Common Mistake: Many traders focus on low risk-to-reward ratios and high win rates instead of maximizing their winning trades.
Learning Process: Expect to experience losses while learning; the key is to ensure that winning trades are substantial enough to offset losses.
Personal Experience
Initial Struggles: The speaker reflects on their early trading experience with My Forex Funds, emphasizing late nights of studying and refining strategies.
Misleading Advice: Following the advice of taking lower risk-to-reward wins was considered the worst advice received, particularly in prop trading.
Discovery of Strategy: After identifying a mechanical method to hold winning positions longer, significant payouts resulted.
Importance of Holding Winners
Maximizing Opportunities: Traders must capitalize on significant market opportunities when they arise.
Mental Resilience: Having big wins can buffer losses and reduce the fear of taking risks, allowing for a more abundant mindset.
Leaky Bucket Analogy
Visualizing Trading Performance: Traders are compared to a leaky bucket, where losses drain profits. The focus should be on fixing the strategy rather than continuously seeking new strategies.
80/20 Principle: Identify the most impactful change to prioritize - in this case, holding winning trades longer.
Buffer Effect
Impact of Bigger Wins: Larger winning trades provide a buffer against losses, improving overall trading performance and mental clarity.
Reduced Trading Stress: A focus on fewer, high-quality trades rather than many small trades alleviates pressure.
Price Waiting Strategy
Mechanics of the Strategy:
Enter trades at key levels and wait for the market to move in your favor.
Trail stops to one candle prior to significant market movements, allowing for extended holding periods without sacrificing profits.
Practical Examples
Risk-Reward Comparison:
Standard approach (2R at 50% win rate) yields around 50R.
Using the new approach (3.2R at the same win rate) can yield 110R, illustrating the power of holding trades longer.
Conclusion
Strategy Implementation: Apply the price waiting strategy to enhance profitability, especially in volatile markets such as NASDAQ.
Avoid Excessive Risk: While holding trades longer can be beneficial, it's crucial to manage risks accordingly.
Ongoing Learning: Continuous self-reflection and data analysis are essential for refining trading strategies.
Call to Action
Subscribe for More Content: The speaker encourages viewers to subscribe for additional trading tips and strategies.
Direct Guidance: An invitation to learn with the speaker in a funded trader program for more personalized mentorship.