actions. Don't vary your risk

minimized and lastly, don't get
shiny ball syndrome and you're

your performance and the
strategy performance will be

on each trade. Try to minimize
missing as many high

the main thing that I want you
to take away from this video is

hopping between strategies,
styles, or instruments that you

or order our wins and losses
will occur in. So, you need to

just really understanding the
role that random distribution

you need to do is harness and
use that energy and that

mindset for trading but at the
same time potentially the

motivation to improve your
strategy and your edge and

to your strategy or not and you
need to be able to pick that up

aware of the market conditions
and whether they are conducive

building out of spreadsheet and
you can be really really

things that's what you need to
be doing you need to be very

edge so when you have those
quiet periods that's the

maybe you want to be getting
into stocks commodities

different ethics pairs you know
that is your time to do that

well in you know you can even
be testing new instruments

why don't you just back test
them you know in particular you

now as you move over into the
more professional side of

perfect time and you can start
to be gathering data you can be

refining your edge you know
working out what market

conditions does it work in what
conditions does it not work so

know really busy days or weeks
I don't have that much time to

back test and improve my edge
or potentially develop a new

need to make the suits of your
time and you want to trade well

or your knowledge isn't
currently at where it needs to

be to perform then what can you
be doing in that time well you

market conditions aren't
conducive or maybe your mindset

trying to chase the markets and
losing money so when either

you're tempted to try and do
what they're doing and you

trading that different pair or
trying that strategy that you

know I've never even heard
before and you just end up

these amazing entries maybe on
pairs that you don't even trade

pair or using that strategy
today then I'm going to start

think if this person's making
loads of money trading that

loads of profit but it's been a
quiet week for you so now

or the strategy that you don't
even use and appearing to make

know Instagram Twitter YouTube
and you see people catching

trade especially when you have
a lot of outside influence you

out any short-term drawdown
periods that are natural and

chance of your edge playing out
efficiently and you will ride

may experience in the market
now it can be difficult not to

expected during those more
unfavorable periods that you

missed trades as much as
possible so by doing those

sure that you are minimizing
the amount of high probability

setups that perfect fit your
trade plan and you need to make

profit over time. You still
need to be reviewing your

things that is how you make
sure that you have the highest

trades and making sure that you
are executing high probability

that suddenly your equity curve
will start to rapidly rise in

blindly executing every trade
you think you see in the hope

patience. Now, this doesn't
mean that you should just keep

strategies consistently,
persistently but to also have

designed to explain just how
important it is to trade your

that successful trading is just
not possible. This graph is

and inexperience just ends up
fueling each other's beliefs

complain about a situation
where it meets other beginners

venting on social media and
joining other trading forums to

looks good, Sue turns into
frustration and dismay all over

who are in the exact same
situation and their ignorance

one last try and goes on a hunt
to find another new shiny

strategy that may look
promising. This trader has now

impatient so he decides to give
this whole trading thing just

entered a very dangerous
downward spiral of doom. Starts

giving time for the underlying
edge to play out over a large

enough sample size of trades,
the trader is too annoyed and

experience to execute it
correctly and again, without

they may know. The excitement
of starting a new strategy that

again as the strategy hits a
period of drawdown or more

likely that they just don't
have the required knowledge and

draw down. They then decide
that the strategy clearly must

appears to be working well
lately for other traders that

around the break even mark or
you know they're in a small

not work and just go looking
for another strategy that

some really nice profital
trades, they're still flirting

disheartened and they're really
frustrated that despite banking

how most beginners approach the
markets. They'll start trading

and you must avoid what's known
as style drift. So to

a new strategy and only take a
few trades before they become

become great at anything, you
must be focused and specialize

illustrate that point even
clearer, this is a scenario of

adopting a different style each
time you run into difficulty to

over time, the results will
cancel each other out and

generally, if you stick to a
strategy consistently, then,

that's why the type of strategy
isn't necessarily what's

specific training style will
not perform as well but

but you won't overcome less
favorable phases by just

important but it's the one that
works for you that matters most

enjoy market cycles when your
training style outperforms

other styles and your
experience cycles when your

that's where your processes and
your results will become more

will take off so you know go D
on that and specialize because

predictable, scalable, and
therefore sustainable. You will

of none so don't try to spread
yourself too thin at the

focus on and specialize in is
where that compounding momentum

have to sacrifice the others
identifying what you should

trading if you try to do them
all you're probably going to

surface level to truly reap the
benefits of one strategy you

most likely end up a mediocre
jack of all trades and master

good at scalping day trading
swing trading and position

all trades and master of none
because there is a million ways

you don't know any of them in
true depth so you're a jack of

to make money in the markets
and odds are that you won't be

mastering their current
strategy or the pairs that

where you know you know many
strategies and many pairs but

to trade new pairs or a new
instrument or you know even new

potentially even weeks if
you're more of a swing trader

test it, gather data, refine
their plan, and actually master

when you are an experienced
trader with a specific

is just going to lead to an
extremely scattered approach

beginners who are just starting
out they have a tendency to

the bottom graph. So even
though the strategy ends up

So, remember these two account
equity curves? They would

a part of business and
understanding the true nature

hundred different traders tends
to produce a hundred different

they haven't mastered their
current strategy yet and this

going to happen next she only
finished a month on 2% despite

his risk management and kept
his risk small and consistent

month, that will add up to a
ridiculously large amount of

to something else just because
the market may have shifted or

analytical skill level. The
same strategy one trader

they're already trying to trade
and they're already moving on

but nine times out of 10 they
haven't even come close to

strategies entirely now this
isn't necessarily a bad idea

but market conditions are just
not conducive to the pairs or

this time, you know, beginners
traders they often start trying

conducive for your system. You
know, there could be days or

the instruments that you are
trying to trade. So, during

it. These things all take time
and just cannot be rushed. Even

strategy, market conditions are
not always going to be

don't stick with it long enough
to actually learn the strategy,

trade a certain strategy only
as long as profit. They don't

see it out long enough to see
their edge play out or they

trades and as he doesn't
understand the probability

happens to be a winner and once
again Sam consistently six his

only risks half percent of this
trade out of fear so she only

returns Let's run through some
examples with three different

perfectly follows his rules ex
executes the trade and is also

rewarded 4% for his efforts.
Now the second trade setup ends

it takes a minus 1% loss now
the fourth trade is a pretty

like I was saying when you've
collected more data with your

revisit this plenty of times
throughout your trading career

strike rates or this kind of
slightly lower strike rate but

yeah yeah you know it's just a
probability model and it's just

even but then oh sorry in
decent profit but if you used

need to make sure that you
really are reviewing your

thing you should see as well
even with the 50% edge you can

hands and this can just really
help you to kind of get a bit

and you have an amazing you
know strategy and edge in your

issue for them. Now this is a
very exaggerated example due to

in the sequence of your winners
and losers right now the other

reward and see you know how
they can go and still get away

that you actually collect in
your trade journal from the

you need to ground yourself and
prepare yourself for that

you just drop that down to 4. 1
there you go just about break

profit line forms an equity
curve that presents a massive

spreadsheet useful exercise to
go through and you know look at

with emotional interference
really kind of getting in the

winners and losers and how luck
actually plays a massive role

really a high risk you know a
high reward to risk ratio but

look so yeah have a play around
with it you know see how low

expanded this to another 10,
000 trials it's going to come

taking the exact same trades as
Sam Tom was disciplined with

essentially the exact same
strategy but random

distribution between much
rockier start for the trader on

massive negative repercussion
in the long run because that 10

Sarah's fed up with trying to
second guess the market by

generate by the exact same
profit expectation. So

short-term losing streaks. Now,
the final mistake that so many

you know at some point you're
nearly over 10 grand and then

on a total return of 14% Sarah
who decided to vary her risk on

perfectly follows his rules and
he executes the trade with 1%

setup also ends up being a
losing trade Sam obviously

month so he decides to still
execute the trade and then also

banks 5% instead of 10%. Tom
has now also lost the last two

down as her last two trades
with both losers with high

the most disciplined and
consistent trader he ended up

to your rules and follow your
strategy when you experience

risk and he ends up banking a
4% return. Sarah also sticks to

MC traders make is hopping
between different strategies.

how it is traded. In fact, the
same strategy in the hands of a

profit when it's compounded
month on month, year on year.

trade and he too banks 2% so to
a the month Sam who had who was

to 12% difference between Sam
and the other two traders each

completely underestimate the
true nature of random

profitable and another trader
unprofitable depending on upon

of random distribution will
help you to religiously stick

and so he decides to skip this
trade setup as he just can't

finished the month on just 4%.
So, although all three traders

well in profit after a large
number of trades when amateur

rules follows his strategy
perfectly and banks a 2% trade

4to1 or a 5to1 can be the
difference of whether or not

fearful this time and
thankfully he executes the

of perspective sometimes you
know no matter how experienced

traders experience the second
scenario in the trading their

the previous trade Sarah
starting to feel really angry

little bit more sort of
accurate information here

yeah save a copy play around
with it and make sure you

seeing the previous trade that
he decided to not get involved

each trade depending on how her
emotions were and how she was

he's feeling a little bit
unsure after taking a loss on

If they all have the exact same
strategy and the same

skipping high probability trade
setups is going to have a

and the last trader is Tom. He
keeps his risk fixed at 1% but

at the market and she wants to
make her money back so she

plan by always risking 1% on
every single trade and he

really powerful and definitely
will become very useful as well

doubles her risk again we're
seeing 6% in the trade

up being a losing trade. So Sam
takes a small minus 1% loss.

resulting in a large minus 6%
loss Tom's however you know

in and ended up being a huge
winner Tom decides not to be

you're doing the strategy is
awful you can't make any money

the previous trade but he's
still in a small profit for the

trade setups. Now all three of
these traders all trade the

with the same rules. Now the
first trade setup for the

at 1% but he let the fear of
losing get the better of him

desktop quickly popping open
yeah and just having a quick

missing out on the large return
so the final trade of the month

3percent on this trade. So she
ends up with a painful minus 3%

your edge by you know, varying
your position size risk and

first trade so she decides to
break her rules as she risks

feeling because she thinks that
she you know can predict what's

setup which ended up being a
big winning trade and he

He always sticks to his rules
and he always follows his trade

are very commonly made are
changing position size risk on

breaks her rules by varying her
risk on each individual trade

of the high pobability trade
setups that she sees but she

sizable winning trade as Sam
continues to six his rules and

is rewarded with a 10% winner.
As Sarah is now sitting in draw

causing him to hesitate and
skip a higher poverty trade

each individual trade and
skipping high poverty trade

strategy occurs and it is
actually a winning trade. Sam

goes out the month in the green
in this example, destroying

executes the trade and he takes
a 1% loss. Now the third trade

varying her risk so she finally
decides to just stick to her

he has a bit of a habit
hesitating and skipping some

you are I think it's always
worth you know savings to your

model of the strategy, it takes
a massive hit to his confidence

distribution the first two of
the three fatal mistakes that

trades and make sure that those
losses that you took actually

identifies. The second trader
is Sarah. She also executes all

maybe just click file on the
top left hand corner and click

so as the majority of amateur
traders do not understand and

the sheer number of trades. But
the point is that most

traders. So the first trader is
Sam and he trades consistently.

rules risks 1% of the trade so
she also banks 2% now after

forefront of your mind all the
time right have a score through

punch that into here and then
you can just have this at the

results. Winning streaks and
losing streaks are just simply

spreadsheet this will become
even more kind of later on as

like you really don't know what
you're doing even though you do

thereabouts 1% difference just
how different your equity curve

exact same strategy. They all
have identical trade plans all

better idea of what these three
numbers look like then you can

exact same profit expectations
in an extremely controlled

always executes high quality
trade setups that he

literally have a 1-one risk
reward you have no edge right

you can even go with strike
rate and your you know risk to

to put that down by just 10
pounds right of you can end up

somewhat confident on the back
of his previous win. So he

takes another small minus 1%
hit after taking a big loss in

feeling confident at the start
of the new month so he

testing but also your live
trading data in your journal so

to bring back that down to your
expected yeah your expectancy

yet you have an extremely
extremely profitable edge here

play around with it and you can
be able to edit it. So if for

median looks like you know if
it's around 50%, then you know

sort of more break even so yeah
really really useful tool

that you're you're essentially
trading above the average and

actually deal with that and
accept it and really understand

you've nearly made you know,
1314 grand there like you know

trades and if they were then
that's okay then you know and

that you have here right and
then if you were to do it again

you know sticking to the trade
plan remaining cool you know

with being you know breaking
even or just being slightly in

face the pain from another
potential loss and he ends up

you've collected a lot of data
and obviously the ongoing data

depending if you want to
kind of go for those high

win you win 100 poundsand then
when you lose you lose 100

risk, she's feeling very
skeptical and resentful so she

Sarah was feeling very
confident after winning her

loss just on that one trade.
Now Tom is still feeling

managing their emotions and
they manage to trade through it

a rules. She risks 1% and she
also banks 4% return. Tom is

inevitable kind of losing
streak is probably going to

very likely that you're just
basically you know at the hands

however, you know, they may
experience a much more choppy

start soon right you're
probably going to hit five or

just looked at when they are
placed side by side. Now the

trades that you're executing
and you'll know you have a lot

your own trade plan and you've
done a lot of testing on it

part of your strategy edge and
they were high pobability

that next trade you're going to
start feeling that fear of

execution that fear of loss and
you're probably going to start

video that it didn't kind of
ask you to save your own copy

it you know they really accept
it they're the ones that end up

this in theory and they go yes
yes I get it but when you're in

then higher RR yeah really
spreadsheet I think this is

six losers in a row or you know
a few or at least you know five

you can believe in and trust
your edge and you know it's

complete flip side to that if
you know hitting 1012 winners

here and just look you know
sometimes it's going to feel

or six losers out of the next
nine trades for instance just

the middle of that actually
happening in the markets you

number here and don't put a
negative number of your loss

in a row but you know of what
your edge look like what your

you know I think a lot of
people can kind of understand

you're profitable you know it's
very very fine margins even if

profit because you can see the
slight differences between a

we get later on in the program
when you have obviously devise

it and the people that don't
because the people who do get

way so this is just a really
really kind of useful

essentially so yeah this is a
really really useful

of random distribution at that
point but then likewise the

know with your real money in
the line it's a very very

digging yourself into a massive
drawdown because you know you

now again it doesn't mean that
when you go in losing streaks

the edge starts to play out and
the profit curve really starts

different story you know
between the people who can

that you just keep blindly
executing trades just going

were valid and part of your
trade plan you know they're

this like imagine in that
period right how many trades is

with you know a 50% strike rate
and look at this you can have

when you're flipping that coin
you know you're going to hit 10

setups to show the damage that
this can have in your account

basically assuming that you
withdraw after every single

weeks or you know it depends on
how active you are in the

know not 100% following your
trade plan with zero you know

so just refresh it by putting a
different number and I'll put

reward ratio for now but let's
say you had you know even

that you know 21 trades and
you've literally just won you

markets you're going to feel
like you don't even know what

going to start doubting and
questioning your ability you're

look at this right you go
nowhere you break even for what

making mistakes and you're
probably going to start you

than 51, but it kind of just
shows you you know there or

right you've got a 50% strike
rate right ignore the risk

of any trial involving chance
are distributed randomly. So

you know 10 consecutive losses
in a row so although you make

right three to one definitely
more than achievable especially

over time it shouldn't out and
break even yeah look at this

should say is the strike rate
the average win and the average

smashing over half a million
over 5, 000 trades, and

surprising thing here is that
both of these equity curves

trade right be hit ten losers
in a row now if you're on the

slightly into negative
territory and it floats around

randomly assigns numbers to
those trades so the three

know three trades so this could
be played out over a number of

just like all of the downloads
you can make a copy and save

have 12 consecutive wins in a
row in the sequence and you

can look like even though
that's a pretty much the edge

know 10 consecutive losers so
at some point in here you know

on their account equity curve
that gradually moves from the

columns that you have to play
to work with the three rows I

tails in a row now imagine
that's you when you're trading

remember this is without
compounding right so it would

let's put in not even the high
let's just put in really simple

because if you look at this
kind of you know equity curve

toss experiment let's say you
have a 50% edge and when you

to be about you know 23000
trades and then boom you're off

nought. 1% across 5, 000 trades
can make quite a sizable

going to start doubting and
questioning your strategy

kind of how you know the just a
true random distribution of of

is where the strike rate is
actually quite a bit higher

let me just change this again
back to 50% and let's see what

in 50 again you can see look at
this right this is a 5050 edge

right you win as much as you
will lose on your losers and

it just kind of shows you you
know the the real kind of and

back down eventually to zero
pounds so that just shows you

you're probably going to start
struggling you know to to take

charts right and you hit ten
losers in a row I'm sure you're

make a copy then you can save
it down to your own drive so

of these numbers down here you
know just in a random way but

yeah essentially how this
spreadsheet works it's very

looks completely different like
this is kind of a perfect

yeah and then you get another
one right so imagine you you

of the wheel for an edge to
play out too. Now, some

essentially then distributes
your wins and losses across all

out is random and that not be
predicted either with any

bit more information so it
tells you what the actual true

distributed randomly such as
the underlying edge, right? So,

be a **** time more of those
compounding in here but this is

loss so let's start out with
the you know a standard coin

yeah as you can see strike
rates 50% so what it does it

very similar to the one from
the coin toss the coin toss

difference to your equity curve
so it's just why you've got a

or minus 1% but a very slight
difference you know even just

example actually of just what's
popped up here of I mean this

add up. 60% of 10 trades should
mean six winners right? So why

module and essentially you have
5, 000 trades this time and it

would hold true but in the real
world, however, this is simply

of a coin flip you know you win
it's a one to one risk reward

chance are not perfectly and
evenly distributed. They are

based on that edge there now
over here it gives you a little

an absolute fortune right with
this edge and you know you're

the exact number that you put
here it's usually within plus

the expected result of the
strategy will play out over

experiment spreadsheet to make
sure that you put in a positive

way results are perfectly and
evenly distributed. This theory

this is the probability
calculator that I've built and

it comes all the way back down
again now there's you know we

strike rate is of those 5, 000
numbers and it's very rarely

experience a lot of losing
trades before their profitable

the exact same strike rate and
the same reward to risk ratios

spreadsheet from the what is an
edge lesson earlier in the

bottom left to the top right
with their total profit pretty

for both accounts. The profit
curves are generated from the

pounds so yeah just remember
again like the coin toss

let's take a quick look at that
probability calculator. Okay so

reached out to me for help you
know when they have a good

differences between the two
account equity curves when we

edge really starts to play out.
Now you can clearly see the

the edge is so slight like in a
casino it might take 200 spins

were produced from a
probability calculator that had

much remaining in the green
from the very start of their

account equity curve that can
track sideways and even be in

the break even marked for a
short while before eventually

to take off and then the big
money is earned. Other traders

traders, they might end up
having a relatively smooth ride

start during the first run of
trades as they just dip

haven't I won six? Well, in a
perfect world, you know, one

10th trade you know most
beginners was reasonably

time. The timing which it takes
for the underlying edge to play

missed in that time period and
a really common theme that

the red for quite a while at
the start in they can

work right? Because with a 60%
strike rate strategy by the

profitable trades now all three
of these mistakes are

aren't showing we naturally
begin to ask questions. It is

successful trading where luck
actually plays a role. So

questions was that they had
taken a very low amount of

really nice profit who
potentially even trade a

just because the the
spreadsheet will not work so

tracked any missed trading
setups in that time period

trades. Sometimes in the first
20 trades. In situations where

this down to your own drive so
that you can keep it for life,

of just strictly sticking to 1%
risk per trade continuously. So

against our very nature to keep
doing something that doesn't

analysis right they've got good
skills but they're confused as

when they commit to these
mistakes so whenever trader has

whatever reason when you
clicked the link below this

trades you know usually less
than 10 and they had not

to why they're not consistently
making money I will ask them

how long have they been trading
that strategy how many trades

environment. This just goes to
show true nature of how results

account activity and they need
to keep a little faith at the

the second fatal mistake they
make is skipping high

degree of usable accuracy. So
this is the only area of

not the case. Results of any
experiment or trial involving

became very clear very quickly
after asking them these

profitable strategy actually
working in their favor you know

completely different strategy
and then what does that do that

strategy but by the time they
do so generally the market

and they see social traders you
know appearing to bank some

them to maybe hesitate or
develop a fear of execution.

unfortunately so common among
uneducated losing traders and

strategy they know what they're
doing with the technical

strategies. So an amateur
trader may experience some draw

sometimes your edge will play
out you know in the first few

taking a trade if the pain from
recent losing trades has caused

expected to have won six times.
You know the numbers seem to

to imbalance perceptions in a
really emotional reactive and

either. See almost everyone has
disciplined to stick to the

probability trade setups. So
you know the classic cycle of

going to happen next so they
decide to risk 3% on it instead

it just completely screws up
the probability model of a

rules you know five or six
times but eventually if results

have they taken and how many
valid trading setups have you

actually suited their initial
strategy and then they end up

conditions have then flipped
back to an environment that

that often leads new traders to
make the following three fatal

And then the third and final
mistake is hopping between

mistakes that completely
destroys their rage in the

corrective market conditions
then maybe they go on Instagram

to make money and I do think
it's the failure to truly

They feel overcertain because
they think they know what's

you know they start to have a
really good feeling about it.

amateur trader can adopt is
trying to predict when they

fear and greed can cause
traders to potentially skip

on each trade. So this is where
traders pick and choose

is just going to lead to
frustration caused by that

gives them some FOMO and then
they switch over to another

market. So the first of those
is changing position size risk

different levels of risk on
individual trades. So they

missing out on what would have
been a series of highly

understand and grasp the key
concept of random distribution

that impulsive primitive
behavior time and time again I

down you know during
potentially choppy and

see traders you know they have
a decent they still can't seem

be now one of the most
unproductive habits that an

might risk 1percent on one
trade then on the next trade

think their winning trade
should occur and this obviously

knows a sequence of what their
winning and losing trades will

when winning and losing trades
are likely occur so the random

and ultimately lose money in
the market. So, in trading,

expectation discrepancy and
then that frustration can lead

we'll talk about random
distribution in reference to

and losing trades are likely to
occur. So, essentially, the

part of why so many amateur
traders, they lose confidence

lack of understanding in this
very concept is a significant

distribution of winners and
losers because noone on earth

sequences of our wins and our
losses and I believe that a

random distribution is the
random order in which winning

and see the outcome of
different strategies depending

that's going to help you to
think in terms of probabilities

on both their strike rate and
reward to risk ratios which

will go through during the
lesson together so the final

is a probability calculator
that is a really powerful tool

piece of the puzzle to truly
understand ability and

profitability in trading is
random distribution. Now,

you go so there will be a link
in the notes below the video

hesitant to use the word cool
to describe a spreadsheet but I

and they understand it. They
have sound technical analysis

that they have. There's also a
really cool spreadsheet. Well,

like spreadsheets and I think
it's pretty cool so yeah there

traders make that just
completely destroys their edge

for you to download your own
copy of the spreadsheet which

I've narrowed it down to these
three fatal mistakes that these

skills but yet they're still
not consistently profitable and

people over the years who are
actually in command of an

In this lesson, we're going to
go through some practical

extremely profitable trading
strategy. You know, they know

trading examples and we're
going to use these examples to

really dig deep into the
reasons why I've seen so many

strategy because that is where
the freedom lies.