February 9, 2014

Effortless trading

effortless trading wordle
Imagine Your trading is effortless

By effortless I do not mean "with no effort". This is not possible.

Imagine your trading feels effortless. You like doing it, you feel no stress, no pressure, no worries.

Imagine that

  • you know your trading method very well (this gives you confidence and removes guessing or futile attempts of predicting the market) 
  • you know exactly if there is a trade setup or not (you know exactly if your edge is present, it prevents over-trading) 
  • you have the discipline, to trade only if your setup is present and only if you feel ready (think mindset, your state) 
  • you have patience, you understand that the market is not going away, that there will be trading opportunities in the future, and that you cannot rush to become profitable (so you do not trade if there is no setup and you take time to forward test your method on demo) 
  • you look at the chart for 10 seconds and you know if the setup is present 
  • it takes a minute or so to decide if you should trade this setup, e.g. based on confluence; and where to place the initial stop loss order and how to manage the trade (e.g. how to move the stop or place a take profit order) 
  • there is no stress
  • you do not care about the next trade outcome; this is because 
    • your position size is right, so that a single loss, or even a series of losses is totally acceptable to you (as long as it is not much longer than the longest in backtest) 
    • you trust your method, that it gives you an edge, and
    • you trust yourself, in your ability to follow your plan, so you know that, on a large sample of trades, you will make money (so you do not worry if you are going to be profitable for the year, you know you will if you follow your plan) 
  • trading takes as much or as little time as you want
  • you feel comfortable and relaxed at all times
    • and if not, you have techniques at hand to improve your state of mind



My idea of "Effortless Trading" name is inspired by The Effortless Life book by Leo Babauta.

And the scenario above is based on, as most of the material here, on reading top trading books, conversations with experienced traders, and my experiences. 


What do you think? 

Does this scenario look compelling? 

What do you think a result of effortless trading would be on your account balance? 

What needs to be true to achieve this state?  


Here is what I think: to trade effortlessly you need to know and trust your system,  trust yourself,  follow your trading system and your trading plan. Simple, right? Easy? No. But certainly possible! 

And the result? I think the result is a stress-free  and  consistently profitable  high quality trading. 

This what I am on a learning path to achieve :-) 


Update: if you read my later post on what would General Patton say to his traders, you may think this is all but "effortless". Am I contradicting myself? I believe these are two different perspectives, but let me share how I reconcile this: if you put in a hard work (as in Patton's speech) to prepare (learn, backtest, forward test, mindset), THEN the trading can become effortless (as envisioned in this post).


effortless forex trading wordle




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