Hey hey, what's up my friend, so in today's episode right i want to share with you five of my biggest aha moments in trading. So i'm sure you have probably experienced this. You know at one point or another watching some video reading, a blog post and you've got a light bulb moment. You read it.

This is like you know man. I didn't see this before now i get it right, so so yeah, i'm gon na share with you. My own five of this aha moments in trading number one is this: is that you don't have to win often in trading. This means your trading strategy doesn't need to have a high winning rate to be a profitable trader.

So this experience came back in uh. I can't remember exactly i'm guessing sometime in 2011, 2012. Okay. So what happened is that i am long, the dollar yen.

I remember it's on the one hour time frame, it's a false break, set up on the one hour time frame so this well. This is way back right, almost nine years, ten years right. So i long on the falls break set up on a dollar yen and the market. Pretty much went in my favor pretty quickly.

I think when i went to bait that nine right, i was up about one to one point, five hour, all right, uh in profits, so meaning, if i risk let's say a hundred dollars, i'm up about hundred dollars right, there's a profit of one hour and the Next day, when i wake up right, i quickly check my phone. I realized that my profit right exploded right instead of a one hour, profit i'm now up 10 r, so meaning it's now, a thousand dollars profit right. If i, if, if i raise 100 on the trade, now i'm up a thousand dollars ten time, my initial reason, i thought man what's going on right and i realized. Actually, what happened is that the boj the bank of japan interviewed the market, so they they bought dollars and sold yen.

It was a massive, huge up spike and i happened to be caught in the right direction and that one trade right propel right. My account strongly into the green and that hit me and that's when i realized man, you don't have to be making money on every single trade. You don't have to be making money on 70 of your trade 60 of your trade, because you can make money on. Let's say 40 of your trades, but if your winners are large much larger than your losers, you can still be a profitable trader in the long run.

So that was my one of my first few. Aha moments is that you know you don't have to win often, but you want to make sure that when you win right, you want your winners to be larger than your losers. Okay, so this is where uh we. This is where it's kind of similar to trend.

Following adopting a trend following approach, so so yeah, basically, if you are going with this approach, a trend following approach, you don't have to win often, but when you win right, your winners are usually larger than your losers. Okay, so that's one of my aha moment. Second thing is: it is that you want to trade, multiple uncorrelated trading strategy, slash systems right to improve your trading results. So what i mean by this is that, let's say you trade, a solely trend following system right where you trade trend, following in the fx and futures market in crisis period right, you will do pretty well right, because that trading system takes advantage of.

You know panic in the market: greed in the market, fear in the market, so usually during crisis period, like 0809 financial crisis uh, maybe even the the 2000 dot-com bubble right during financials panning in the markets right trend following systems tend to do well, but in normal Market times or this system kind of you know go into a double drop, they don't really perform exceptionally well. So if all of your money is in trend following system, then you know what you can expect is you know, periods of you know good money, making opportunities during crisis period and in normal times the system just go. You know like a little bit quiet. So what? If you actually take some of your money right, let's say 50 of your original amount of money and put it let's say in the stock markets trading a uh momentum, stock trading system.

So now things are a bit different because now, let's say if the stock market, it's bullish, it's strong. This stock trading system will perform well and if the stock market goes into a recession, it's in a crisis. Your trend, following system will do well. So when you combine these two uncorrelated trading systems, your overall portfolio equity curve is actually pretty smooth.

It's gon na be much smoother right compared to just simply trading a trend following system make sense yeah. So this is a really, i think i would say in for advanced traders right, if possible, right, adopt multiple uncorrelated trading systems, trading systems that trade different markets. Well, that's a powerful one. Okay, the third thing you need money to make money in trading, so this is something that uh took me a few years to figure that out right.

Initially, my plan was that i'm just gon na take a 20 000 trading account uh trade full time, uh make about 20 a year and i can sustain, but after which it kind of dawned on me that you know making 20 a month. Uh that's possible, but i have a huge risk of blowing up my trading account so after which i kind of realized. Realistically, that's not really a path that i want to go down into, so i figured what's the next next best option, so i started studying you know: successful traders, fund managers and i kind of realized that when they set up a hedge fund, when they trade right, They do it with a decent size of money. You can't do it full time or you can expect to make a lot of money if your trading account is like 500, a thousand dollars just mathematically speaking right, you know, even if you make like 50 a year, a thousand dollars account is only 500 a year.

So mathematically speaking right, you know that taking a thousand dollars into six figures or seven figures, unless it's by fluke or by luck right, otherwise right, you will likely blow up that trading account. So if you want to, you know make money in trading, you need money. If you look at warren buffett right, he bought a insurance company right and using the company the premium right to actually invest in the market. So correct me: if i'm wrong, i think that's the path that he took in his early days of uh investing.

Then, if you know h, fund managers raising capital from the financial markets to set up the hedge funds right. Why? Because they need money to make money in trading or investing all right. The fourth thing different markets have different behaviors. Okay, so often you heard of the saying right, you know rainer the market trends, thirty percent of the time and seventy percent of the time is in the range - and i just kind of took that statement at face value right.

I didn't really look too much into it. Oh yeah, that's true! Thirty percent of the time it's trending seventy percent. It's in range, look at the charts that make sense, but when i do some research and development right behind it, i want to credit to andreas uh. Unger andrei unger for this uh this technique.

What he did was that he studied the behavior of different fx markets and he realized that different markets have different characteristics, for example the pound dollar, the poundian. These are trending markets. So how do we define this as trending market? So let's take pounion for example. So what he does is that he did a simple back test and whenever the poundian break above the previous day high, if he realized that this market tends to continue higher or when the pound yet breaks below the previous day low.

This market tends to continue lower and he found out that hey you know pound yet is a trending market. It tends to have a follow through, whereas on the other hand, let's say the aussie canadian, that's a mean, reverting market, this market, whenever it breaks above the previous state high, it tends to reverse down lower and whenever it breaks below the previous day low, it tends To rebound higher, so you can see that different markets, they have different, behavior different characteristics, and if you have access to this information right, you can actually realize that you can use this statistical data to your advantage right. Because if you know, if you're buying a breakout on the market that has a trending behavior, guess what the odds of that breakout working out is much higher compared to buying a breakout on the market with a mean, reverting behavior yeah. So that's one of my aha moments as well right, realizing that different markets have different behaviors and finally, the last thing is that i realize that some of the best traders out there they have multiple source of income.

So initially my thought is that you know if you're a trader, you can only you know, make money from trading right. Otherwise you know you're fraud right. You know you're, not trader yada yada and i realized when i studied some of the exceptionally good traders out there. Those with the longest track record, i realized that trading isn't their only source of income right.

They, for example, let's look at market wizards. You have mark minerville, he's one of the popular stock market. Visitors out there right, i'm pretty sure, he's a consistently profitable trader. At the same time, he has a subscription fees to his.

I think private feed or something like that. Then he has a weekend training course right. You can see that he has multiple source of income. Even my income from his books, i'm not surprised or how about adds a quota or another market wizard.

He has some kind of a trading tribe, there's a monthly subscription as well. I believe you know he makes some money from there as well and yeah. Really, if you just look around you, some of the best traders out there, they don't just make money from trading right trading is uh, just one source of their income. So as much as possible.

Right i mean if you love trading great right, but why not use trading trading right to help you develop multiple sources of income? Maybe you have money from trading, you can, you know, go into property, investing or whatsoever. I don't know, but just some ideas for you all right. So with that said right, a quick recap: number one uh you don't have to win. Often in trading number two right.

You want to trade, multiple uncorrelated trading system right, so your equity curve is much smoother over time. Number three! You need money to make money in trading number four different markets have different behaviors and number five, the some of the best traders. I know they have multiple sources of income. Okay, so that's it! I wish you good luck.

Good trading i'll talk to you soon!.