Consider this analogy: Lions are known for their incredible strength and hunting prowess, yet they aren’t the swiftest of creatures. Unlike leopards, which can reach speeds of up to 60 miles per hour, lions rely on their power and teamwork for successful hunting. They employ a patient strategy, waiting in ambush for the slowest and weakest among their potential prey. This approach is all about playing the odds.
Whether it’s a lion pursuing a gazelle or a cheetah chasing a giraffe, the principle remains the same: the most robust creature in the wild opts for the easiest catch. Why? Because it’s the most reliable path to success. Going after the fastest prey is not only energy-draining but also leaves room for failure.
Now, let’s draw a parallel to trading, where your “energy” is your capital. Why would you venture into a trade that’s based on guesswork and lacks a competitive edge?
I’ve engaged in discussions with people about this topic, and sometimes, I’ve had to walk away from those conversations. Sure, you might make money on a given day, just like you could potentially find a winning lottery ticket while strolling through the city. But the smarter move is to trade based on your highest probability setups.
These setups can vary from trader to trader, but there are days when the market conditions align perfectly, making trading feel as effortless as shooting fish in a barrel. On the days when that’s not the case, it’s wise to stay on the sidelines until the odds swing back in your favor. Too many traders fall into the trap of setting daily profit goals, which is vastly different from maintaining a consistent daily average.
This concept is explored in our PTS Course?” You can find it on the website under Courses, and I consider it one of the most important messages I can convey to you.
There’s an insatiable urge among traders, especially newcomers, to overtrade. This tendency is a major contributor to the downfall of many trading careers.
The significance of this topic is underscored by the fact that even moderately experienced traders sometimes struggle to grasp it. There are, in fact, two facets to this issue. One aspect, as I mentioned earlier, involves always seeking the highest probability setups. The other side of the coin is the ability to step away when those setups aren’t present. This is where many traders stumble.
The fear of missing out plagues even seasoned traders like myself. It’s tempting to remain glued to the screen, hoping to create profit out of thin air. However, in the long run, this approach is detrimental. Most traders find it challenging to step away, fearing they might miss a golden opportunity. But the truth is, what they’re more likely to miss are multiple stop-outs.
The undeniable fact, grounded in mathematics and science, is that trading high-probability setups is the key to sustainable success. When you push and scramble to find opportunities, you’re setting yourself up for long-term losses. Just as lions target the weakest prey for a reason, traders should focus on the highest odds trades to thrive in the markets.
