The most difficult endeavor we have ever done

Whatever our motivations are, we realize, that they must be very deeply rooted if we want to persevere in this game. In the beginning we are failing left and right across the board. It’s almost like a mandatory phase of necessary self-experience. Clicking mouse buttons is so effortless. It must hurt first until getting that realization that there is more to it. Quite obviously, you have not given up at that point, otherwise you would not have arrived at this website.

You will agree that becoming a trader and pulling out a substantial amount of money from the markets (whatever this means for you) is one of the most difficult endeavors you have ever done. It’s not only about our motives and motivations that we do it, but it's also about personal development in the process.

I have some cash on the side which I want to use for trading - money has to work, right? Quickly I realize, this can't just be a hobby for a novize trader. It feels like gambling. I am not willing to lose it all like this. I must apply a different approach to this.

The moment we start analyzing a trading product more in depth we can see that the markets are rigged against us. It is the way it has to work. It is a zero-sum game after all - driven by emotions. Markets are maybe not against us personally, but against the majority of market participants. Millions of retail traders out there enter the arena unprepared, unprofessional. They are ready and willing to throw their hard-earned cash into the pot. On the other side are the large institutions with huge capital, huge computer processing power, huge budgets to develop algorithm’s taking advantage of the innermost psychological flaws of the human brain.

Many believe too early that the reasons of failing is a lack of psychological resilience. Things change if we can trust a working trading system and the numbers it produces.

We cannot suddenly find a way to think opposite to our human instincts. Turning the screen upside-down won’t work either. Of course, psychology is an ever-present companion in trading. Self-awareness, discipline and mental strength has high importance. Nothing against cold baths and meditation. However, we are strong believers that skills, know-how and building a good trading system comes first. The mental part will take care that we can follow good processes.

We are seeking for:

• A way to hold back on impulses the market creates to enter a trade. Once we clicked the button, we are in the trade. If we did it together with a couple of thousand others… we will be on the wrong side.
• The need to know when the probability is in our favor that a price moves a certain distance in our predicted direction.
• Knowing when market regimes change and how our system copes with it.
• Optimizing strategies considering the contextual environment when entering a trade.
• Optimizing exit strategies by understanding the probabilities of price continuation or reversion.

There will always be losing trades in any system, but the numbers need to tell us what good strategies are, so we can find confidence in them. We need to know our edge and improve upon it continuously. If we don't, the markets will make us doing so – or break us.

You have to be a professional, otherwise you will give it away to professionals.

 

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