You make a profitable trade and then groan that you were not big enough.
If you could just trade your best trades bigger, you would make much more!
But then you also find an A+ setup (your favorite trades), put on max risk, take a loss, and then grumble that you should have lost less.
I certainly have been there. Let me offer some help on these issues, so you can start working to grow your trading account. This might just be the one thing holding you back as a trader.
I am fortunate to work with many top traders around the world both at our trading desk and outside. Risk is an issue that I work on with ALL traders and of ALL trading levels.
I would like to focus on a danger that I see for developing and new traders when managing risk. It is often the key to them becoming a standout or underperformer. And you may be surprised at what it is.
First, let me introduce a conversation that I had with a top international prop trader to illustrate our point. This top trader is working on trading bigger. He has identified his A+ trades. He knows in specific detail the variables for these trades. He has technology built to find them. His daily routine has been crafted to spot and crush them. His reviews are centered around building from them.
During a recent trade, he spotted an A+ trade and then put on max risk. In his review, I sensed some regret for the loss and a feeling he should have cut the trade sooner. Better said this professional top trader felt like you, perhaps.
Let me introduce another anecdote to make this important trading point that may be holding you back as a trader.
Fast-forward to my 11 AM Mentoring Session with our new traders, where I outlined how to trade the session’s Breakout Market Play. As a group, we had identified an A+ setup. Some new traders started asking questions about limiting risk and waffling about the trade’s chance of success. And I cut them off quickly to make my point.
That trading point is the same point that I made to the top prop trader who made that losing A+ trade. And is something you have to get right with your trading. You. Have. To.
It is too risky not to place max risk when you spot your A+ trades.
Your job is to spot your favorite trades and put on max risk. No but but but. No overthinking. No analysis by paralysis. No holding back. No concern about being stopped out in the position that causes you to place less risk.
Let me offer one last anecdote to further illustrate this trading point.
I was walking to grab lunch with a guest from India studying our markets. He made an astute observation about the prop traders on our desk. He said,”they are so aggressive when they see their trade.” He was amazed at how big they trade when they spot their edge.
Top traders put on max risk when they see their opportunity. Taking stops on A+ trades will happen. You will lose big on your best setups. But, but, but you will win so much bigger when you are right. And max risk when you SEE IT is our job as traders.
Keys to trading success
1) Identify your A+ setups.
2) Record the specific variables of your A+ trades in your PlayBook.
3) Risk 30 percent of your intraday stop on A+ trades.
4) Put on max risk when you see your A+ trades.
5) Let the results take care of themselves.
These changes might be the very thing that propels significant improvement as a trader for you.
*no relevant positions
