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5 Trading Myths Which Fooled 90% Of Traders (Did You Fall For Any Of It?)

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5 Trading Myths Which Fooled 90% Of Traders (Did You Fall For Any Of It?)

Hey hey what’s up my friend so in today’s episode I’ll share with you five five trading myths that has full almost right all new traders so myth number one right you probably hear something like this oh if you just trade one stand a lot and you make 20 pips a day right you can make a full-time income from trading right that’s about four thousand dollars a month right just need to make 20 pips a day right euro dollar it moves an average of a hundred pips or can’t you just you know take 20 pips out of the market all you need is 20 pips one lot and that’s four grand a month in the bank now what’s the problem with the statement with that idea being presented to you I’ll tell you I’ll tell you what it is so yes on average right most currency pairs they move more than 20 pips a day right sound maybe eighty hundred hundred fifty peeps depending on the volatility of the market and it might seem plausible right if a market moves like you know 100 people a day all I’m asking is 20 pips alright if I make 20 pips on a one stand a lot there’s about $200 a day multiplied by five trading is a weakness a thousand dollars for weeks and a month is about four thousand dollars but the problem with that statement is assuming the market doesn’t change assuming that your trading strategy will continue working but here’s the thing when if you look at a chart and the chat is always in an uptrend when if you look at a chart and the chart is always in a downtrend whenever you look at a market that is always in a range one thing that you can agree on is that the market is always changing and for you to make profit every single day for you to make 20 pips every day for you to make money every day is assuming then the market doesn’t changing that’s how your trading strategy can make money consistently every day 20 pips every day is that realistic the answer is no market always change and when markets change your trading strategy stopped working and that’s where you have to adapt to different market conditions and how fast you a damn right will determine right how deep of a drawdown and you go if you adapt slowly then clearly right you will suffer the patronum if you adapt quickly then your drawdown will be much or make sense so don’t fall for this you know just make 20 people a day one lot you can make a full time income from trading that’s okay number two this is a very common one the market trends 30% of the time you probably you know heard that that’s alright oh the market is trending 20% of the time right it’s in a range more than half the time so I was actually you know I thought that was actually true I bought into this as well until I did my own test right again this was a test an idea that I learned from Andre Unger he’s a woke up trading champion he said that different markets have different characteristics some trend better and some have a mean reverting behavior so one very simple test then you can do is again it’s his idea he said that every time the market breaks out of the previous day hi you buy one law and when it hits the previous day lo you sell the long position and you go shop and if you do this right for any market okay for any currency pair right you would have a simple size of data you would know right whether the market has a trending behavior or a mean reverting behavior because by doing this simple test this simple back test and if your equity curve is sloping up higher over time it’s telling that this market has momentum it has followed through whenever it breaks above the previous day hi it has followed through it continues to go higher whenever it breaks a previous day low it has followed true econ used continues to go lower and if that’s the case right for that market you will have an upward sloping equity curve on the other hand if you have a market that has a mean reverting behavior every time it breaks above the previous day high yes no follow-through just reverse back lower or whenever it breaks below the previous day in law any reverse back up higher that is a market with a mean reverting behavior so different markets have different behavior some trend better and some you know simply are mean reverting in nature so again right don’t trust that you know markets trend 30% of the time because that’s not true right it really depends on the type of markets did your trading and again they only can be done right based on your research and your testing and you have to find out for yourself but couple that I can share with you right now is that as of right now pound dollar pound yen they are trending markets or the Canadian is a mean reverting market and this is based on the daily timeframe nothing right there is the best trading strategy out there right the best trading strategy is the one that generate the most amount of profits well that’s not true again right you can’t judge a trading strategy based on the amount of profit that you make because the amount of profit that you make is determined by a couple of things number one the size of your trading account and number two the amount of risk that you’re taking for example in account debt has $1,000 you won’t expect that thousand dollars account to make like what ten thousand hundred thousand within a week on the other hand if you have let’s say a billion dollar trading account your P&L each day can got 100 torniquet that it’s pretty normal okay so don’t judge a trading strategy based on the how much profit that person has me right it doesn’t work that way on the other hand right some people might judge a trading strategy based on the percentage returns all right let’s see two trading account both attend cage one account made a fifty percent return and yet I don’t only make me be let’s say a 10% return anyway they owe the strategy that made fifteen percent reason that’s a better trading strategy know there could be because of the risk management may be that particular person who’s trading it he risk fifty percent on his trip and he achieve a one to one reward ratio that’s how he he’s up 50 percent on the other hand that guy could be risking 1% on each trade he made a 1 to 10 or is reward ratio he made 10 percent off on his account so don’t you look at percentage because again percentage doesn’t tell you anything okay so really this short answer is just is that there is no best trading strategy out there you can really define what is the best trading strategy ultimately you have to find a strategy that you’re comfortable with it resonates with you and you can trade it consistently there would be best for you given your circumstance and number for support resistance it gets stronger on every test right so if you read a lot of text books you read a lot of forums or whatsoever you see that you know whenever the price has a part right the more times its test that the stronger it becomes and there again is something that I can agree because based on my trading experience the more time support is tested within a short period of time the weaker it becomes because the reason why support holes is because there is buying pressure on there may be you know a huge institution wanting to buy a certain amount of order at that price and the more time support is tested right there order gets thinner and thinner until it’s gone and when there’s no more order left to support the price and support what happens well support bricks it brings now so think of it this way an analogy imagine there’s a door in front of you one big wooden door and you have a sledgehammer in your hands and you smash the door three four five times let me ask you does the dog get stronger or does he get weaker well clearly they wouldn’t dog would have a hole and eventually is gonna break and it’s the same thing as support right the more time is being tested within a short period of time the greater the likelihood it will break not 100% but more often than not and finally the last thing number five if traders will tell you right oh it’s not possible to make money in the markets right you know trading isn’t keeping forex trading is a scam yeah I gotta and the reason why they say that is because they have to justify their failures they fail to make money from the markets and in order not to look stupid to themselves in order to not be you know looking like an idiot to themselves they have to justify and say that it’s not possible to make money from trading and then step belief right to make them feel good about their failure but here’s the thing one person’s belief does not mean that it is the truth and you as a trader is trying to make it in the market don’t let the belief of us a negative person affect you because that is their belief it is not the truth okay so don’t let the failure of someone else justify your failure don’t use that as a reason if you put in the work if you go all out you can find success in the market may not be the kind of expectations I know the Lamborghini is the hot chicks you know the Gaby’s quick schemes it may not be the line of success that you might be envisioning right but you would have a skill a skill that allows you to compound your returns for the rest of your life and that to me is success okay so don’t fall for that mirai way it’s not possible to make money from trading because that is just that person’s belief to justify his failure don’t let that happen to you so with that said I have come towards the end of today’s episode I wish you good luck and good trading I’ll talk to you soon you

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