Video 06: Personality Traits of Successful Traders
* Traits of great traders * Doing stupid things * Comfortable with uncertainty
Last updated
* Traits of great traders * Doing stupid things * Comfortable with uncertainty
Last updated
Discplined
Objective
Patient
Comfortable with uncertainty
Great managers of their trades
Do what is right, when you don't want to do it.
There's no "just this time, maybe it will work for me this time." -- I do not care about probability.
If you usually take high probability as always, DON'T take low probability this time.
No matter how confident you think the market will do in the next, 40% is that it will do the opposite.
If don't feel perfectly "normal", don't take the trade.
If you are taking the trade, always be open to the possibility, the market will do the opposite.
You trade what is there, not to trade if what you want, is not there.
Example in the chart,
It is a pretty tight trading range in a bulls channel.
Don't do low probability trading: buying low bars, selling high bars.
Higher probability: wait for a strong break out, or wait for a follow through after the break out.
The red circle in the chart is the entry for low probability traders. It has high R/R, but low probability.
The green circle in the chart is the entry for high probability traders. It has less R/R, but high probability.
You see a 3-push wedge, as a beginner, you want to sell at the wedge top.
But as a beginner,
you forget there are 8 consecutive bullish bars on the left.
instead, beginners will think the Stop Loss will be "just" on above the tops, it is a good R/R trade.
You should wait to see:
a serious bearish bar, or
a micro double top
or trading rende sideways.
Beginners ALWAYS thinking about risk. NEVER thinking about probability.
Beginners knows they will lose money but only a little, with high R/R. It makes them to take the trade.
Beginners hope the great R/R will pay off the low probability as a risk.
Beginners hope the market to do what they hope -- the low probability trade happen. But it's a bad trade.
Beginners think maybe it works?
Beginners think maybe there will be moving down more?
You should see:
Last sell off fell so many bars, but the market goes Higher High.
This is the 2nd entry to sell off, this time will go even stronger than previous one.
The actual probability going down is very low, or not much profit. (i.e. way less R/R than beginners hope)
8 consecutive bullish bars, 8 bars becomes a micro bull channel. (8个连续阳线形成小通道，反转概率小)
The top bar is a tiny little doji bar, it is a very weak sell signal bar. (顶端的阴线（黄色）只是一个十字星，买方力量并不强)
Double bottom, and makes a higher low. It is an early stage of Bull Channel. (下方双底，且低点抬高，上涨趋势明显)
The previou selloff, was not as strong as the bull leg before it. You can see a lot of doji bars inside, and mix with bullish bars. (上一波下跌（红色），明显比上上一波上涨的力度要小，因为下跌的过程中出现了很多小阳线和十字星，说明下跌的动能不足。)
The 1st leg rally and 2nd leg rally are stronger than the pullback selloff. And there's a higher high and higher low. (相比之下第一波上涨，阳线非常连贯、漂亮，一根一根大。第二波上涨也是同样，且创了更高的高点。)
Concolsion: Experienced traders will expect for a pullback rather than a start of bear.
总结，初学者这个地方会尝试做空，因为他们只想着 盈亏比，因为你的止损可以放在顶端的上方一个tick，但是下跌有无限的“遐想空间”。 而初学者过于注重自己的“对市场的想象”，而忽略了上述所有实际情况（上面五点） 所以，他们会做空，然后一再止损。 更有甚者，加仓做空。
而作为有经验的交易者，绝对不可能在这个地方有任何尝试做空的想法。 他们只会想着，等回调一点，做多，顺势而为。
The habbit of "selloff at top of 3 push wedge" everyone has it. However:
Experienced traders may also make this dumb mistakes, but they exist very very quickly. -- lost is tiny.
Beginners may hold way up, and hope it comes down, maybe there's another wedge then it will come down. -- losing increaditable amount of money.
When you made mistake, recognize it, admit it, and fix it quickly.
Like treat my grand parents, I made mistake, I be respectful to them, so I feel disgraceful, I will rectify it as soon as possible.
If I sell off at that top. I will exit trade after I see the following bullish bar, or the follow through bar after the next bullish bar.
Markets have been honestly to you, transparent to you, consistently behave as it is over thousands of years. They deserve your respect.
You need to give the same respect, honesty to markets.
10% of the bars on the chart have really high probability, a strong breakout.
90% of the bars on the chart are either in a channel, or trading range.
the probability that the market will go up or down fluctuates between 40% and 60%.
90% of the bars on the chart:
trading range
bull channels / bear channels
break out with weak follow through
...
You are living with constantly uncertainty whole day.
Most tradings are unclear, and rarely more than 60% certainty.
Knowing how to live / survive with insecurity is the only security.
You have to be comfortable to take risks
Never be afraid of losses
Losses are inevitable
Nothing is clear in real-time
Everhtying is clear at the end of the day.
You must be comfortable with what you're doing. You plan to do this for many years. It must be enjoyable, not miserabily stressed.
You have to find the way of trading which is suitable for you. You gotta find a way works for you: time frame, indicators, trading strategy, etc ...
You have to study a lot. There is no shortcut for a great trader. You are trading against the most smart elit people in the market, if you make money, they are losing money.
Be comfortable with losing most of times.
You must be comfortable with 40% chance of making a big profit.
That means 60% chances, you are going to lose, or break even.
Be able to hold big bars.
you have to have the personality to hold against the reversal attempts.
You must be good at finding high probability trades.
Scalpers expect a bad or equal R/R, and that means they have to win very frequently.
A good scalpers usually win 90% of the time. Because most of the traders can not win 90% of the time, that's why most of traders, SHOULD NOT do scalp.
You must make quick accurate decisions.
Most traders can not do that long term (i.e. many years)
Some traders
take swing trade as normal
switch to scalp trade when they see a trading range.
90% of the time, a great traders can make money both by selling and buying.
use wide stops
comfortable scaling in to manage the risk
90% of the bars on the chart, you can make money.
Only the 10% of the bars, with strong breakout, you can only trade in that direction.
