No.1 Trading Plan To Make Money And Stay Profitable From Day One

TL;DR

A trader reflects on their previous year of trading and shares a realistic plan consisting of 10 steps to improve their results.

Transcript

I have a confession to make: last year was one of my worst years in terms of trading. I didn’t lose much, but I broke my own rules and in general, I lacked the consistency I previously had. I don’t want another year of mixed results, so after extensive reflection and analysis, I’ve made some decisions and came up with a realistic plan to get back o... Read More

Key Insights

• 😘 Day trading has a lower probability of long-term success, and swing trading can lead to more consistent profits.
• 😉 Focusing on specific high-probability setups and mastering certain techniques can increase win rates.
• ⌛ Limiting daily trading time helps maintain focus and avoid poor decisions.
• 👻 Trading in a small selection of highly liquid instruments allows for better understanding and focus on each market's nuances.
• 🤩 Trend lines can be subjective and lead to false signals, and it's more beneficial to analyze order flow and volume for key levels.
• 👀 Entering trades after a liquidity run and looking for divergences provide additional confirmation and reduce the risk of whipsaws.
• 🍧 Having a trading psychology checklist helps maintain discipline and resist emotional biases.

Questions & Answers

Q: Why does the trader plan to switch from day trading to swing trading?

The trader realized that most of their losing trades were day trades and that day trading has a lower probability of long-term success. Swing trading aligns better with their goals as a trader and reduces unforced errors.

Q: What specific techniques will the trader focus on for high-probability setups?

The trader will focus on techniques involving the volume-weighted average price (VWAP), order flow and volume imbalances, and identifying key zones from daily/weekly pivots. These techniques have consistently resulted in high win rates in their back testing.

Q: Why does the trader plan to limit their daily trading time to two hours?

The trader wants more time for themselves and found that spending excessive hours watching charts diluted their focus and led to poorer decisions. Limiting their trading time allows them to block out distractions, minimize fatigue and stress, and maintain a laser-like focus.

Q: Why does the trader plan to trade in only 10 highly liquid instruments?

Focused specialization can dramatically improve trading results, and the trader plans to deeply understand and focus on a few markets. This allows for better focus on each market's nuances and provides a sufficient supply of potential daily setups.

Summary & Key Takeaways

• The trader plans to switch from day trading to swing trading to increase their chances of consistent profits.

• They will focus on specific high-probability setups that have proven to be effective in back testing.

• The trader will limit their daily trading time to just two hours to avoid distractions and maintain focus.

• They will trade in only 10 highly liquid instruments that they deeply understand.