How To Become An Outlier In Trading!
If 99% fail even though all the information is freely available on the internet, courses, and books then why are they failing?
It’s obviously not a lack of technical knowledge, so what is it?
The answer should be glaringly obvious it’s all due to mindset.
The separating factor?
It’s how you ‘think’
The first way to learn how to think right is to first look at what the wrong way to think is.
Based on major brokers statistics, 80 percent of traders lose, 10 percent of traders are break-even, and 10 percent make money consistently.
As well as that some other interesting data is:
If your trading strategy has a negative risk-to-reward ratio, you have a 300%> chance of losing money vs a trader who is using an even or positive risk: reward ratio.
This is a big one, those who have a negative risk-reward ratio are extremely likely to fail.
It's important that you understand your risk of ruin.
Risk Of Ruin
(The risk of ruin statistic basically looks at your overall payoff ratio (or Avg.+R per trade), your % accuracy and your % risk per trade.
Over a sufficient number of trades (100 or more), you can determine your risk of ruin and know – based on your current trading strategy, whether you will make money, or blow up your trading account.)
So the important lessons here are:
#1: Make sure you minimally target a 1:1 risk: reward ratio on every trade
#2: DO NOT sacrifice your risk: reward ratio (and take it negative) just to increase your % accuracy
Broker Statistics Of Why Traders Fail
CFD Broker’s Top 5 Reasons Traders lose:
1. Clients lose more on trades than they do on winners
2. Small account size
3. No Stop loss
5. Adds to losing trades
So if the majority of failing traders are doing these 5 things then to great put the odds in your favour you need to is
>> DO THE OPPOSITE <<
Every time you do, you are increasing your odds.
Fighting our primitive mind
What you need to realize is your natural emotional response is primitive and hardwired.
What was programmed to protect us from danger or pain is the total opposite needed in the trading environment.
We have to learn to fight and then rewire our natural human instincts and impulses.
We first need to understand this and with that it allows you to create the opportunity to fight it and start learning to get comfortable in the uncomfortable.
Facing the fear is the only way to overcome it.
Common Thought Patterns & Emotions
When trading this primitive mind comes into play and creates all sorts of emotions and sabotaging thoughts.
- You will feel fear when you shouldn’t
- You will feel hope when you shouldn’t
- You will look for reasons to not follow your plan
These are ‘normal’ thoughts that 99% of failing traders are succumbing to.
They give in to these thoughts because they have no awareness that it's their primitive minds taking over.
But you have the awareness of this now and the awareness of what the 99% of failing traders are doing.
So use this to your advantage...
You have to remember this in the moments before or during a trade when you have these thoughts going crazy that you must resist and every time you do you begin to start to build the discipline muscle and tolerance to keep doing the right things.
As hard as it is the more you do it the easier it will become even though it may not seem like it in the early stages.
Repetition Is Crucial
Every single time you do the opposite you create the self-image of a winning trader.
It’s like a domino effect, every single decision creates either a positive or negative.
It will be hard, to begin with, to do the opposite of what your thoughts and emotions are telling you to do but you need to reframe in the moment why it's so important to follow your rules no matter how hard it may be.
Unless you are doing the opposite of the 99% you will fail
Are you going to be another statistic?
Are you going to put the odds in your favour?
Are you going to do the opposite of the 99%?
Do you want this bad enough?
You have no excuse, you have learned why traders fail, and you know what you need to do.
The best way to help you is to first create the right environment for you to adapt and that means:
1. Start small
2. Take it slow
3. Build the right habits
Remember it’s how you ‘think’ and act, it’s NOT the strategy.
The reason why traders are failing is that they are doing the opposite of what you need to do to be successful at trading.
They have no awareness of their emotions, or thoughts that are coming from their primitive minds.
To be part of the 1% you need to avoid the traps the 99% are falling for.