[Music]
greetings shredders and welcome back to
another survival guide in today's
discussion we'll be covering exactly how
to identify when we should stop trading
in the trading world it's important to
understand how to execute but it's also
important to be able to identify
circumstances that would probably lead
to unfavorable outcomes if we get good
at identifying those as well as get good
at knowing when to get in then overall
we are becoming better traders but
without any further ado let's dive on
into it and learn when not to execute
the futures markets are faster moving
and more hectic than traditional equity
markets but regardless it's important to
know when to stop and call it a day in
any type of trading it just could be
arguably more so impactful in futures
trading it's the idea that we can
mitigate unnecessary losses and by doing
so we'll then amplify or
put a better focus on our remaining
winners
the reason why it's important to know
when to stop trading can really be
quantified with the old adage quality
over quantity generally it's better to
win four out of five trades then loosen
our entry requirements and win say six
out of ten
when it comes to the exact reasons why
we should stop trading for the day
there's going to be a number of things
that we might encounter throughout our
trading career but what we have listed
here are going to be some of the most
common ones that traders will run into
the first is going to be trading hours
and what i mean by trading hours whether
you're a day trader or you're willing to
take a longer term approach to trading
you have to know the market hours for
the investments that you're interested
in being involved in the most
significant risk for traders is leaving
open a position overnight and not
understanding what's going on during
that time while they're not looking at
the market this exposes them to on all
kinds of different unexpected events
that they may not be aware of like news
releases from the asian session if
you're an american trader that you may
not be involved with or understand and
your trade might bear the burden of
those
shakes and quivers caused by that event
then we have things like the wrong
mindset it's important to always have
the right mindset when we are trading
this is the i'm going to win and learn
mindset it's not i'm going to beat the
market and be angry if i don't it's i'm
going to always make the best of what i
have here and i'm going to continue to
adhere to my training plan it's having a
positive mindset but being realistic
about what's going on and allowing
yourself to critique and improve along
the way
then we have boredom
boredom really has no place in the
trading world all of us will at one
point or another feel this creeping in
in various forms boredom can be
described as when we're sitting at the
screen we're looking at the charts and
we haven't had a trade in over an hour
and a half if we're a 15 minute chart
trader and we're used to taking say five
an hour we might get bored and come up
with a reason that allows us to execute
that isn't really directly written in
our trading plan this is not good this
is accepting a lower equity because
we're getting in with lower requirements
then we have greed greed is really
self-explanatory it's trading when we
shouldn't be trading specifically just
because we want more money at the end of
the day trading is very rewarding and it
can feel very powerful when we see those
numbers in our account go up and we can
very quickly get addicted and want those
numbers to go up even higher it's
important to understand that we need to
always remain algorithmic with our
thinking about trading and not do it
based on emotions of either fear or
greed then we have chasing trades
chasing trades usually is going to occur
when things are not going our way a lot
of traders will refer to this as fomo
it's the fear of missing out it's when
we know that the market is going to do
something but we're not confident enough
to enter
then the market confirms our suspicions
right and then we get in past that
opportunity just because we feel like we
knew all along and we want to take
advantage of what we thought was right
the problem with this is the move
probably already has happened the reason
for getting in has already come and
passed and we don't have a time machine
to go backwards
then we have revenge trading revenge
trading is when a trade is not going our
way and we cut it short and then we want
to win it back we want to win it back so
we want to get revenge in the market we
want to go ahead and show the market
who's boss so we go and place a trade
that we probably otherwise wouldn't have
made just because we don't want to see
our accounts and negative for the day
this is very common and it is not
healthy for our trading account and then
finally we have lack of trading plan the
lack of trading plan kind of encompasses
everything above it because if you're
adhering to a trading plan you'll be
able to avoid pretty much all of this
but it's important still to understand
what all of this is even if you have a
trading plan because it'll become easier
to identify and skirt around any of
these negative things at least negative
for our account once again these are not
the only reasons to stop trading however
they are some of the most common and
chances are you've probably already
experienced a vast majority of these
above all else if the market isn't
suitable sit out now yes this is
extremely subjective it's up to you to
decide if the market is suitable for you
and what that really means is is the
market suitable for your trading
strategy this means has your trading
strategy been built around the
conditions that are currently presenting
themselves in the market if you're
trading with a trading strategy that
favors very volatile markets well then
you probably love these markets that
we've been experiencing since coving but
if you're a trader that likes riding
long term trends and kind of sitting
back and coasting with the momentum then
you probably hate all of the choppiness
that's going on this is just a crude
example of why it's important to
understand where your trading strategy
is applicable and to understand which
market conditions you should not be
involved with it's just as important to
understand where your particular trading
strategy excels as it is to understand
where it might be struggling this is why
using demo accounts can be so darn
valuable because we can try out our
strategy in all different types of
scenarios across all different markets
without risking a single dollar
at the core of most trading mistakes are
emotions most of the reasons why we
shouldn't trade are built around
emotions because instead of requiring
ourselves to become mr miyagi or just so
untouchable by our human emotions that
were almost detached from reality it's a
lot easier to identify when those
situations that are primed to cause
those trading mistakes are getting ready
to present themselves and just avoid
them entirely if we don't put ourselves
in the situation if we don't open the
cookie jar maybe we won't be as tempted
so when we spot the cookie jar if we
walk the other way before we ever get
near it perhaps we'll save herself a few
trading mistakes along the way good luck
out there i'll see you all very soon
[Music]
[Applause]
[Music]
[Applause]
[Music]
[Applause]
you