What's up, everyone? All right? So today I have a special video for you guys on the Profit Trifecta. The Profit Trifecta is the three core components that every profitable trader possesses even if they don't realize it. And what I've done is I've separated these three core components and I've attributed metrics to each one. So you can understand as a beginner trader how far away you are right now from being a profitable trader.

Alright, so let's get into it and start breaking down the Profit Trifecta. What's up everyone? Alright, so I want to make this video for you guys talking a little bit about the Profit Trifecta. So the Profit Trifecta is a combination of three critical components to profitable trading. As you can see here, the first one is consistency.

So obviously to be a profitable trader, you have to be consistent. And being consistent means closing as many days as possible in the green and ultimately finishing as many weeks as possible in the green, and then finishing as many months as possible in the green. So the metric that we're using here is weeks of profitability. and the reason we use weeks instead of days is because it's not uncommon to have one red day a week.

Even two red days a week is not uncommon for a beginner trader, and you can still be profitable with one or two red days a week, even for me, I have red days a fairly regular basis. So instead I look at being profitable at the end of each week, so you want to have a goal of finishing each week in the green, even if it's only by a hundred bucks. Green is good. So when we look at the grades of consistency not profitable would be zero weeks of profitability, right? And then a beginner trader might have one week of profitability.

But then the next week they lose money. and then the next week they make money. The next week they lose money. so they're kind of bouncing back and forth.

Intermediate Trader: You start to put two weeks of consecutive profits under your belt. Advanced Trader: You'd have four consecutive green weeks. That's awesome. Professional Trader: Six weeks.

Plus, that's fantastic. So that's our first core component of profitability. It's consistency. Now, consistency doesn't factor in accuracy.

These are two different metrics. Accuracy is how often you're right versus how often you're wrong. So for me I strive for 70% accuracy. You can see right here.

That's kind of the the top tier. if I'm right seven out of ten times seven that Tentrees I take. That makes me feel really good. Now you can be profitable in theory with a profit loss ratio below 50% or with accuracy below 50% But the only way that would happen is if one of those trades was a homerun.

And it's not realistic for a beginner trader to be swinging for homerun trades. it's not. It's not realistic. It's not consistent.

You don't consistently hit home runs as a beginner trader, so instead we're gonna say that your minimum is 50% accuracy to be profitable, and a beginner trader at 55% You know that's okay. moving up towards 60, 65, and 70% Okay. and I'll talk about where I am with all these metrics in a moment. And then the third component of profitability is your profit loss ratio.

Now this is kind of interesting. What we do is we look at the average of all your winning trades and we compare it to the average of all your losing trades. So for instance, if you're making on average $1,000 on all your winners on the surface, we would say that's awesome, but then we want to see the average of all your losers. And if we see that all your losers are averaging a $2,000 loss, that's not good.

You're losing more on average than you're making. That's really not very sustainable. So what I want to see is that your winners and your losers are, at least for a beginner trader the same. You make a thousand.

You lose a thousand you. and for a beginner trader, we're gonna be talking about smaller numbers. You make a hundred. You lose a hundred.

That's that's your profit loss ratio. An intermediate trader starting to move up where you make more than you lose on average. so you make $150 and your average losses are a hundred. And then we move up to an advanced trader where he makes her.

She makes $200 on an average winner and loses only a hundred and then a professional trader is going to be even high. So that's what we strive for. Now, the one component that's not included in the profit trifecta is the number of times you trade and this is kind of the the one that I found that I maybe should have included and the reason is I realized that in January for instance, Mike actually scored better on the profit trifecta breakdown than I did he had a better score on all of these metrics. However, I made almost a hundred and twenty thousand dollars of profit, which was significantly more than him.

It was just a really, really great month for me. It was the best month I'd ever had. And so I asked myself Well, that's kind of interesting because my metrics are not as good as him here, but I made more money and it's because I traded more I took a lot more trades and so when you add up all of those winners, they just ended up being more so you know. Just keep in mind that that's one metric that's not on here.

However, every single profitable trader, whether making a thousand dollars a month, or a hundred thousand dollars a month, they will fall into the category here of being at a minimum an intermediate trader and most likely moving into an advanced or professional trader. So as you can see here, one of the things that I put all of our students on is having you do these scorecards each week so you can start to get a sense of visualizing where you stand on the Profit trifecta. So what is your struggle right now? Are you struggling with consistency? Are you struggling with accuracy? Are you struggling with your profit loss ratio now? I Can tell you right now that the area that I'm struggling with is actually my profit loss ratio. My accuracy has gone up to of just under 70% which is awesome.

I maxed on consistency was six weeks of consecutive profits, but my profit loss ratio was actually dipped down a little bit. and I think the reason it's dipped down is because in you know, the last couple months I started being a little bit more aggressive, swinging for the fences a little bit more, trying to hit homeruns and although I did hit some homeruns, I also had some really big losses that brought down my average loss or increased my average loss and therefore brought down my profit loss ratio. So again, this goes to show that to be a profitable trader, you don't need to be maxed on all of these. I'm certainly not and I'm very successful as a trader, but it does help me visualize what area I need to focus on and for me, it's my profit loss ratio.

All right. So I really encourage you guys, especially students who are in the class. You'll see the Profit Trifecta worksheet to fill these out each week as you're trading in the simulator. What's your consistency? what's your accuracy, and what's your profit loss ratio? And then at the end of each week, make a game plan of what you're gonna do the following week to try to improve those metrics.

Alright everyone, so I hope this has been helpful. If you have any questions, don't hesitate to reach out if you're still watching. You must have really enjoyed that video. So why not subscribe and get email alerts anytime? I Upload new content.

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