IT Will Make You An ALPHA Trader

         

 Hello and welcome.

Today I’m sharing my trading experience, what trading is all about, some of its complexities and how your approach should be when day trading. Technical indicators are inherently lagging so they cannot be relied upon on their own. Most new traders start with indicators. That’s the first step in day trading. In my first 2 years in trading, price action didn’t matter to me because I was relying on a random set of lagging indicators to make decisions for me. The truth is I was being lazy, hoping that I’d stumble across some magical combination of indicators that would make me wealthy. I was just making decisions because a few dots and lines said it was time to buy or sell. But to rely 100% on them without first learning how to read price action is a major mistake. Don’t get me wrong. I’m not saying all indicators are bad or that traders who use them are wrong to do so I also use trading indicators, but price action comes first. Before you apply any indicator to the chart, you first need to understand price action. Even If you feel that indicators are the way to go, that’s okay. Just be sure to spend some time learning how to read price action It’ll help you in the long run even if you decide to use an indicator-based strategy. If a trade doesn’t let you sleep, you are not trading correctly A simple rule you should apply is to think about your sleep. If you are able to place a trade, set the appropriate stop loss and take profit orders in your platform, and then go to sleep, this is the trade size that fits your risk profile. If, however, when you place a trade you find it difficult to sleep, you find that you are always thinking about the trade while away from your computer, that you feel the urge to constantly check your smartphone, then the trade is too big. That’s a common mistake. When people are new to trading, they tend to feel pressure throughout the day and especially when a trade is open. You need to reduce your trading to the sleeping point, the point at which you can place a trade, accept the risk, and have a peaceful state of mind. Although trading risk is important, your emotional and mental health risks are more important. The first and most important way to control stress levels with regards to trading, is  to control your position size You will find yourself remarkably less stressed if you keep your percentage at risk on each trade lower. Always watch more than one time-frame. Day trading is considered a riskier alternative to the more traditional investing or  swing trading. When trading short timeframes, it is not enough to simply analyze one time frame. Sometimes there is very little time to catch the perfect moment to enter and if you are late even a little bit, you won’t be able to take advantage of the price movement. If you see a good trade on an M15 chart, see how it looks on the hourly chart and H4 too. Sometimes an opportunity may be less obvious on a smaller chart timeframe and more obvious Sometimes a move on a 10-minute chart can look so scary; but when you step back, it’s very minor when viewed on a daily time frame. Evaluating a market on different timeframes will help confirm a trend and make a better informed decisions. Never make a trade, change your mind for little to no reason and take it off Here’s a familiar experience. You analyze a chart for some time, you see a decent trade, you pull the trigger, confident that your analysis will pay off, and after 5 minutes, when you’re down a few points, you close your position. When day trading, emotions will come from market noises coming your way. Whether markets are in an uptrend or downtrend, you will witness a lot of noise. And noise can impact your trading strategy and decisions. So, you must filter it to keep your emotions under control. The lesson is to always give your trades enough time to come good. If you often engage in emotional exits, this will only destroy your confidence and eat into your profits This doesn’t mean you can’t change your mind when new information comes in. If a support level is broken for example, or a huge pin bar forms on high volume. This should all be considered in your plan. Always question yourself as to whether your decisions are emotionally driven or are backed by technicals or fundamentals. Learn all you can about the Kelly Formula. This is the mathematical answer to how much you should risk on a trade. The reality is that even a wildly profitable system will go bust if your risk is too big. The Kelly criterion is an advanced money management tool that helps you work out how much money you can risk on each new trading position, based on how well you have done with similar trades in the past. Calculating the Kelly criterion is relatively simple and relies on two basic components: your trading strategy's win percentage probability and its win to loss ratio. These will help you arrive at a number called the Kelly percentage. This gives you a guide to what percentage of your trading account is the maximum amount you should risk on any given trade. Kelly formula is probably the best money management tool for judging position sizes and risk tolerance in trading. You don’t need to trade. If the market is quiet or behaving strangely, just wait it out. If you find yourself jumping into low conviction trades because you can’t find anything better, the most likely reason is that you need to do more work. Spend less time looking at charts and more time researching, reading, back testing and analyzing. If you take more trades than your strategy dictates, that’s a warning sign.This is often a result of boredom or lack of discipline.Since these trades occur outside of your trading plan, they are less likely to perform well. So trade what your strategy dictates.If the market is quiet or the trade entry conditions are not there, just wait out. A new opportunity always comes along. You only need a few big trades to have a green week. Learn to plan and structure every trade so that you know what to do in any eventuality.You need to make a specific plan regarding when you’ll enter and exit a trade.Decide which signals will be your green light to enter.Consider what you’ll do if a trade starts going against you.            What’s your stop loss? When will you get out if things don’t go your way? How much of your portfolio should you risk on one trade?What you’ll do if the market doesn’t move and you’re stuck in the trade. What you’ll do when you’re in profit? You need to plan and structure every trade so that you know what to do in any scenario. Your trading plan should be complicated enough to be effective, but simple enough to make snap decisions. If you have 20 conditions that must be met and many are subjective, you will find it difficult (if not impossible) to actually make trades.More hours does not mean more profit. Sitting in front of a screen for many hours can lead to diminishing returns and burnout. Sitting in front of a computer screen all day, watching the price action, might sound like fun, but I have found it can also be a detriment to my performance. There is no another job in the world that will take money from you by trading your time. You can make thousands of dollars in a few seconds. But you can also trade for 7 hours and lose a lot of capital. The market doesn’t care how much time you are trading for. Day trading is often chaotic and full of stress. It’s so easy to lose your ability to concentrate.You can be highly motivated to day trade and have a decent strategy, but if you lack concentration, you’ll have big problems. When day trading, it’s essential that you learn to concentrate while executing a trade and monitor the market action during a trade. It’s useful to remember that concentration takes psychological energy and your energy has its limits. If you want to maintain your focus, you must be rested and relaxed. Four hours of concentrated trading or research is usually the limit for most people. Don’t overdo it. More hours does not mean more profit. Value your time.You don’t have to spend all day trading. Don’t quit your job to become a full time trader. Don’t start with the intention of trading for regular income.                                                                                                         

 Day trading is not something that should be taken lightly. It takes years of building up knowledge and experience I get triggered when I see influencers on different platforms telling people to quit their jobs to day trade stocks or crypto, showing off their expensive cars and luxurious life style. You can’t simply walk out of your day job to start trading. There are many traders that are successful and have full-time jobs. Remember, in trading, you do not have a set salary. The market owes you nothing, your winning strategy might stop working in a year. And your mistakes have big consequences in trading. You don’t know how much money you will make or lose before any given trading day. This is the most important piece of advice I can give to 9-5 traders. Do NOT give up your primary source of income. In general, you don’t want to lose streams of income. The more streams of income you have, the more stability you have. Better income stability will allow you to trade better, as you view the market with less emotional attachment to money! Keep your job as long as you can while you build up your trading skill-set. Don’t rush the process. Don’t believe anything you read until you have tested and tried it out for yourself. What used to work ten years ago, on a certain market, may not work today. A strategy I use on the H4 time frame on Tesla may not work for you on a 5-min chart of Bitcoin. That’s a common mistake amongst new traders. They don’t understand that different strategies work on different markets. You only find out what works for you by rigorous testing and analysis.Back testing is the most under-utilized weapon in trading. Many traders find it to be boring, difficult, and even pointless. But back testing allows you to witness how your plan would have theoretically performed had you been trading it for the past months. With this information you can objectively confirm whether or not your trading plan will make you money. Backtesting is like a mirror to reality. You might have the best trading idea, but if you backtest it over the past few months and it’s not profitable, chances are this strategy isn’t going to suddenly start working now. Likewise if you come up with a clever idea that you think probably doesn’t work, you may surprise yourself to discover through your back testing that it in fact does work. Of course, the past is never an indication of the future, or at least not a consistently reliable one. But without back testing you are essentially trading blind. 

have a god day🌹.