Home Trading Strategies How A Retail Trader Can Beat The Pros At Their Own Game

How A Retail Trader Can Beat The Pros At Their Own Game

How A Retail Trader Can Beat The Pros At Their Own Game

hey hey what’s up my friend so in today’s episode I want to talk about how you the retail trader can be the pros at their own game so here are a few things that you must do right to put the odds in your favor number one you must remove the need to make money syndrome so what this means is that you know often traders they get involved in trading you know they want to replace a full time income right they want to get out of poverty improve the quality of your life but here’s the thing in trading you will have losses and you will have winners and hopefully in a grand scheme of things your winners are greater than your losses so if you little dive hidden into trading right and you want to quickly you know replace your full time job to get a consistent income then what’s gonna happen is that you will not be faced with the the need to make money because now you know there’s no more safety net you don’t have a job you have to force yourself to make money every single week or every month if not you can pay the bills and when you have this need to make money syndrome what happens is that you tend to break your rules you widen your stop-loss you average into your losses and you do all the stuff right net is detrimental to your trading results and that’s because you have the need to make money syndrome now I must make money from trading this man it’s not you know I can’t put food on the table and once you have that mindset it’s a huge huge right disadvantage to you and if you think about this right how the pros overcome this problem is like for example hedge funds how do they do it even though we’re all trading the same markets but how do they overcome this need to make money syndrome it is because of the payout structure the hedge fund is using in a pass right I would say not anymore now but in the past what’s very common is that they tend to use the 220 structure so every year we don’t fail they’ll take 2% of the management fee and whatever profits that they make right they take another 20% out of it so what’s critical here is the 2% management fee because whether they make money or not in a year they don’t think to they will take 2 percent of the undiminished man so if they manage hundred million dollars they are guaranteed a pair of two million dollars so their goal here is to really to expand the the pot that they are managing right and they make a lot right all right rather they make more from the management fee so they have something fixed right they can have them pay the bills no matter what so that’s that the key right they have something fixed coming in even though they are truly in an uncertain environment so how can you the retail trader do something like this well it’s great if you have a a site income from a business from a job or whatsoever right to help you remove right that uncertainty right from trading the market so there’s a first thing right remove the need to make money syndrome number two as a retail trader you have the flexibility right to do anything you want you can buy you can sell your trip whatsoever markets that you want and this is something that the pros right a lot of our hedge funds mutual funds they don’t have this luxury for example a long only me two mutual funds they can only buy pool long already kind of go short because there are only a long mutual funds and there are there are fans out there who which can only treat stocks because that is your mandate that is your philosophy do can only treat stocks so you can see that you as a retail trader you can pretty much trade anything that you you please write Forex futures CFDs whatsoever so you use that flexibility to your advantage right and also make use of the fact that you can do anything you want you can even stay on do cash when you feel that the market environment is not favorable to you whereas there are institutions out there they they don’t have the luxury to hold on to to cash for example because they have sudden mandate to follow that you know you can’t hold onto cash because you know cash doesn’t a new retail and you buy something that is crappy and it’s a crappy written or even a negative return so you can see that you as a retail trader you have this flexibility to trade whatever you want when you want how you want okay so make use of that flexibility right don’t you know the thing that you always have to be trading in the markets because you have a choice right to stay out of the markets when things are not favorable right having cash itself right is a position in itself the tutting as a retail trader you want to stay away all right a focus on the higher time frame stay away from the lower timeframe you know where the one minute time frame the thirty second chance and that’s because debt is dominated by high-frequency traders they are faster than you they are more capitalized than you they have better access to information than you and clearly that is a domain that isn’t in your favor so if you go up to the higher time frame that’s where you know you can level the playing field for yourself because on that time frame it’s where high-frequency traders they don’t want to get involved because it takes too long right to see returns if you trade off the daily timeframe you only have so much trading opportunities over a year whereas you trade on the lower timeframe right you know seconds chat a mini-trial you have much more trading opportunities so again right stay on a timeframe right where you are not as disadvantaged right which I would say is the higher time frame anywhere above the former time frame right that is something that you know you pretty much right won’t be copied competing right with all this you know HFD traders and number four as a retail trader these days and nature technology has improved so much you can actually get to try to help you validate your trading strategy that we extract an itch from the market you know tools like army broker help you do back testing then you have data field like known or get data CSI data we can use right to validate your trading strategy to know whether you have an H unlocked if you think about this right 1020 years ago a retail trader one of these tools this only reserved for the the institution’s the funds out there but now for few hundred dollars right you can have access to these powerful tools right to know whether you know you have an edge in the market so make use of these tools make use of technology to improve your trading make use of technology right to find out right what are the behavior of certain markets and how you can exploit it the tools are now out there they are not expensive they are within your reach so make use of it please and finally finally right the last thing is this right is that it doesn’t matter whether you’re retail trader you’re pro trader prop trader whatsoever you have to respect risk the market doesn’t care who you are what your background or how much money you’re trading because if we don’t respect risk it’s gonna be a matter of time right before you blow up everything right it doesn’t matter if you trade for the bank for example Nick Leeson right he collapsed the entire Bank right because of you know poor risk management then we have you know long-term capital management right a lot of you know prolific right traders fund managers that go belly-up because they don’t respect risk so what more of you the retail trader all the more you have to respect which this is money your heart and money right then you are managing so please right respect risk okay so without it I have come to the end of today’s episode I wish you good luck and good trading and I will talk to you soon you


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