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Why You Lose Money With Technical Analysis

Why You Lose Money With Technical Analysis

hey hey what’s up my friend so in today’s episode I want to talk about now why traders lose money with technical analysis well one of the most common reasons is that you know it’s because technical analysis doesn’t work Reina is [ __ ] is crap it’s a scam that’s a pretty common one okay and and here’s the thing right thing about this or rather let me ask you a question let’s say you know to drive a car I think most of you watching this right now you know how to drive a car right and just because you know how to drive a car does it mean that if I were to you know send you for an f1 championship you can win the race I think you you know shake your head and say of course not no well this is the same as trading right just because you know a few technical analysis techniques right doesn’t mean that you can be a profitable trader you need more than there so what do you need a few things number one your technical analysis must have an edge in a market this means your trading system your strategy it must have a positive expectancy what is the positive expectancy let me give you an example let’s say there’s a coin in front of you right now every time he comes up here right you win a dollar every time it comes up till you lose a dollar in the long run what happens well that coin is no positive expectancy you just be breakeven every time you renew in a dollar you lose you lose a dollar you’re gonna get you know you’ll be pretty much flat in the long run but now let’s see in the coin every time we toss the coin and it comes up here you win $2 and every time it comes up till you lose a dollar now you see the difference in the long run what’s gonna happen well you will make money from the coin toss right so this is what I mean by having an edge right that coin toss clearly you have an edge right over the other opponent and it’s the same for your own trading your system must have an edge in the markets and having an age yourself it’s not the only thing because you also must have proper risk management so get back to the coin toss example let’s say you have 10 dollars in trading in coin toss capital every time he comes up hit you win $2.

00 every time it comes up till you lose the dollar and you have $10 worth of coin toss capital how much are you gonna bet on each coin toss you can see that if you bet five dollars right it’s gonna be a matter of time right before you blew up your coin toss capital because after two losses right your capital is wiped out so you can see that just because you have an H in the coin toss but without proper risk management you will still lose and it’s the same for trading right just because you have an H in the markets just because your system has an age doesn’t mean that you can be a profitable trader because without proper risk management it’s still going to three that speed is going to waste okay so that’s the second main risk management and the third thing is this discipline you must have the discipline to follow the rules that you have set up for yourself you must have the discipline right to be consistent so let’s say you know that you know you should reach one percent on each trade okay and you have a system that makes money maybe sometimes you know you follow your rules you follow the one percent one percent risk management idea if you know given yourself and sometimes when you’re feeling good you’re feeling confident you read seventy percent of your account on one trade and if that one trick goes wrong that’s it is all wipe out so yes this is where discipline comes into play the discipline to follow your rules the discipline to stick to your rules when the drawdown comes the discipline right to be there executing day after day right without any deviation from your system that is discipline and that’s what you need so now before I end of today’s episode right I believe most of you’re wondering so Rana how do I find in each in the markets I mean you know I know right finding an agent markets right you know yeah yeah but how do I find it well there are many ways to go about it and I will share with you what I think is the easiest way and that is to follow the ideas right there has been no put up by traders for example there are books out there right there actually share with you trading systems that have an HR markets and those trading systems can serve as a template for you to develop your own trading strategy let me give you an example right following the trend by Andrea’s clean Oh unholy grill by Nick wrench I think Caesar Alvarez and Larry Conners wrote a couple of books right on on trading systems as well go and look up those books look at the systems right they really give you the exact trading rules the entries they exist the risk management and of course I don’t expect you to just trade it blindly take those rules do the work do the back-testing do the research and validate whether those rules work or not if it doesn’t work right then hey chuck it away but if it does work you want to ask yourself why does it work are you convinced that it works does it have a sound logic behind it and if it does right is there are ways that you can tweak the system to better fit your own personality to fill your own circumstance okay maybe let’s say trend-following you’d want to write such a long term trend can you reduce the length of the trailing stop loss so you write a shorter term trend and if you do that what are the results of the system once you’re comfortable with it right and you can you treated life of a small account and see how the reason how the system fare in the real world of three if you face okay within your expectations then hey you might want to consider scaling up trading a slightly larger and that’s how you go about it okay there is no shortcut here in trading if you’re looking for a shortcut this is the wrong show to be listening to but if you’re looking for proven strategies and techniques right to help you level up your trading in hey this is the place and with that said I’ve come towards the end of today’s episode if you’ve enjoyed it right don’t forget to rate review the podcast it helps us to grow right to reach out to more people and I really appreciate you for doing that and I will talk to you soon you


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