You Don't Need a Better Strategy

Added: 2026-06-02

[00:00:00]Trading is one of the most difficult things that you can attempt to do.

[00:00:04]Trading advice is boring because successful trading is boring. Survival is the most important thing. Try to focus on losing less money. Don't die.

[00:00:27]All right, so this will be, in my opinion, one of the most important trading videos that you can watch. But there's a caveat. I think it's also going to be, probably, one of the more boring trading videos that you can watch on YouTube. And that's because YouTube is littered with slop. It's littered with content from people that have made most of their money from some kind of arrangement with their channel. So they have some kind of paid deal. They have, you know, a Topstep affiliate link. The reality is a lot of the advice that you get on YouTube is from people that barely trade themselves and could not give you the tax forms to show that they've made really any money trading.

[00:01:07]So they probably wouldn't have capital gains. They probably would have some kind of W-2. So this video is going to be really boring, but I promise you, I promise, it comes from a really good place. It comes from someone who's traded for 20 years, who has achieved everything and acquired everything as a result of that. It might look better if I did it from my driveway and I was one of those cringey YouTubers who did it from my Range Rover or my Mercedes or you get the idea. But it's the truth.

[00:01:34]The most important trading advice is boring because successful trading is boring. Don't get me wrong. There are periods where the market is a blast. And while you're trying to be this kind of stoic professional, you can't help but kind of celebrate and pat yourself on the back and at other times fall victim to the low points of the market. But good trading for the most part is boring in the sense that it's a job and you're doing something over and over and over again and at a certain point that does become monotonous. Most new traders, most people that go on to YouTube to get trading advice, they're looking for some kind of magic indicator or one sentence that'll make the difference for them.

[00:02:11]Draw the trend line differently, use this indicator, you know, try my algo bot 5000 garbage All of that is not going to do anything for you. I'm going to give you some really good advice in this video and I promise you, I promise, if you could take 75% of this video and apply it, you will lose less money. Losing less money is what you should be focusing on in the beginning, 100%. Most people I understand are focused on all of the upside, right?

[00:02:35]They're focused on hitting a home run and I get it. That is a really compelling thing given the way that the market is trading, especially lately.

[00:02:42]You know, if you're looking around and you see peer to your left, your friend to your right, they're all doing really well. You never know where they are in their time ensemble, you never know where they are in terms of being on a hot streak and maybe they have a low point in the future cuz they actually don't have a system and you're just seeing them at their high. If you want to do this for the next few years or next decade and have a skill that you can continue to iterate off of and produce good results from, then you have to learn what actually separates the winners from the losers, not just someone on a hot streak. You have to learn what qualities or what things the winners tend to all share and I promise you, the things in this video are characteristics and qualities and points that they all stress and place utmost importance on. So, let's get into it.

[00:03:24]Okay, let's start with the hard truth.

[00:03:26]Most traders should try to focus on losing less money. This is what I've said. You should try to lose less money.

[00:03:32]Stop focusing on trying to hit a home run, focus on trying to lose less and that might show up in different forms for everybody. For most people it probably means just clip it when it's wrong. You don't feel good about something anymore, clip it. Have kind of a funny twinge in your stomach, clip it.

[00:03:46]You feel like you have a little bit of intuition about an idea, clip it. Go with your gut. Try to lose less money.

[00:03:50]Use tighter stops. Make sure you use hard and validations in the beginning.

[00:03:54]Absolutely no ifs, ands, or buts. Your job is survival. That's what it is. It is survival. It is to have as many shots on the board, to have as many shots on target, have as many bullets in the chamber, whatever you want to use, as possible. Have as many chips on your side of the table that you need to be able to stay at the board. In the beginning, this is the most important thing because you don't have an edge.

[00:04:15]You might think you do, but you don't.

[00:04:17]You don't have an edge, right? If you're just starting off, you don't have an edge, okay? Unless you're Rain Man, which you're not. Sorry to tell you that. You don't have an edge. And what that means is you need to be able to last and to keep capital until you actually do. What you're doing is running a business, right? Or you're a scientist and you're running a bunch of experiments. Each one of those experiments cost money. And you're going to need a significant sample of those to determine whether or not there is any merit to what you're doing. So, you need to be able to survive long enough to get to that point where you actually do take off and find some success. The other thing we need to do is to reframe what risk actually is. Beginner traders often just think of risk as 1% per trade, whatever that is. Could be 50 basis points, it could be 5% per trade, right?

[00:04:56]Most people are probably going to be airing on the high side of things early on, but that's not what risk is. The better understanding is that you need something that protects you against your own poor tendencies, which you absolutely have, guaranteed in the beginning. You need some kind of axiomatic framework that keeps you sitting at the table. This is something that matters and that evidences itself before you're compromised, not after.

[00:05:18]It's useless after, right? After you've been zeroed out, all that hindsight risk management is not going to do anything for you. It certainly will not put food on your table. It will not put you in the nice cars that you want to buy. The next most important point is most traders actually know the things that they do wrong. They know the things that they do wrong that constantly unravel them. And I've said this before, you have to sort of be like an addict. I think that there's probably plenty of people who have heard this before that have never had any issues with substances or addictions, but you have to be like an addict. And what they say is you have to get sick and tired of being sick and tired. So, you know the dumb things that you do. You're either going to stop doing them or you're going to quit and you're going to succumb to them. Almost every new trader that I've worked with or that I know or I've been around, we all know the dumb that we do early on. It's about whether or not you can be aware of that and make a conscious decision to stop doing those dumb things and not tell yourself the story of all right, didn't work that time, but I'm just going to yolo on this one trade and once I make it, once I pad my account enough, then I'll really start to buckle down and do things the right way. Do things with the right amount of discretion and discipline.

[00:06:28]That's not how it works. Almost every new trader is aware of three or four things that they do that are constantly evidenced when they are losing money and yet they continue to still do them. So, it's a matter of, hey, am I able to look myself in the mirror and say that I'm doing everything in my power to try to do this successfully, understanding, okay, mind you, that it is one of the most difficult things to do successfully, all right? There's no way around that. Regardless of what social media has led you to think, trading is one of the most difficult things that you can attempt to do and I tell most people you probably shouldn't even trade. Someone told me that at one point. An old boss of mine told me that I shouldn't leave where I was to go try to trade on my own. And honestly, it was probably the right advice for most people, but you know where you stand.

[00:07:12]But again, most people are completely aware of what they do wrong and what are the common denominators in their bad trades and yet they still continue to do them. And I'm not talking about variance again. We're talking about forced errors. I remove my stop. I had the position go against me where I thought the invalidation was, whether it's a hard or soft invalidation, and I decided that I'm just going to let it ride a little longer. I knew I was going to be out here, but I changed my mind last minute. That's just one example among countless examples. So, what do you need? You need, like I said, some kind of axiomatic framework. You need to have what you don't have, which is a risk manager. A bunch of hard and fast rules that dictate how you trade on a day-to-day and week-to-week and a year-to-year basis. The first thing I think that people need to understand is if you're trading and you're risking 1% per trade, one of the most common errors I see is that people think that that is 1% of your maybe net worth, total account value at the start, and this is I think should be something consistently through and through. You have to have an understanding of what you're willing to risk per year. So, at the start of the year, I'm willing to risk losing $500,000. Whatever that number is for you, that is the amount of money that you then determine your risk levels off of. You know, let's say for you, you know, you're a baller, let's say that's $1 million. You're willing to lose $1 million a year. That means that your 1% per trade is off of that value, not off of your net worth or your total portfolio size. It's off of your annual loss limit. So, you need to set an annual loss limit, hard and fast rule.

[00:08:39]From that, you need weekly loss limits, daily loss limits, monthly loss limits.

[00:08:43]And the purpose of this is to stop any kind of emotional stretch or streak that you might develop from wiping you out, from showing you what real risk is, which is losing all of your money and no longer being able to sit at the table.

[00:08:54]One of the more comical pieces of advice I give people is don't die. As silly as that sounds, don't die. What is dying in the market? Losing all your money. Next, you need to have something that helps you downshift when things are not going well. So, let's say you have a daily loss limit, which by the way is not just your yearly loss limit divided by 365.

[00:09:12]Maybe it's 3% of that. The same with a weekly loss limit, it's not just your annual loss limit divided by 52. There's too much variance for you to just lose 1% per day. That should be pretty clear, and I wrote a Twitter thread on this last week. But you need to have something that helps you downshift. So, let's say that for example, you have your daily loss limit, and maybe that's 3% for you, maybe that's three wrong trades, maybe that's four wrong trades.

[00:09:33]The moment that you hit half of this, you should have something that helps you downshift. So, let's say you're down 50% of the daily loss limit, you cut your size in half. Okay? Let's say that you're on a streak of negative results and you have four bad trades in a row, right? Your system says that that's abnormal, you cut your size in half.

[00:09:48]Let's say you're down 75% of your daily loss limit, at that point you only take A+ setups. And what that means is that you already have some kind of journal or playbook that has categorized trades. If you don't have this, then you might as well stop for the day. You shouldn't just try to create this on the fly.

[00:10:03]That's obviously another really important part of trading is having a journal and having a playbook. And as a reminder, the weekly and monthly loss limits really matter, too. Just because a monthly turns over, doesn't mean that it's a fresh start. You have to have something that helps you downshift. And for you, it could be, let's say you do hit half of that daily loss limit and you cut your size in half. All right, so let's say you earn your size back at that point. To get back to full size, you have to hit two trades in a row, you have to hit three trades in a row, you have to start to earn your risk back.

[00:10:30]This is really important. You need to earn your risk, you need to earn the right to take a risk. Otherwise, you're just burning money. Another thing that I think is really important, and this might seem counterintuitive because you've heard from people that, "Ah, if you're up, just continue to lean into it and fire away." Well, most people are going to be overconfident at that point, okay? And they're going to start being careless. So, what I think you need to have are give back limits. And these are not extremely tight, right? And burdensome as a result. But I think one of the things that I've noticed, and I noticed this when I was trading equity indices, is that like come lunchtime, I would start giving back P&L cuz I would have a great morning and I'd start giving back like half of my P&L. If you are up whatever amount on the day, if you start to give back more than half of your P&L, and this is not obviously in the first two trades. Let's say, come lunchtime, you're up significantly on the day and you are starting to give back more than half of your P&L, you absolutely need to downshift. Me personally, if I'm on a streak early in the morning and I'm doing really well, and then I am back at the halfway mark of that, I'm probably starting to be reckless and careless. Probably starting to take trades that are not necessarily A+ setups or forcing during the time period where I know it's not to my advantage. After 50% loss of P&L, I end it for the day. I don't want to give back the entire day. There are times when obviously I've broken this, but for most people, you should downshift when you start giving back more than half of your P&L. You should make a point of getting out of the day green if you're are green at some point on the day. And again, that sounds overly simplistic, but in the beginning this is absolutely something you need to do because you need to build days upon days of wins.

[00:11:55]You need to do that for your own self-confidence a lot of the time.

[00:11:57]Another part, too, which I highlighted, which is the purpose of a playbook and a journal. You need one. There's no way around this. All of the successful traders I know, they have some kind of journal and playbook, and maybe it's automated or they're doing it on their own. You absolutely need one, though.

[00:12:11]You need to be able to identify in advance what certain setups and opportunities look like for you. And if you're going to continue to press setups and opportunities that match those that you're already aware of, instead of just arbitrarily taking trades that don't necessarily fit the criteria that falls within your framework. So, immediately, is this trade in my playbook? Do I know where I'm wrong before I'm placing this trade? Do I have a hard or soft invalidation? Am I trading a legitimate opportunity or am I trying to make back money after coming off of a string of losses? Would I still take this trade if I was flat on the day? Am I trying to make money or am I trying to make my feelings change or improve my feelings after having a poor day? So, just to recap, most trading wounds are self-inflicted. So, you need to try to avoid that as much as possible, early on especially. You need less strategy ideas and more of these guardrails that keep you from hurting yourself. And again, the market is going to guarantee losses, so the idea that risk is losing a trade is bogus because you're guaranteed to take losses. Risk is actually just losing all of your money and not being able to play this game anymore. You probably already know the things that you do that are stupid, and you probably just continue to do them anyway. So, you are your own worst enemy, and trading is not a casino. If you treat it like that, you're going to leave like you would a casino with more than likely less money than you arrived with. You need to have strict rules and limits in place. And some kind of self-governing downshifting protocol when things start to take a turn for the worse. If you made it this far, if you're new, your goal is to not hit a home run. That'd be great, but your goal is to be able to stay at the table as long as possible. Your goal is survival. Your goal is to survive long enough that while you're putting in the work to develop an edge and develop a profitable trading strategy and approach, that you still have money by the time you get there. And that you haven't lost it all along the way due to some really dumb decisions on your part.

[00:13:55]Because the market's going to take it in some way. You want to try to eliminate as much of the you in that process as possible. And you don't need to be perfect. But what you absolutely need to do is to kill the account killing behavior that you're responsible for.

[00:14:07]Consider this a wake-up call. Successful trading early on is about making sure that you don't get in your own way.

[00:14:13]Again, like I said, boring video, but I promise you, if you could take half of what I said and apply it consistently, I promise you, your trading will look a lot better 6 months from now. And if you hear 6 months and think, "Fuck, that's a long time." You're in the wrong place.

[00:14:27]Okay? You have to be able to think long-term. That being said, I'm out.

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