How to be a CONSISTENTLY PROFITABLE trader? In this class Gabriel Fernández-Álava explains that it is not enough to know the markets, we must also have a good mental attitude, know how to manage risk, and be aware that losing is possible.

Video transcription

Lack of mental structure is the number one reason traders fail. To be a profitable trader, when you already have a consistent mindset, you have to learn to understand market structures.

We are going to talk about the natural human trader who is the human trader with the equipment with which he come...

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Lack of mental structure is the number one reason traders fail. To be a profitable trader, when you already have a consistent mindset, you have to learn to understand market structures.

We are going to talk about the natural human trader who is the human trader with the equipment with which he comes into the world, with what comes from the factory, and then we are going to talk about the evolved human trader who is that human being so aware of his limitations When it comes to trading, due to his own physical, intellectual and psychic makeup, that at some point he has become afraid of himself and has convinced himself that he cannot be a trader, that he is not worth trading.

Lack of mental structure is the number one reason, according to all the psychologists in the world who understand this, why traders fail. That is, if I am mega trained, I know about everything, I even transmit it, but afterwards I am terrible in my execution, there is a problem. Therefore, we natural human traders have an intellectual capacity that allows us to assimilate concepts, but we do not have the remotest idea of ​​how to succeed in a market as complicated and competitive as the financial market. Even great systems with a high percentage positive expectation can perfectly fail because the trader does not have the proper frame of mind. One very important thing about Japanese candles in trading. With respect to the guidelines, as with the technical figures, what does a trend change imply that has to exist previously? a trend for something to change trend there must be a trend. This is essential because on many occasions in nobody's territory, even in side scenarios or in mini trends, what might seem like guidelines will appear to us, however they will not be because it is essential that there is a previous trend.

To interpret Japanese candlestick patterns, you have to look for consistency. For me the keywords in technical analysis are; trend, stop-loss and there I also logically include the dynamization of the profit statements and coherence.

As we are not equipped we have to work hard to become a CPT: Constant Profitable Trader, a constant and profitable trader. To make money with trading and become a CPT you need all the knowledge, but in addition to the mental structure, you have to know the market structures, know how they work. If you know in depth the market structures because you are a theorist, because you were born for this, but you do not know how to apply it, you are lost. So how can you be a profitable trader? What kind of what kind of unsuccessful natural human traders are there? Those who say: this system does not work for me, I will try another, this other one does not work for me, I will try another, they have told me about the Ichimoku cloud, I will study the Ichimoku cloud, they have told me about Bollinger bands. studying the Bollinger bands ... but they are making mistakes, they are filling their head with noise, with chaos. They are traders who are not mentally equipped to do this job, but no one is equipped to do this job. I insist, we do not come from the factory with this type of knowledge, baggage; Therefore, going from a natural human trader or from a natural human trader to an evolved human trader requires enormous work, enormous effort, enormous sacrifice and enormous suffering because all work and effort costs sacrifice and involves certain doses of suffering.

In my personal case, I really like to study. I really like to read, I am super curious, but I am the least disciplined person in the world. This is a job and you have to have a very specific background for it. Others who fail are those who do not quite accept their risk profile; In other words, trading as a professional job is constantly living in an environment of uncertainty. I'm sorry, but here if you want guarantees, go find them in another job. This is an environment of permanent uncertainty. Then there are others, and this has happened to me, who do not work well because they are afraid of winning. The reasons why many people do not succeed at this: traders who need a specific set up. Most traders live in the never-never world, which is the never-never world, these traders always have reasons to justify why the operations have gone wrong and they go even further, when a trade has been done wrong but It has turned out well, they have been lucky, they generate a whole theory of why they have done it wonderfully. They are as far from reality, as far from the ground as Apollo 11 was before it exploded. The human trader also follows that English aphorism called fight or flight fight and if you don't like the fight, get out. And we do both: we fight where we don't belong and we get out of the operation early. We are permanently in the fight or flight or we are fighting or we are flying, but we are not where we have to be. Persistence is fine, it is a good gift, it is a good quality in trading it is not much use to insist on the same mistakes all the time in trading is not going to get you absolutely anywhere.

There is one thing that dominates us in our path is to be CPTs and that is to avoid uncomfortable situations, this also goes our birth baggage: you avoid an uncomfortable relationship, you try to avoid a disease, you try to avoid things that hurt you; Any situation that causes you discomfort is something that makes you very nervous and yet we are trying to work on something that constantly generates that every day of the year. If you want to know how to make money with trading, you have to be clear about where we are getting, not only the uncertainty and randomness of the market, but an environment of permanent discomfort because placing an order is an act of faith. You can have studied all you want, but when you hit the button and get into the market that is an act of faith and when it goes against you you start, what I call: prayer trading. Jesusito, Jesusito that I do not skip the stop and you start to promise novenas to the Immaculate Conception and I go on my knees to Lourdes but that I do not skip that I am going to lose a pasta. You make that leap of faith and you get really nervous. On the other hand, when you are in an operation and it goes in your favor, then you relax. Gold medals are beginning to appear, your clothes are tight because you are widening with satisfaction and it continues to rise: 200 dollars, 300, 400, 500 and you begin to generate theories to help others. You say to yourself: I'm going to get a thousand euros in an hour, how many people work for a thousand bucks for a whole month? And then you become a patron to help the poor. But suddenly the trade turns around. Then you stop being a patron, your clothes start to get too big, the sweats start, all the medals fall ... That goes down, down, down, down and if you don't have a plan and suddenly it turns against you. If I leave when there is still something left, it is as bad as if I allow my ego to prevent me from leaving when I lose, because it must necessarily turn around again.

One thing is as bad as the other. So, in addition to the environment of uncertainty, the randomness of the market and our natural tendency to flee from uncomfortable situations, we have to learn that we are going to lose. A great tennis player used to say that to learn how to win you first have to learn to be a great loser. To make money with trading we have to learn to lose, absolutely nothing happens. It happens when I lose because I have not done things well, it happens when I lose because I have not prepared the trading session well, it happens when I lose because I have done revenge trading, it happens when I lose because I come back from a wedding with three drinks and I'm going to have a look at the market. The hardest thing we have to fight against is our own ego, which is the biggest thing we have. We have to stop looking for the holy grail. A well-known trader who told me: I just discovered the holy grail of trading, and the holy grail of trading is that traders are ordinary people; and I loved that.

If we want to be a profitable trader, we cannot seek the holy grail by constantly looking for something new. Although you are always training you will not be constantly looking for new things. In addition, there will come a time, and volume is a case, in which with a deep knowledge of how to trade with volume you have absolutely nothing else to learn because you are knowing the market in its structure and in its depth is that there is nothing plus. From there it is you who has to do things, it is you who has to manage your operations, it is you who has to make the decision of where to enter and why to enter; In other words, you do your market preparation for the day and you make two or three hypotheses and I am going to let what has to happen happen. So I sit in front of my table with my hypotheses, having done a market study, and since that doesn't happen, I don't trade. So boredom is of such a caliber that it almost costs me an illness, many hours in front of a screen without doing anything. It is very hard work, but this is what professional trades do: 2, 3 hypotheses and I will only enter if some of the hypotheses that I have raised are confirmed, but there is no hypothesis n, it does not exist and you do not know if it will to pass. If the hypotheses I have raised are not confirmed: I do not trade.


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