Funded Trading Institution Smart Money Concept Foundation: Power Of 3 Notes: © Consists of 3 stages > Accumulation (usually during the Asian session) > Manipulation (usually during London session) > Distribution (usually between London session and New York session) 4 Asian range is from 20:00 EST until 1:00 EST > Asian session high and low should be noted > Ifthe Asian session consists of consolidation, usually there will be a good setup presenting itself at the beginning of the London session London Judas Swing/Turtle Soup > Usually during London session price will rally and take out a previous old high/old low (stops) or maybe rally into a resistance level (can be a Breaker Block, Orderblock etc.) from which then trade ideas can be derived from > London open is a liquidity grab environment and usually creates the high/low of the day during the manipulation phase on intraday price action. > We only enter during the manipulation stages and if we do not manage to get an entry near the high/low of the manipulation phase, we wait until New York open and search for an entry at that time The high/low of the manipulation phase usually gets created between 08:00 EST and 10:00 EST and the lowihigh of the distribution phase usually gets created between 22:00 EST and 23:00 EST. ‘ Power Of 3 does not always happen in the order mentioned above (Asia accumulation, London manipulation, New York distribution) > For example, the consolidation can also happen during the London session with the manipulation at the New York session. ‘Ifthe market consolidates during the Asian session, a manipulation occurs during the London session into a higher time frame resistance/support level, the IOF (Institutional Order Flow) and the trend is in alignment with our trade idea, we enter. v[London open | Turtle Soup Stop Raid * ‘Asian Range Retest Previous Important High or Low PDL PDNYL OTE PDHPOL PoNvL PDH Previous Important High or Low ore nyo - OTE? Asian Session High Asian Session Low * Turtle Soup Stop Raid ‘Average Daily Range J tondon open PDH = Previous day high PDL = Previous day low PDNYL Previous day New York low PDNYH = Previous day New York high OTE = Optimal Trade EntryFunded Trading Institution Smart Money Concept Foundation: Correlation Analysis Notes: 4 We do not simply enter blindly at every institutional level, we always need the Dollar (OXY) to confirm our trade ideas > DXY and XXXUSD pairs are negatively correlated ‘ EURUSD and GBPUSD are basically moving the same, they are highly correlated > AUDUSD also mainly moves in alignment with EURUSD and GBPUSD, but can sometimes do its own thing and start breaking the correlation ‘ We never take entries at more than one pair at the same time when looking at a trade idea > Due to the high correlation between XXXUSD pairs, if we enter in different XXXUSD pairs at the same time from the same trade idea, if one hits the stop loss, the other will usually hit it 00, so our risk will be multiplied > We decide which pair to choose by looking at which one is the cleanest, trending, gives us the smallest stop loss and has the best spread.Funded Trading Institution Smart Money Concept Foundation: Orderblocks Notes: 4 Big banks and financial institutions are referred to as Smart Money in the markets, Whereas normal people, like we are, that trade their own private funds for example, are referred to as Retail Traders > Retail trading patterns that are commonly used (double bottoms, double tops, trendlines etc.) represent liquidity that Smart Money tries to make use of > Smart Money seeks retail’s stop lossesiliquidity to fund their own huge positions in the market, which usually creates some kind of engulfing pattern > These specific candles that could highlight Smart Money selling/buying are called Orderblocks 4 The higher time frames (weekly, daily, 4-hourly) are essential to determine high probability Orderblocks 4 We do not simply enter once price comes into an higher time frame Orderblock, a weekly one for example > We wait for lower time frame confirmation as well > An ideal lower time frame confirmation would consist of: Weekly and lower time frame Institutional Order Flow in alignment, Orderblock, retracement to Fibonacci level between 62%-79%, happening during a appropriate Killzone > Combined with seasonal tendencies the probability can even be increased further ‘ The objectives of the higher time frames should also always be considered, not only the Orderblock by itself ‘ Once a higher time frame Orderblock is being respected, we can profit off of this (scalping, daytrading, short term trading) > 50% of the Orderblock is as far as the market should trade into 4 Price should not hang around a Orderblock for a long time, as this decreases the chances of the Orderblock being respected drastically, the market should move away from the Orderblock fastlyFunded Trading Institution Smart Money Concept Foundation: Market Structure Notes: ‘Ina bullish trend, the market respects lows and breaks highs (we look for buys), and in a bearish trend, the market respects highs and breaks lows (we look for sells) > When a low is broken in an uptrend, the market either rises again to continue the trend, or it subsequently creates a lower high and breaks the resulting low again, resulting in a change to a bearish market structure. When a high is broken in a downtrend, the market either falls again to continue the trend, or it subsequently creates a higher low and breaks the resulting high again, resulting in a change to a bullish market structure. yFunded Trading Institution Smart Money Concept Foundation: Breaker Blocks Notes: ‘ A Breaker Block is a constellation in which a trend breaks after taking out the liquidity, similar to a accumulation/consolidation phase with a manipulation and distribution > Ina bullish structure environment, if the market takes out an old high/equal highs/liquidity and breaks the swing low that has been formed previously and from which the manipulation originated, that low becomes resistance once the market comes back > Ina bearish structure environment, if the market takes out an old low/equal lowsfliquidity and breaks the swing high that has been formed previously and from which the manipulation originated, that high becomes support once the market comes backFunded Trading Institution Smart Money Concept Foundation: Fair Value Gaps/Imbalances Notes: ‘ Fair Value Gaps are created when the market moves very fast in one direction ‘ The empty space left by the market, the Fair Value Gaps, eventually get filled again Fair Value Gaps are synonymous with ImbalancesFunded Trading Institution Smart Money Concept Foundation: Retracement Notes: In trending conditions, we use the Fibonnaci tool to measure from high to low (ina bearish trend) or from low to high (in a bullish trend) and determine the retracement levels and anticipate a continuation of the trend at these levels ‘ The Fibonacci levels are: 61,8%, 70,5% and 79% > The area from 70,5%-79% is the most favorable oneFunded Trading Institution Smart Money Concept Foundation: Optimal Trade Entry (OTE/Retracement) Notes: * * OTE (Optimal Trade Entry) is a term ICT (Inner Circle Trader) uses for specific retracement levels The OTE area is from 61,8%-79% and a great area to look for sells when bearish and for buys when bullish. Using OTE as a confluence increases the chances of being right, where as if it is not a present confluence, the trade idea will be more risky The best time to trade OTE setups is between 8:00 a.m. and 11:00 a.m. EST > It can also happen and be traded earlier around 6 or 7 a.m. EST or London session if there are other existing confluences (On the higher time frames, we use OTE only for analyzing purposes, whereas on the lower time frames, we use it for execution purposes We never use OTE by itself, we always need more confluences along with itFunded Trading Institution Smart Money Concept Foundation: Time and Price Theory Notes: ‘Timing is one of the most important things to know when trading forex ‘ The two sessions during which you should trade are the ones with the most volatility and liquidity: > London session from 2:00-5:00 EST (prime time for high/low of the day). > 8:00-11:00 EST New York Session (prime time for OTE) > Itis also possible to trade one or two hours before/after these times if the setup presented is of very high quality. ‘ At11:00 EST at the latest, setups can still be entered (only if they are high quality) and at 14:00 EST, trades are usually closed and no longer held.Funded Trading Institution My Trading Strategy (Putting it all together): General Knowledge w/ Q&A Notes: ~ Nota fan of Ping Pong trading, prefers to stick to the trend and trade the one direction > Ina bearish example, selling, waiting until the market retraces to an retracement level to sell again instead of trying to buy during the retracement, in a bullish example, buying, waiting until the market retraces to an retracement level to buy again instead of trying to sell during the retracement ‘ A+ setup consists of AU, EU, GU being at an resistance area and DXY being at an ‘support area when trying to sell, with higher time frames backing up the lower time frames and consists of AU, EU, GU being at an support area and DXY being at an resistance area when trying to buy, with higher time frames backing up the lower time frames + Lower time frame confirmation is a Orderblock/Breaker Block but needs to be in alignment with the higher time frame trend and align with an higher time frame institutional resistance/support > Higher time frame could be daily/4-hourly time frame and lower time frame 1-hourly/15-minute time frame > All trading pairs should also be correlated together to make sure everything is similar and not just an individual case in the analyzed pair 4 On major news days, price action usually is irregular and should be avoided > FOMC, CPI, NFP are examples of major news > News trading is gambling, high risk with high reward and many dangers due to the volatility, such as slippage 4 If had so start again in a poor state, would first focus on a stable source of income and trade a single timespan (from 6-10 am EST for example) to take off the pressure of being dependent on trading ‘ Ameteur traders let their trades emotionally affect them strongly, their day and mood will be influenced by the outcome of their trades, whereas professional traders detach themselves from the outcome and forget about previous trade experiences by the beginning of the next trading session 4 Instead of fighting greed or placing it on funded accounts, channel it and use it on prop firm challenges instead ‘ Don't forget what happened in the past and learn from the lessons, otherwise you will be condemned to repeat themFunded Trading Institution My Trading Strategy (Putting it all together): Market Conditions (Where to find the best setups) Notes (Part 1): ‘ There are 3 general market conditions: Expansion, retracement and consolidation. > A+ setups are found during expansions in the market and most of the trades should be taken in this market environment. It is a high probability market condition. > Riskier trades are found during the retracements in the market and are not recommended, it is best to wait for a retracement to end, It is a medium probability market condition > Consolidations should be completely avoided, are not worth the energy and ‘one should avoid even looking at the markets completely during such a market condition. It is a low probability market condition. ‘ ‘Itis very easy to find At setups but very hard to not do anything stupid in between.” + We keep trading in accordance with the trend once a expansion stage has started > We rinse and repeat with our setups during such a market stage > Most of the high probability trade setups are formed during this stage > We stop trading and anticipate a change in market to a retracement again ‘once a important low/high with liquidity resting past is taken or when price is no longer respecting institutional levels in accordance with the trend and expansion movement ‘ Not every day, week, or month is suitable to be traded, capital should be preserved during other market conditions than the expansion > The time when market conditions are optimal and where we are going to. trade more than compensate for the drought stages. Notes (Part 2): ‘ Trading which is not based on the institutional levels of higher time frames and the existing trend, but with subjective biases (trading both sides of the markets and constantly switching the direction) is gambling 4 At trade setups are when in alignment with the trend, higher time frame (daily, 4-nourly) institutional level (Breaker Block, Orderblock, OTE level) and a present lower time frame institutional level (liquidity grab, Breaker Block, Orderblock etc.) ‘ Once the market has expanded, we patiently wait for the market to come back to a institutional higher time frame level, our retracement levels and other institutional reference points and rinse and repeat> For example we wait until the market comes back to an Breaker Block on a daily time frame that aligns with the higher time frame retracement levels and a daily Fair Value Gap before we start anticipating a continuation of the trend from which we are trying to profit ‘ Ifour higher time frame objective does not get reached and the market reverses and continues the expansion without us, we try to determine whether itis reliable and the market has no reason to go back there again > For example if the market creates liquidity, grabs it and reverses to continue the expansion slightly near our higher time frame objective but it does not get reached, we can expect the market to not come back again and to continue the trend ‘ “Trading is truly a game of patience waiting for high probability conditions and a game of discipline to follow your system and letting the edge play out over the long-term.”Funded Trading Institution My Trading Strategy (Putting it all together): My Favorite Setup w/ Full Breakdown Notes: 4 The favorite setup consists of a liquidity grab of equal highs/lows (Turtle Soup) into an institutional level (Orderblock, Breaker Block) (4-hourly, 1-hourly, M15) > The setup has to be aligned with the higher time frame trend or Institutional Order Flow If this setup happens during London session, it is ideal If this setup happens during New York session, itis satisfactory The chosen trading pair has to be correlated with DXY. If DXY is at a institutional resistance level at the same time the chosen pair trades into institutional support level or if DXY is at a institutional support level at the ‘same time the chosen pair trades into a institutional resistance level, the trade is validated > The cleanest pair with the most clear price action should be picked for this setup (potential Power Of 3, cleanest liquidity and institutional level) vy yFunded Trading Institution My Trading Strategy (Putting it all together): The Full Trading Guide (My Strategy) Notes: 4 Trading checklist/strategy: > London session, especially London Open is a liquidity grab environment with false breaks (Judas), where the market usually creates the high of the day when bearish and the low of the day when bullish > New York session is a retracement environment, where mainly OTE retracements occur to continue the daily expansion > Look at DXY and determine the overall bias (correlate that with XXXUSD trading pairs) > Look at the higher time frames, determine the market structure and Institutional Order Flow and only trade in alignment with the daily/4-hourly market structure (trend) and Institutional Order Flow > Note the institutional levels of high relevance on the higher time frames (weekly, daily, 4-hourly) > Look for lower time frame institutional levels inside the higher time frame institutional levels > Trade in accordance with the trading times (Killzones) and time and price theory > Execute on the lower time frames (1-hourly, M15) from Orderblocks/Breaker Blocks with potential OTE levels 4 Important things to apply: > Highlight all trades around multiple confluences: key institutional supportiresistance levels, market structure and Institutional Order Flow (trend), Orderblocks, Fair Value Gaps, Breaker Blocks, Fibonacci Levels (OTE), time and price theory, Power Of 3, instead of relying on a single one, > The 4-hourly and daily institutional supportiresistance levels are strong, significant institutional levels > Institutions and banks mainly watch key levels at the higher time frames (especially daily, 4-hourly) and by hunting a reaction from the higher time frames on the lower time frames, the odds will be put in your favor, So your trades should be based off the higher time frames, low-tisk high-probability setups are derived from higher time frame institutional levels. > Itis senseless to try to trade a setup against the higher time frames and Institutional Order Flow (trend), even if it is only intraday, it stakes the probabilities against us. We always trade in alignment and accordance to the Institutional Order Flow and higher time frame institutional levels.v y ¥ For additional confirmation XXXUSD pairs can be checked for SMT divergence during a liquidity grab (Turtle Soup) There will be days where we should not trade on, not every day is fit to be a trading day It we don't know what the market is up tolwe have no idea what is currently going on in the market, we wait on the sidelines unti it is clear again before looking for trades again Trading 2-3 hours before any red folder news, especially NFP, CPI, and FOMC should be avoided (http://www. forexfactory.comv/calendar) If we cannot close the charts after reaching the daily trading loss limit or trading profit limit and end the day, it says a lot about your current state in terms of personal development. It shows that discipline and patience are lacking and that if this does not change, success will be impossible. There is no reason to be overhasty after wins and reckless after losses Monday and Friday are the least symmetrical in terms of price action, whereas Tuesday, Wednesday and Thursday are the most symmetrical onesFunded Trading Institution The Ultimate Trading Advice Guide: The Ultimate Blueprint to Reach Success in Forex Notes: ‘ The blueprint (1-3 year plan) > The first 3-6 months should be spent studying the basics of forex, developing your analytical skills (course, ICT videos, especially the ones before 2022 because the 2022 course focuses mainly on indices) with execution on a demo account. This step can be skipped if already experienced and not a beginner > Start a small prop firm challenge to get used to prop firm challenges (>50k). Once passed, aim for a payout and use the money from the payout to buy another, bigger challenge. The goal in the first few years is to survive, not to thrive. Once we have multiple/bigger accounts under our management, we stay conservative with our risk and do not become greedy and increase our risk. We slowly build up our bank account from the payouts and build a safety net. With 200k under management, 2-5k a month side income can be generated. > The final step is to aim for 7 figure funded accounts and transition to full time trading ‘ You do not get rich with one single funded account, so try building your capital up first and protect it simultaneously while doing so. > For example, do not become greedy and start risking more on funded accounts (if the urge is too strong, channel the greed to a challenge account instead of to a funded account) just because a clean setup, from which you might think that there is nearly no chance of losing, presents itself. > Only once you reached the end stage with multiple big funded accounts, you can start to risk more per trade and go aggressive on some funded accounts vy v scans | ff 4 ae | sw ou — == a a) rereFunded Trading Institution The Ultimate Trading Advice Guide: The Ultimate Last Week CHEATCODE Notes: ‘In the last week of the challenge, the priority is to get a free retry or an extension, or to even pass the challenge, depending on the account balance, > We do not follow our system in terms of risk management in the last week of the challenge > The maximum allowed drawdown should be taken advantage of in the last week of the challenge > The amount of drawdown left should be split up smartly (calculate how much you should risk per trade idea and how many winners it would take to reach your aimed goal) so that by the end of the last week you either lose by having reached your maximum allowed amount of drawdown, qualified for a free retry, qualified for an extension, or passed the challenge > fin deep drawdown the aim should be to at least qualify for a free retry instead of the extension > fin profits and aiming for passing the challenge, an extension or at least a free retry, the balance should be kept positive/above the needed qualification for an extension and all the excessive profits should be used upFunded Trading Institution The Ultimate Trading Advice Guide: The Ultimate Approach for Tackling Challenges Notes (Conservative): ‘ Conservative method to tackling a challenge: > Risk 0.5% per trade idea until up 2% > Once up 2%, start risking 1% per trade idea until back to original balance (then start at the first step again) 1:2 fixed risk-to-reward ratio Max. 2 losses in a row (prevents revenge trading, after 2 losses the emotional exhaustion will influence your trading) > Max. 2 wins in a row (prevents overtrading, after 2 wins in a row ‘overconfidence will overtake you) > Max. losses in a week (knowing you can only lose 2% max. a week gives you the peace of mind to be able to trade confidently, which is crucial) > > Notes (Aggressive): ‘ Aggressive method to tackling a challenge: > High risk high reward method to pass a challenge, only for people with money in the bank account which they do not mind losing/already funded) > Risk 1% per trade idea 1:2 fixed risk-to-reward ratio > Max. 2 losses in a row (prevents revenge trading, after 2 losses the emotional exhaustion will influence your trading) > Max. 2 wins in a row (prevents overtrading, after 2 wins in a row overconfidence will overtake you) > Max. losses in a week (knowing you can only lose 2% max. a week gives you the peace of mind to be able to trade confidently, which is crucial) v Notes (Very aggressive): Very aggressive method to tackling a challenge: > High risk high reward method to pass a challenge, only for people with money in the bank account which they do not mind losing/already funded), high chance of failing the challenge. Advantageous for people with funded accounts that want to pass other challenges quickly > Risk 1% per trade idea until up 4% > Once up 4%, start risking 2% per trade idea until back to original balance (then start at the first step again) > 1:2 fixed risk-to-reward ratio> Max. 2 losses in a row (prevents revenge trading, after 2 losses the emotional exhaustion will influence your trading) > Max. 2 wins in a row (prevents overtrading, after 2 wins in a row ‘overconfidence will overtake you) > Max.4 losses in a week (knowing you can only lose 2% max. a week gives you the peace of mind to be able to trade confidently, which is crucial)Funded Trading Institution The Ultimate Trading Advice Guide: The Ultimate Approach for Notes: Tackling Verification ‘ The Verification phase must always be approached very slowly and calmly, in contrast to the Challenge phase. > For the reason that there is 60 instead of 30 days time limit ‘ For the Verification phase the conservative approach will be used > > vy Risk 0.5% per trade idea until up 2% ‘Once up 2%, start risking 1% per trade idea until back to original balance (then start at the first step again) 1:2 fixed risk-to-reward ratio Max. 2 losses in a row (prevents revenge trading, after 2 losses the emotional exhaustion will influence your trading) Max. 2 wins in a row (prevents overtrading, after 2 wins in a row overconfidence will overtake you) Max.4 losses in a week (knowing you can only lose 2% max. a week gives you the peace of mind to be able to trade confidently, which is crucial)Funded Trading Institution The Ultimate Trading Advice Guide: The Ultimate Approach on How | Would Tackle my First 50k Account Notes: ‘ The first funded account should not be approached with the mindset that this will make you rich and it is time to make a lot of money now > Getting greedy once you obtain a funded account is a sure path to ruin. > The risk should be kept at a (low) level where you are able to trade comfortably throughout all trading phases > The account should be used with the goal to make small, consistent profits with low risk to fund other funded accounts with it and slowly build the pyramidiempire > Aggressiveness should be only applied once enough funded accounts are under managementFunded Trading Institution The Ultimate Trading Advice Guide: The Ultimate System for Notes: Funded Accounts Explained ‘ The best, most efficient system for funded accounts is the conservative one. > > > > Risk 0.5% per trade idea until up 2% Once up 2%, start risking 1% per trade idea until back to original balance (then start at the first step again) 1:2 fixed risk-to-reward ratio Max. 2 losses in a row (prevents revenge trading, after 2 losses the emotional exhaustion will influence your trading) Max. 2 wins in a row (prevents overtrading, after 2 wins in a row ‘overconfidence will overtake you) Max.4 losses in a week (knowing you can only lose 2% max. a week gives you the peace of mind to be able to trade confidently, which is crucial) 4 0.5% risk is advised because it is low risk but still enables decent returns and you need to lose on 20 trade ideas in a row to lose the account (which is highly unlikely because the daily/weekly loss limit rules exist) + This rules of this system also limit self sabotage (most people lose their accounts in a single day or very short time of period due to self sabotage) + Your psychology determines whether your system will be profitable or not 4 Inn industry where 95% fail, you have to stay patient and control your urgesFunded Trading Institution The Ultimate Trading Advice Guide: The Ultimate Guide to Manage 7 figures Notes: 4 Instead of using a trade copier with one master funded account and multiple slave funded accounts, it is better to split the accounts and trade them individually > This is advised because if all your funded accounts are in deep drawdown at the same time, it will affect you emotionally and you will not be able to trade comfortably > For example, some accounts can be traded aggressively, whereas other ones get traded conservatively (half of the accounts aggressive, half of the accounts conservative for example) > The aggressively traded accounts are highly likely to be lost, you need to accept that and be aware of that, so that you can accept without any hard feelingsFunded Trading Institution The Ultimate Trading Advice Guide: Extra: What monthly goal Notes: should | aim for? 4 You should not aim for unrealistic monthly % returns, such as 10%+ a month, because to achieve such a thing, you will have to risk more and put your account by doing so in jeopardy. > > > > Instead, aim for a realistic monthly % return, such as 2-5% a month Let your goal be to achieve more capital instead of more return 2-5% a month on a 100k account means 2-5k a month The only difference between trading big and small capital is that the absolute amounts of risk/return will be bigger, which you will have to and will adapt to mentally, the amount of risk in % and the system you use stays absolutely the same. Consistency and patience is needed to become rich, this is not a get rich quick scheme The faster you try to become rich in this scene, the faster you will go broke.Funded Trading Institution Trading Psychology: The Art of Losing Notes: ‘ There are no great traders out there, that have not taken a loss > There is no way to not achieve losses and achieve positive retums every month 4 Aloss does not mean your trade setup or analysis was bad (unless the trade was forced and stemmed of bad psychology) > They are inevitable and you need to accept them > Ifyou take a loss but followed your system, it is a great day ‘ Overa serious of trades (longterm), we will be profitable > Avoid being scared and thinking your system does not work after a loss or a few losses > With a 50% win rate and a 1:2 risk-reward ratio, after a sample size of 10 trades we will come out profitable most of the times ‘ “Every day | assume every position I have is wrong. | know where my stop risks are going to be. | do that'so | can define my maximum drawdown.”- Paul Tudor JonesFunded Trading Institution Trading Psychology: Best source | learned for trading psychology Notes: ‘ The only trading psychology sources needed: > “Trading in the Zone” by Mark Douglas > “Mind Over Market” interview by Mark Douglas (httos:/www youtube, com/watch?v=GhkJ9P3aqRe) > These sources should be reread/rewatched to burn the informations into the subconscious mind, repetition is crucial > The concepts will only be truly understood once your own experience has been made and you went through all the stages of trading (blowing accounts etc.) ‘ Wasn't profitable when the trading strategy was good, it all came down to psychology and the profitability only came with proper trading psychology ‘ For example, if a setup presents itself, which in the past always came out as a winner, normal people feel the urge to over risk/over leverage because the setup is bound to be a winner, but a professional would know that every trade outcome is uncertain and everything can happen, so they manage risk appropriately and do not let themselves be influenced by their emotionsFunded Trading Institution Trading Psychology: Why | use a 1:2 Risk to reward system Notes: Why 1:2 risk-reward ratio’ > Every trader, no matter how good, will have losing streaks > During a losing streak, the chance of self sabotage is the highest > Statistically, the higher the risk-reward ratio with a win rate, the higher the retums > However, this may not be true practically if we take the psychological issues that come with a higher risk-reward ratio into account > A lower risk-reward ratio will get you due to the higher accuracy out of a losing streak faster, because your take profit is more likely and faster to be hit, which lets you recover your psychology/mentality faster and limits the time in which you are highly likely to self sabotage > Knowing you will come out of a losing streak fast because your take profit is likely and easily hit due to a low risk-reward ratio with a high accuracy will ensure confidence and proper trading psychology. > A1:2 risk-reward ratio is the optimal amount because it is not too little and not too much, it achieves good retums while letting you move away from a state of bad psychology during a losing streak faster 1:1 risk-reward ratio gives too litle return, especially, when the trading frequency is not very high, while a 1:3 risk-reward ratio may plague your psychology > With a 1:2 risk-reward ratio you don't need to use a tight stop loss to achieve a high risk-reward ratio, because the move you try to catch is small > Your goal should also not be to catch a whole move, it should be to only catch portion of a move (which is more than enough if you can do it consistently) vFunded Trading Institution Trading Psychology: How to go about a Losing Day Notes: ‘ Ared day is not a bad day, as long as you followed your system and rules > Following your system is everything, it does not matter whether it is a green or a red day. As long as you followed your system, it was a good day. 4 Do not be focused on your profitfoss or return on a trade by trade basis > Zoom out and think over a serious of trades, because in the long-term and over a series of trades, you will end up profitable, even if you only have a 50% win rate > The outcome of a individual trade does not matter, what matters is the outcome of the series of tradesFunded Trading Institution Trading Psychology: Live Weekly Psychology Call #1 - 12/4/22 Notes: ‘ Asa beginner, trading is mostly technical and less psychological, because we first of all need to acquire the technical trading skills, create our system, rules and gain experience > Later on, once the technical things have been acquired, trading becomes mostly psychological ‘© When we transition from a demo account to a live account, we experience very different results, now that real money is in play and the self sabotaging starts > The difference in results between a demo account and live account originates from the psychological gap > The gap consists of emotions, bad trading psychology and a not properly developed mindset > To become a consistently profitable trader, it is needed to close that psychological gap ‘ Tobe able to close that psychology gap, a system and specific rules are needed, to limit the subjectivity and influence by emotions > Tobe able to follow such a system with the rules, the subconscious mind will have to be reprogrammed, because if the subconscious mind is not programmed accordingly, it will not be possible to follow the system with its rules > No matter how systematic, logical, rational, convincing or seemingly robust a trading system is, the success of that strategy is fully determined by the traders ability to cope with their emotions > A trading system/strategy is useless, if it is not followed, no matter how good itis ‘Trading is simple, but our human behavior makes it difficult > Greed, impatience and a lack of discipline are the three killers in the trading industry. Most of the people never overcome these three killers. ‘ Amateurs think that the higher the accuracy is, the higher the profits, which is not true > Greed, for example, can easily lead you to ruin, even with a strategy that has high accuracy > For example, if an amateur has many winning trades in a row, he will start overrisking and become greedy and reckless > If he now loses a trade on which he overrisked, he will try to make that lost money back and that is the point when the emotions come so strongly into place, that they will lead you to sure ruin ‘Professionals know that bigger capital in combination with proper trading psychology is what leads to bigger profits > They do not become reckless, no matter what and keep control of everything > They have a systenvrules that limit their own potential to self sabotage themselves‘ Characteristics of profitable traders and everybody else: > > > > Rollercoaster equity curve (no system/plan) ‘Gambling (relying on luck instead of a system) Thinking on a trade-by-trade basis (the outcome of every single trade is of highest importance for them) They do not truly accept the risk (overrisking) Are not able to recover after a simple losing streak (self-sabotaging sets in) © Characteristics of consistently profitable traders: > > y v Steadily rising equity curve (with system/plan) Trading property (not relying on luck, even if it helps at times) Thinking over a serious of trades (the outcome of every single trade does not matter, what matters is the outcome of a series of trades) They truly accept the risk (managing risk) Are able to recover after a simple losing streak (limited self-sabotage)Funded Trading Institution Trading Psychology: 3 Main Components of the Mindset of a Professional Trader Notes: 4 The 3 main components of the mindset of a professional trader: > 1, You need to develop the proper psyche, develop good habits and follow them consistently to gain discipline because it all transitions to your trading (your results in trading reflect your personality). It is the most important aspect in trading. > 2. You need to be robotic and systematic, trading is mostly preparation (you need to make sure you have a system that provides you a mathematical edge). “Emotions have the power to reduce and even shut down the decision making process entirely.” (from the book “The Mental Game of Trading"). You need to make your process of making decisions systematic, to leave no room for unnecessary thinking, which provides for self-sabotage in the end > 3. You need to have a probabilistic mindset and detach from the outcome of trades, because as long as you followed your system, you did the correct thing. Individual trades are not important, what matters is the series of trades (over which we will mathematically end up profitable because of our edge in the markets).Funded Trading Institution Trading Psychology: 3 Common mistakes Amateurs and | have made 1/29/23 Notes: ‘ The 3 common mistakes amateurs and Palden have made: > 1, Most traders do not have an edge. They do not have a consistent approach and let their approach be constantly influenced by subjective things (by their current P&L, for example) Even if you have great trading psychology, are focused and even in the zone, without an edge, you are not going to be profitable. We, for one, know that over a series of trades, we will be profitable with our edge, so we just need to stick to it. > 2. Most traders have no accountability. In trading, we have no one to keep us. accountable, no boss. No one can blame us for our actions. If we make mistakes, it is always on us but discipline is needed to make ourselves accountable for our actions. Reprogramming of the subconscious mind by always following our system, no matter what (because the more we do something repeatedly and consistently, the more it burns itself into our mind), is needed to achieve accountability. Once your subconscious mind has been reprogrammed and the discipline has been burned into your mind, your mind will strongly refuse to not adhere to your system. > 3, Most traders are too impatient. They follow a high risk high reward and think short-term. They want to become rich quickly, in a couple of months or even less. By repeatedly doing this, they engrave this kind of mentality into their subconscious mind, which makes it very difficult to leave behind. They are risking the entirety of their trading career in a single session/day/week/month.Funded Trading Institution Trading Psychology: Sunday Psychology call 2/12/23 Notes: ‘ Don't change what you normally do in bad market conditions, such as switching your trading pairs because they are not a setup. > In such times you need to sit back, relax and wait for better market conditions > You need to figure out and determine when the best time to trade is and then take action at those specific times (market conditions) ‘ Don't even think about changing things just because you are on a losing streak, with time and experience you will build confidence > Your confidence will come from all the periods of drawdown you have negotiated your way out of and survived > Eventually you will always get out of losing phases if you stick to your system, they are part of the game. > A.drawdown is like taking a step or two back and then several steps forward again ‘ Don't be fooled by social media showing and touting unrealistic results, such as 10% every month ‘ Avoid important news like CPI, FOMC and NFP, before these news there are usually low probability conditions and markets only consolidate/move erratically ‘ The best times to trade during the London and New York session 4 The best entry time frames are the 1-hourly time frame and the M15 time frame.Funded Trading Institution Trading Psychology: Top 3 lessons learned after blowing 50+ challenges 3/19/23 Notes: ‘It's amazing how easy it is to make incredible amounts of money these days using prop firms and how the challenges are getting easier by the day (no time limits, ‘smaller profit targets, more allowed drawdown, etc.). ‘Psychology isn't everything, but itis an important part of trading > Ifyou don't have an edge in the markets, you won't be profitable > One does not work without the other, because even with an edge in the markets, without the right psychology, you will not be able to achieve consistent profitability ‘The top 3 lessons > 1, Most people rush the process and try to pass challenges by going all out in the first week. You need to have a plan, a system and take it slow, and even if you don't reach the goal in the end, you can make use of the last week cheat code explained in the course. > 2. Ifyou try to gamble your way through the first two phases and tell yourself that once you have a funded account you will strictly follow your trading plan, trade with discipline and lower your risk, you will not be able to stick to it because those bad trading habits will have become ingrained in your subconscious. Do not forget that 8-10% every month consistently is not realistic. Itis very important to approach funded accounts with good trading habits so you can maintain them once you are funded. Also, once you are funded, don't fall into the emotional trap of thinking about it being "real" money now and imagining how much you could make if you over leverage on a very clean setup presented and end up losing your account. > 3, Use the last week cheat code instead of wasting the amount of allowed drawdown left. Also, most people get greedy and want to get the challenge over with quickly once they are in drawdown, even if it is a small drawdown At least try to get to break even again and aim for a retry/extension. ‘ There are 3 mountains in this game. > The first is reaching funding, which is the biggest mountain. > The second is reaching the first payout, which is slightly smaller. > And the third and last mountain, which is the smallest, is keeping the account. > Ifyou feel greed during the third mountain stage, start another challenge and Put it there instead of risking losing (maybe even your only) funded account.Funded Trading Institution Trading Psychology calls w/ Special Guests: Paladin x Omar Trading Seminar Notes: 4 Don't let social media negatively influence your trading and isolate yourself from the sources that want to mess up your trading and emotional state and make you want to risk more, force things to happen and make your own seem meaningless and insignificant, > Many of the people on social media are not only fake, they also mostly or exclusively post their wins and show their good times and never the bad. > Trading is a journey that goes through all phases, you will have good months, bad months and stagnant months ‘ Don't let your emotions dictate your trading, emotions are part of human nature and can't be eliminated, i's natural to have emotions but you can't let them control your decisions and actions. > The only way to control that constantly and sustainably is through discipline.Funded Trading Institution Trading Psychology calls w/ Special Guests: Paladin x Jade Cap ( Psychology, Charts, Q&A) / Full version Notes: 4 In the book "No Excuses" by Brian Tracy, it is explained that the #1 principle of success, without which all other principles of success become useless, is self-discipline; doing things you should do whether you want to or not. > For example, if you wake up in the morning and need to clean your house but don't feel like it, the difference between a successful person and an unsuccessful person is that the successful person does it whether they feel like it or not, The same is true for people who go to the gym; they do it because they have to, even if they don't fee! lke it. > It's the same with trading; if you don't follow your trading rules, everything else becomes useless. ‘ Some days you will feel like breaking your trading rules and not following your system, but a successful trader will always stick to it > Your trading plan and trading system must be adjusted to your strengths and weaknesses + You need to prepare for the trading session the day before because if you don't, you will be unprepared and you won't know what you will do, how you will do it and how you will react to certain situations, > In the morning you should have daily affirmations; negative talk about yourself is the least you should do in trading, you need to trust yourself and have self-confidence. ‘ Everything you face is a challenge in the beginning. > In trading, it's how you respond to challenges that matters > Some people, as soon as they are faced with a challenge (losing streak, drawdown), start switching to other systems, doubling down on risk, and changing things that weren't the problem to begin with, external things, rather than internal. > You need a proper guide to follow when trading so you can grow in a safe environment. 4 Professional traders crawl out of a drawdown, they don't sprint out of it. ‘If you don't feel fit enough in the morning, take a break from the markets and don't trade ‘ One way to be more selective when trading is to have 3 poker chips on the table, representing 3 trading opportunities you allow yourself a maximum of per week > A professional poker player will not play every hand; not trading too much and focusing on At setups plays an important role in trading success. ‘ Just as you have a technical advantage in the markets, you must have a mental advantage and maintain and manage your mental capital> Once you figure out your mental edge, find an accountability partner for everything you do. Playing the process is the key. If you focus on the outcome instead of the process, your expectations and desires will make you see only what you think and not what is really happening in trading right now. Ifyou go into a trading session with negative emotions like feelings of revenge, you will inevitably fail to follow your rules and violate them. > Ifyou then lose again, there is a possibility of getting into a negative cycle/spiral with devastating consequences, which you will then have to get out of. All successful top traders lead a balanced life, with family, sports, nutrition and all other important aspects of life Artule that says after how many missed setups you end your trading session can be very useful from a mental point of view. Many people overestimate what they can achieve in a year and underestimate what they can achieve in 5 years. Before you start full-time trading, ask yourself the necessary questions (what will | live on, how many expenses will | have, how much do | need to earn, etc.) and plan everything so as not to be surprised by unexpected and avoidable difficulties, > Prepare for everything and do not do anything unplanned.