Successful strategies use highly disciplined trading plans.
In the short term, the markets are run by the majority who are reacting to the emotions of fear and greed. It is “comforting” to be moving along with the crowd. That is why the majority do it. But it is NOT profitable.
The “majority” do not profit.
Executing a trading plan using unemotional buy and sell signals, designed to capture the majority move of all major trends whether up or down, removes destructive emotions from the equation.
A Trader may feel the pressure to disobey the plan. He may be swayed by advice from friends, current events, or the extremely powerful emotions of fear and/or greed. But by sticking to a trading plan that NEVER misses a trend, you will profit over time.
I’ve seen four types of profitable traders. What kind of trader are you?
Profitable Discretionary Trader
The first type of profitable discretionary trader is the one who has a natural feel for the market. When you talk to one of these traders and ask them about their trading at some point you’ll hear them say something about ‘feeling the market was this way or that….’. These are traders who over the years have acquired a lot of implicit knowledge of the market and its participants. They understand what moves markets and they also have the required self-trust to act on their ideas and to protect themselves when they are wrong.
The second type of profitable trader – or more accurately temporarily profitable – is the lucky trader; the trader who’s P&L is currently in an up swing but they’ll soon be negative. Often these traders either got lucky with a number of trades and can not replicate it, or they learned the habit of holding onto losing trades and they got lucky when those positions came back. This accounts for the largest number of “profitable traders” – but for these traders the money often leaves faster than it arrived.
Discretionary Mechanical Traders
The third type of profitable trader is the trader who although they are discretionary, they’ve developed some mechanical rules for entry and exits and are able to follow their rules most of the time. Consistently following mechanical entry/exit rules and are always profitable in LOng Run
Social Media Profitable Trader
The fourth type of profitable trader is the one who are only profitable on Social Media sharing screenshots.