Focus on the process of trading, rather than the outcome

The Process

When I say focus on the process, I mean focus on executing your trading strategy flawlesly without any deviation. When you have a good trading strategy, you shouldn't have to think before executing it, trade execution should come without hesitation or doubt.

If you have an objective entry trigger like bullish/bearish engufing on a 15-minute time frame, then you shouldnt have to think before entering the market once you see it.

For me once I see my entry trigger I take the trade and iI dont flinch when I see price moving against me. I always set my stop loss at least 10 pips away from my entry but basically i set the stop where the stop needs to be.

If the market conditions for the day require me setting a 20 pip stop loss, I set it even if it means reducing my lot size to manage my risk.

Before entering a trade, the question I always ask myself is am I following my strategy or am I deviating? And in trading you need to be hinest with yourself, If I am deviating, I quickly retrace my steps.

To be able to have confidence in the process, you need to backtest it over a period of time to be sure it has worked in the past.

Most new traders are overwhelmed at the thought of back testing, but a simpler way to check if a pricess has worked in the past is just by viewing historical charts. TradingView is a good platform for looking at historical charts and seeing how your process/strategy would have fared on past price action.

The Outcome (Nothing Works All the Time)

No process has 100% effiiency, so nothing works all the time. To be a profitable trader you only need a process with at least a 20-35% win rate.

The idea is to keep your losses small and your winners big (the best loser wins). So, everyday when you enter a trade, do not expect to win, traders are never 100% certain, they just make an educated guess.

So for me, whenever I am in a winning trade, I dont close out early, I ride my winners. I only exit when I begin to see consecutive opposite candles forming. This (riding your winners) is the only way to remain profitable over time.

There is a psychology behind riding your winners because fear will try to make you exit early but to what I do is I open several trades then take some profit early and leave the rest to run.

Celebrate Your Losses

Your reaction to loss is what will determine if you will be in this game for long. I traded for ,amy years taing losses the wrong way. I would always try to recover immediately or I would switch bias 9if i was long, I would switch to short and vice versa).

I always kept losing money and being dribbled by the market until my mentor told me never to chase losses. My solution was simple, after a loss, I withdraw the money and go for a drink.

Yes! I celebrate my loss with a drink, the reason for this somewhat absurd reaction to a loss is this: I am celebrating the fact that I was able to stick to my process/strategy even though the coutcome was not what I expected.

Uhm, I guess you mean even when I make a loss while executing my process I should not feel bad instead I should celebrate the flawless execution of my process?

I think he is saying we should always celebrate our ability to stick to our strategy after every days trade, even if the outome is a loss.

I recorded consecutive losses on friday and today monday but I didnt feel bad because I was simpy following my process/strategy. I am wise enough to understand that nothing works all the time.

Even the best strategies fail more than 50% of the time, so yea we should expect some losses but not get discouraged and lose confidence in the process.