We all play “Games” in different areas of our lives. There is the game at work that follows certain rules for moving up the career ladder. There is the education game we follow to earn good marks to then get a good job. There is also a wealth game, a health game, a politics game, etc.
The capital markets are no different. Markets represent a big Trading Game with some players winning huge amounts of money and others losing huge amounts. How do you position yourself to best benefit from this game? How do you play to win your game within the bigger game?
Every game follows certain rules and those who set up the rules control the game to their advantage. Just imagine: if you could set up the rules of a game that everybody else had to follow, wouldn’t you do it for your benefit?
The capital markets are an example of an infinite game which is never supposed to end. This game brings in new players over time. This aspect is crucial to understand – as you and others probably came in to the game as unprepared traders. Realize that the rules of the capital markets are set up for the new small trader to lose!
The rules of the bigger game motivate you to jump right into the live markets taking many trades, without using a trading system. New traders shoot at anything that moves and trade the markets around the clock so as not to miss out. Doing this, however, causes you to think you constantly missing the good trades and good profits. You probably feel confused and overwhelmed. As you get more and more stressed, your self-esteem drops away and your trading losses grow. Besides encouraging a poor mental state, your trading is not a winning game! You are likely making consistent losses that will force you to exit the trading game at some time.
Thus why don’t you stop and think: whose game are you playing?
In contrast, you could be “in control” with rules that help you make consistent trading results. You could play a winning version of the trading game where you feel good and strong about yourself. How can you tell if you are playing your winning game, when you are trading well? You will feel the 3 C’s – Cool, Calm, and Confident.
Now I am well aware that playing your winning game is easier said than done – but there are a few simple steps you can take. The following four steps are the major ones in a structured growth process for traders I developed for you to move up your Trader Development path.
First, find or develop a few trading systems that fit you: If a system fits you, you will be able to execute the rules flawlessly after you have put in some focused practice time. You can accelerate this process of learning a system’s rules by following the principles of Deep Practice using a trading simulator (see for more detail “Deliberate Practice Helps You In Achieving Trading Mastery”).
Second, define your Personal Trading Game: After you have learned to execute your rules flawlessly, you can then move up a level to establish the rules of your Personal Trading Game stacking up the probabilities for you to win. As a starting point: think about what timeframes you want to trade, how do you incorporate trading into your life/work schedule, is trading with alarms more suitable for you than with pre-set trade orders, do you need a fully automated stop trail taking care of your open positions, what is your weekly R-goal and what do you do once this is achieved? Once your trading game is defined and implemented, learn to follow your rules efficiently while you are executing your trading system flawlessly.
Third, establish your Live Trading Process: This will be your daily/weekly/monthly process for trading the live markets. As you build your winning process, it will support you in generating a stream of good trades from several systems with an overall positive expectancy to reach your weekly and monthly R-goal (see for more detail “Good System Relies On A Robust Trading Process”). The same way as you do not bridle the horse from behind, you cannot expect winning trades consistently from the very beginning – although most traders do expect that.
During these three steps, you will progress from simulated trading to demo account trading to finally trading the live markets with a real money account. These steps takes a little time, but you can easily track your progress as you move forward.
To sum the individual steps up, the order of progression is:
(a) Find a few Trading Systems that fit you
(b) Learn to Flawlessly Execute that System by applying Deep Practice
(c) Define your Personal Trading Game that makes you win the game
(d) Establish your Live Trading Process and make it efficient
(e) Take Winning Trades as you flawlessly execute your Trading Game.
Once these steps are mastered, the fourth step then involves the trader to move even further up his trader development path by becoming an Independent Trader following a unique trading style (see for more detail “Three Keys to Reaching Your Full Trader Potential”)
Everybody’s trading game is different – even when different traders use the same systems. Different traders will slightly adapt and trade the same system according to their individual skills, circumstances, and preferences.
Below are some examples of very successful traders who have recently completed their trader development path once they had attended my Workshop. All of them became mature traders (reaching expert stage and higher) within 6-8 months after having completed the workshop. They have all developed into Independent Traders executing their Personal Trading Game profitably. I am very proud of them.
Trader1: Full-time trading short timeframes
Wojtek from Poland attended the Futures workshop last fall and found his passion trading very short timeframes – charts with 5 second, 15 second, 1 minute and 5 minute bars. Having been a complete trading novice before the workshop, he has been very fast in becoming a mature trader. Within less than 6 months he was able to consistently outperform his weekly R-goal executing his game. He now trades the market full-time.
Trader2: Part-time trading after a full day of work
Jamie is a full-time practicing medical doctor in Australia. He trades both Futures and Forex after work for about 1 – 1½ hours per day 3-4 days per week. This is all that his busy schedule allows him to do. He trades the lower and medium timeframes (1, 5, 15, 60 and 240 minute charts). Despite his limited time available for trading, he regularly generates +20R to +25R per week. In this last week (August 15-21, 2021), Jamie generated an astounding +63R result.
Trader3: Full-time trading the higher timeframe swings
Rui lives in California and trades full-time both the Futures and Forex markets. She has many interests and responsibilities in life so she decided to trade higher timeframes (mainly 60min charts) with the goal to transition them into long-term swing trades. She has generated some breathtaking results holding, for example, long positions in gold and silver for several months using System 1 and System 2 with double digit R-multiple gains. From her own trading experience, Rui has coined the term “cool, calm and confident”. Rui talks about her experience developing as a trader and her winning version of the Trading Game in this 9-min video: https://youtu.be/LyI0IBX5fRE.
Trader4: Part-time trading the markets as a 3rd business
Steve is a successful entrepreneur in the US. He loves trading but treats it as one of his businesses, actually, his third business. Steve allocates about 3 hours per day to trade the Futures markets and prefers to trade medium to longer timeframes – 60 minute bars and higher. Steve was profitable from the time he started trading the live markets.
Where are you right now in relation to perceive Trading as a Game?
Wherever you are, that’s the best place to start your journey and make progress.
Above, I mentioned some steps to set up a winning version of your Personal Trading Game. If you did create your own winning version of the game, imagine feeling Cool, Calm, and Confident and being fully in control while trading. Imagine winning in whatever ways that looks like for you – trading part-time or full-time, trading short or intermediate or long term charts.
I can assure you, the market is big enough for everyone playing their own game to succeed in different ways.
You just have to take the steps to develop yourself as a trader – and then WIN.
The Market Rewards You with BigRs, But…
Independent Trader: Three Keys to Reach Your Full Trader Potential
Trading Visual Price Patterns is a Bit Like Hunting for Fish
How Your Learning Type Determines Success (Part II)
The Trap – And How My Cat ‘Dolfi’ Got Caught
Become the Hunter Yourself
Deliberate Practice and Trading Mastery
A Structured Approach to Trading Mastery