This is the transcribed version of the podcast linked above ^^^
In this episode, host Matt Davio explains the 10 actions and mindsets of a trader trading to lose and the 10 of a trader trading to win.
MATT: [00:00:00] Hello I would like to talk to you about the One Minute Trader we are here to take the time strapped traitor and turn them into a profitable, money making machine with daily ideas that give you, the trader on the go, a reason to trade with risk defined and profits taken when able. I’m Matt Davio and this is the One Minute Trader podcast.
MATT: [00:00:56] Versus those that are trading to win as well as traders that are just trading not to lose. And I see that all the time I call those “breakeven traders” a trader needs to consider at all times this type of thought before and during a trade whether they are thinking of it in a way that is more engaged to trading to win versus trading to trade or trading not to lose. Concentrating on not losing, so focusing again on the avoidance will actually drive you to losing positions and concentrating on winning. Focusing there will actually lead you to more winning trades. So trading is a business and it requires you to take risks and embrace them. Focusing too much on not losing disables your ability as a trader to take risk and except it. Really, again, we talked about this all the time. But if you can accept the risk from the time you take a trade where am I wrong. Where am I out of the trade than you will be successful. So focus on accepting the loss, that way when you put on the trade you don’t have to think about the negative part of it, it’s already part of the trade. And I tell people all the time that 80 percent of the trades that I take end up against me at some point before I actually turn a profit. So focusing too much on losing, again, disables the traders ability to take the risk and accept it. So to be successful in trading you have to be willing to take risks. But at the same time know how often you can lose and how much you can lose so you have to set rules around if you’re daytrader, how much I’m going to risk losing in a day, a week, a month, all time, before I’m going to change my behaviors. So some of the characteristics of a trader who is trading not to lose. Here’s what they are. If this is you, think about what do you need to do to trade to win. So here are the characteristics of traders trading not to lose which ultimately makes them lose.
MATT: [00:03:09] One: They’re risk averse.
MATT: [00:03:11] Two: their focus is on not losing which leads to the struggle with actually winning trades.
MATT: [00:03:18] Three: using two tight of stops to prevent bigger losses mainly out of fear of losing. That could be any amount again losing a little bit, losing your max amount. You should be comfortable with that from the onset.
MATT: [00:03:33] Number four: trailing stops much too aggressively, again, in order not to lose.
MATT: [00:03:40] Five: taking profits too early for the fear again that a certain profit becomes a loss versus a profit.
MATT: [00:03:51] Number 6: holding on to losers for too long past your your maximum loss with the inability to accept the loss even after the reason for being in the trade has passed.
MATT: [00:04:04] Number seven: is fear driven, rather than driven by their vision or your objective. Again, process it all comes back to process. Do you have a process to take a trade every time.
MATT: [00:04:18] Number 8: you’re trading not to lose if your trading is driven by your past experiences which cloud the present and that is what is really happening: the present. So you need to be in the moment as a trader all the time.
MATT: [00:04:35] The next item if you’re trading not to lose is looking for certainty. Again there is no Holy Grail. It does not exist, stop looking for it. Take the trade based on your process and where you find the opportunities.
MATT: [00:04:51] The next is all about ego. So many people come into this business with an idea of perfection in their lives and in their trading. It doesn’t happen if you’re looking to satisfy this ego stretch. You’re in the wrong business because you’ll never be perfect in trading.
MATT: [00:05:09] And then trading to pay your bills. If you needed to to pay your rent this is not going to be the business that provides you because it’s the thirty first and you have to pay rent tomorrow. So stop trying to trade that way. If you lack patience to wait for the right trade, then again, you’re going to trade to satisfy your need to trade versus your need to win with the objective in mind.
MATT: [00:05:35] And finally the last one of the characteristics for traders that are trading not to lose that I have on my list here is again lacking patience for your winners to play out, again, I’ve said this before but most of my trades take time to play out. I’m not a day trader. That could happen in a day. But most of the time I have to be patient and wait. If you’re lacking this patience you’re again trading out of fear of losing or giving back ins.
MATT: [00:06:03] So what are the characteristics of a trader who is trading to win? Number one: you have to be willing to accept the risk of being a trader right from day one.
MATT: [00:06:14] Number two: focus’ on trading to win. It is a business. If you don’t make profits more than losses you will not be successful in this business.
MATT: [00:06:26] Number three: you have to be goal driven and well-defined in your process.
MATT: [00:06:35] Number four: trade find the opportunities and where the gaps are and where it’s almost a little bit of game theory. Find out where you will behave and when you won’t behave.
MATT: [00:06:49] Number five: trading always in the moment we talked about this in the first portion you need to know where the market is right how and how you will behave or won’t behave in the moment.
MATT: [00:07:02] Number six: have a vision. the vision leads to the process the process leads to achieving the goal.
MATT: [00:07:09] Number seven: embrace the uncertainty. Every day none of us know what’s going to happen in the markets. You have to accept that from day one. If you can. This again will not be the business for you. There are no absolutes. There are no moments of certainty even.
MATT: [00:07:27] Number eight: there’s always noise, there is market noise, shrapnel I call it. As long as there is a reason to still be in the trade say in it. Don’t embrace and take on the noise that’s in the marketplace.
MATT: [00:07:40] Number nine: have the confidence in yourself and the belief in your process. If you don’t have that again you won’t be successful long term.
MATT: [00:07:48] Number ten: patience. Patience for the market to both set up the trade and then wait for the trade to play out over time. Those are two separate levels of patience to enter and to exit. With the patience, your belief and your confidence for the trade you will trade well. So keep these items in mind. Trade to win versus trade the trade or trade not to lose. Very different things so we really want to encourage you to change your mindset and perform accordingly. If you have any questions drop me an email at [email protected] thanks again for listening. Like us on any of the platforms that you’re listening to and we’ll look forward to speaking with you soon.
MATT: [00:08:46] The One Minute Trader was developed to bring you fresh trade ideas every day of every trading week. Make sure you go sign up for our invaluable one minute trader daily e-mails along with our five minute video emails to get timely insights into evolving trade possibilities. Let One Minute Trader be your second set of eyes for trade opportunities that may have passed you by. We appreciate you listening today to the podcast and we hope you’ll support the show by leaving us a positive rating on whichever platform you’re tuning in from. I’m Matt Davio and this is the One Minute Trader podcast.