Hey hey: what's up my friends, so in today's episode i want to share with you five things right that you should start doing as a trader number one think independently. So what do i mean by this right and it's very simple right. The way you want to think independently is to ask why why rainer so, for example, let's say you know, i i share with you a trailing stop-loss and i say no to trailer stops using the 50-day moving average right. You don't want to be asking.

You know you know what is the best moving average settings to trail, your stop-loss and stuff, like that, you don't ask yourself right: why did rainer choose the 50-day moving average? So when you think about that right, it might be because the market is in a healthy trend and it seems to be respecting the 50-day moving average. That's why he's using it to trail a stop-loss or maybe he has done some uh back testing and find that you know the 50-day moving average works best. So when you ask why right, you will have multiple answers to that questions and when you get multiple answers to that question right, you can, then you know, use those so-called answers that you have. You have come up with to validate it on your own right.

Maybe you do some your own back testing your own research and see whether it holds true or not. Instead of asking, you know: hey right now: what is the best moving average settings, if i tell you say: 200-day moving average and you take it at face value, and then your learning process just shut down and it's it's over right. So you don't learn anything by asking. You know what when etc.

You learn most right by asking why? Because when you ask why you will get answers to your questions and from then on those answers, right can be the basis right for further. You know uh work of validation down the road for you to explore, and this brings me to my second point: get your hands dirty right as a trainer, you, you have to be prepared to get your hands dirty, for example, if you want to be the best Chef in the world you have to be in the kitchen right. You know cooking right. If you want to be an uh, a 100 meter sprinting champion, you got to be out there right running.

If you want to be a bodybuilder you're going to be there lifting weights, and if you want to be a professional trader, you got to be there right. Getting your hands dirty, validating your trading strategies, doing back testing forward testing et cetera! You got to get your hands dirty right. You don't see that, for example, the top bodybuilder in the world right asking an opinion of maybe a second tier bodybuilding. Oh hey! What should i eat? What's my diet and stuff like that, no they get their hands dirty.

They experiment right to see what food works best for them. They experiment right and push themselves to the limits and see how heavy they can lift their weights. They get their hands dirty and it's the same for training. There is no such thing as someone who's going to spoon feed you and tell you: what is the best strategy, the best settings that you should do? No, you got to do the work yourself, research validate back test forward test.

These are kind of these. Are the work right that will make you progress as a trader right, get your hands dirty if you're looking to you know, have you know, wipe your hands off, just wait for the good stuff to come to you you'll, never make it as a trader. I'm honest! I'm being serious down here next, one right number: three leverage the work of other traders before you right. This helps you to reduce your learning curve right.

This can be in the form of reading uh. You know books listening to podcasts blogs, et cetera. So let me share with you how i leverage the work of other traders, so there are a few traders that i respect and i follow, like you know, uh andreas keleno, who we wrote following the trend nick red. She wrote the unholy grails and a few others, and what i do is i study their books right, their works that they publish out there right.

I read it and they share. You know trading systems right in their books. What i do is i take the concepts of those systems and i go and backtest it and validate it to see whether those concepts work if it does great right. I can then take those concepts right and tweak it right to a trading strategy that i'm willing to trade.

So that's how you leverage the work of other traders so, for example, if you're watching my my videos right now and you find that you know my price action trading, uh stuff right - make sense to you, then take those concepts right, develop it into your trading plan And validate it to see whether it works for you right, don't take what i say or any other traders what they say right at face value. You have to do the work you have to get your hands dirty, as i mentioned previously, okay. Next one number four respect the markets: markets can do anything really anything right. The market can be in an uptrend, a downtrend, a low volatility environment, a range etc, and, and if you learn to respect the market, if you believe the markets can do anything, then what you'll do is that you will manage your risk.

You will have a plan for exit right like in terms of maybe setting a proper stop loss, or maybe you know, having a way to manage your risk, because, honestly, stop loss. Isn't the only way to manage your risk. You can use a time-based stop-loss. You can use a portfolio rebalancing method.

There are numerous ways to you know, manage your risk, even options right, which are which i seldom talk about. That can be used to manage your risk, but whatever the case is right, you must respect the markets, because only when you respect the markets, will you respect risk? If you think that you know what a market is going to do right, you're, confident of your own trading strategy, your entry whatsoever, you don't respect the markets, then that one time right when it hits you pum hard right, you lose everything and more! And that's because you don't respect the market, so always respect the markets, respect risk - and this brings me to my final point - number five project, the worst and work backwards from it. So what do i mean by this right? Let me repeat once again right project the worst and work backwards. So what this means is that, let's say you're trading a strategy, and you know that historically, that strategy, you know, has a 25 drawdown maximum drawdown, for example.

So what you want to do is that when you trade that trading strategy, you know ask yourself right: if this trading strategy has a maximum drawdown of, let's say it's worse than 25: maybe it had a 40 drawdown right, because 25 is just a maximum historical drawdown And in the future that drawdown will get worse, maybe 30, maybe 40, and then you ask yourself what if this trading strategy goes into a 40 drawdown? What will i do? Will i continue trading it? Will i be prepared right to lose 40 of my capital, so this is what i mean by you know: project the worst and work backwards from it. Another example: let's say you put five five hundred thousand dollars with a broker. Then you ask yourself: if this broker goes barely up and i lose that five hundred thousand dollars with that broker. Can i live with it? Well, if you can't, then clearly, you know you shouldn't be putting five hundred thousand dollars down there.

Maybe a hundred thousand, maybe three thousand down to a point right where you are comfortable with it. One more example: let's say in trading you put on a trade right, a stock, a stock buy trade, and maybe next week there is an earnings report, there's a possibility. It could get 30 40 against you. Then, when you put on that trade, you ask yourself right: am i comfortable? Can i swallow right that potential 30 gap against me? You know if the news reports comes out.

If you can't, then you know bail out of your trade right before the earnings release, or you know, reduce your position size down to a point where, even if it, you know gaps 30 against you right, that loss is still contained. So this is what i mean by project the worst and work backwards from me right, and this is what you must do as a trainer, because in trading right we are dealing with probabilities right. We never know what's going to happen ahead of time, but what we can do is to anticipate right, the worst case scenario, and if that happens right, what is our so-called contingency plan right? This way, you know nothing will ever you know caught us catch us off. Guard again make sense.

So as a quick recap, here's what we have discussed today, number one think independently right ask: why number two get your hands dirty, you have to you know validate. You know the concepts and strategies that you know. You come across number three leverage. The work of other traders could be via podcast, books, blogs, etc.

Number four respect the markets, respect risk and number five project, the worst and work backwards from it. So with that said, i wish you good luck and good trading. I will talk to you soon. You.