Risk Rule 1: When Not To Trade
Rusk Rule 2:
Risk Rule 3 Transcript:
Risk Rule. When not to trade…The trader who can manage their risk the best will probably be the trader that lasts the longest… And the first risk that I want you to consider. Is when not to trade. I have quite a list here for you. And I would recommend you get out your digital notebook and perhaps you take some notes on this. It is absolutely critical. When I talked to a new trader, probably the first topic we talk about is risk mitigation. And the first topic inside of that is when not to trade. Because the goal is…getting rid of our C and D level traits. We should never be taking a C or D level trade and the first way to eliminate a C and D level trade… Is easily…eliminated. By knowing when not to trade. Okay. Not entering a trade. Is the easiest thing to do… And you want to be aware of wind You should not be trading. Some of these factors are common amongst. Us as traders. And some of these factors are going to be based on you. And we're going to dive into that. So this is easily the most critical decision you're going to make. Is when not to trade, not take in a trade. Is a decision. It is a trade. It does affect the risk of your portfolio, the risk of your mental equity. And it is critical to always be preserving your mental and emotional equity I want to guard that first. And the easiest way to do that is to not be in a trade when the market's about to go crazy. Or you're not in a good place. And we're going to talk about that today. This does require attention to details. You don't just come and sit down at the computer, look at the chart and start trading… Or at least I can't do that. Um, So it requires attention to detail. Now there are some tools you can use to help you in this list that I'm about to give you one of them As you can use countdown timers, let's just use a real obvious event. F O M C. Okay. My be a good idea to have a countdown timer on your screen while you're trading. So you'll know when you want to stop trading. Or when that event's going to happen you can do it however you want. On my live zoom with my traders, I will often have a countdown timer, um in the zoom screen so they can see that as well. You can put vertical lines on your trading view chart. And add the note, what is coming up? Is that CPI is that sentiment what's about to happen? When is it going to happen and be aware of how much longer do you have? Because if you only have let's say 23 minutes before the next news release is that enough time for you to enter a trade. Every minute you get closer to that news event, the risk of being… And a trade increases… You can use some sort of automated scheduling software to help you. So Darren our lives zooms. From time to time on a scheduled rotation. We get verbal reminders. For example one of our reminders is, um every 30 minutes it's going to remind us to look at our higher timeframes. So we get off the three minute chart We get off the one minute chart flip to that 30 minute chart. And see are we leaving sets of single prints? Whatever we're looking for. So the scheduling software can help you. Um for example Europe closes at the same time. Every week. Except when there's time zone changes or whatever and it gets weird for a week but. If you know, That at X time every day. Certain thing happened, let's say it's your quitting time. Well, my automated software for example comes on 15 minutes before my quitting time reminds me in 15 minutes. Close your charts… So I know that's an early warning system of okay. If I'm going to enter a trade I need to know I've only got 15 minutes left. And I need to know that if I get into that trade, let's say it goes against me Time is ticking. I'm probably going to have to just get out of that trade because I know my quitting time, Is absolutely critical to my success. We're going to talk about that here in a minute. And then you need access to websites with. A calendar of economic news. And you want to use more than just one economic calendar. Okay. So let's kind of dive into this. I want you to check yourself emotionally. Are you upset? Has there been a death in the family? If someone's sick… Did you just have a fight with your spouse or your child? Are your parents… Are you under financial stress… These emotional checks are really important. And you should ask yourself, am I ready to trade… Something you should ask yourself during the trading day. Am I ready to trade… And if you're not in your conditions change. Close your dorm. But the mouse down and walk away… Check yourself emotionally. Check yourself physically. Did you sleep well? Are you tired? Are you in the wrong place… My opinion don't whip out your cell phone and enter a trade When you're waiting in the car line to pick up your kid from school. You got shoddy wifi. Your computer has been acting up… So the first two things is how are you emotionally and where are you physically in art Do you have the right equipment Is that equipment. Working Well, are you in the right place physically? These factors play into it. Victim… Next one. Not enough time to trade Do you have a dentist appointment in one hour? Are you leaving on vacation tomorrow? And your mind is really on that… So when you enter a trade is there enough time for that trade to develop… Only you can answer that question. The next one. Is your pre flight checklist. I use a lot of aviation turn because I absolutely love aviation. Um inside of our core strategy academy the first course is called bootcamp. The next one's called flight school are probably gonna have one more called aerobatics because now you're getting all fancy. Um but pre-flight checklist and that is something uh we, we, uh take very seriously in our group. And part of that pre-flight checklist is what we just talked about. Am I in the right place emotionally, am I in the right place physically? Have I, um done my. Uh news drivers for the day. Um, Work news drivers are there tomorrow. So this pre-flight checklist is really important You are like a pilot. That goes out to the airplane. And does a preflight checklist. Um all the way from… Checking the condition of the tires to. Does the rudder and elevators move freely and… Everything involved with. Taking off in an airplane. It should be the same level of seriousness. Before you take off and start entering trades. Get up early. If you get up late. And you come into the. And to your trade station. Your trade computer and the market just opened… Don't look at it… Either don't trade or have the discipline to say I have got to do my pre-flight checklist before I start start trading. I must do my pre-flight checklist. I recommend to my traders to have it printed out and next to your computer. And one of our indicators for our group. I have on there. Basic. A basic pre-flight checklist. It's a reminder of Hey, here's the most important things you need to do. Before you trade. Have a pre-flight checklist. These are the things I will do. I will check. I will mark. Before. I trade. Take it seriously. Next one huge one when not to trade our news drivers. Your Sunday homework… Is to do a week at a glance knowing what is being released this week. And you're Mont as well Look at next week. Okay. Cause if next week. Not this week but if let's say next week was FMC, that's going to affect how. The market trades this week you need to be aware of that… So in my group on Sunday night I'll post the week at a glance These are the news drivers I'm seeing that we need to have on our chart…during the week And then each day. You check it again. Okay. Because there's big news events and it doesn't matter what the news is The only thing that matters is. How does the market react and you shouldn't be in a trade. 10 minutes before it happens… N F P non-farm payroll. I also call that not for professionals… Unemployment rate. Those are released the first Friday after the month ends CPI. It's about 16 days after the month ends F O M C and their press conference eight times a year. Is Powell speaking as Powell testifying. Is one of the other fed speakers talking or testifying. Put it on your chart. GDP is the quarterly gauge of our economies health. Unemployment claims weekly on Thursdays… Then there's other ones There's retail there's housing There's PMI There's sentiment. All of these things you need to be aware of, of when they're happening You don't need to be an expert in what the heck they are… At least not for the scalping that we do We just need to be aware of when these news drivers are happening, because it makes price go crazy. I've even seen hundred point candles… When a news event is released. Don't be in front of it. Go get you some tea Go get you some coffee. Go for a walk. Just don't trade. And be aware as what. Be aware. What news drivers are being released tomorrow… Okay Cause if F O M C is tomorrow. Today is probably going to be characterized by slopping chop. Might be a good day not to trade If you don't like to trade in slop and shop. If you love slop and chomp, you can make a lot of money trading slop and shop on a 32nd chart… But you need to know that that tomorrow is FMC. So today we're probably going to see this type of price action… Okay. So do that week at a glance on Sunday, do it every day as part of your pre-flight checklist, what news drivers are going to move the market today? Put them on your chart use a countdown timer use some automated software, whatever you have to do. So you are not caught. In the craziness of that news release… Um, There's other factors when it comes to time The first thing I do before I enter a trade, my eyeballs go to the upper right of my monitor to check. The time. Okay. Um, I want to be aware of the top of the hour the bottom of the hour How far are we away from Europe closing? Is there enough time for me to be in the trade before either a news driver dentist appointment Europe closing my quitting time… Those type of issues needs to come into play. In your own trade analysis, last weekend's homework. And our discord group. Was covering… How to download your transactions from trade of eight. I was just using trade away because a lot of us use try to bait. Get them into a spreadsheet Get them into air table. And let's do some analysis on these numbers. Now there are softwares that can help you. I find them to be too expensive to be homicide so I don't use them I just I hand to do my analysis. How do I trade by day? Are there certain hours I rock. And are there certain hours I stink. And the answer to that question is yes… How are my trades by trend How were they by type by level R T H versus ETH? How do I compare in the morning session versus a lunchtime? Versus PM. How are my trades If I try to train the trade in the Asia market and the not Asia market during the Asian timeframe, you know, evening. What about London time… Sometimes I do get up at two 3:00 AM in the morning and trade the London open How do I do. How do I do it versus the New York session? And learn And the goal here…is for you to learn when you should not be trading. I know exactly when I should not be trading and I try to be very strict about those rules. If I do trade into a timeframe. In which…I historically have not done well… I forced myself to trade the smallest leverage possible. And if I have a losing trade. I'm out. I knew I shouldn't have been trading during that timeframe. But I try not to trade it at all. His historic historical records have proven. There are certain times I don't do well… And sometimes that's based off your tiredness. A lot of people don't even trade on Friday. Especially the older you get I'm going to be honest the more tired you're going to be by the end of the week. I'm not as sharp and crisp on Friday as I am on Monday… And I know that. So I only trade in the mornings on Friday as an example. If I make a Broady afternoon trade which…I actually did. Um Friday. Got a couple of days ago. I was sitting here programming, uh some of our indicators for our group making some changes and betrayed just presented itself But I entered with one MES. The smallest leverage. It was outside of my prime hours And. Luckily it bounced and it ran at touched and goat and. And turn into a B a net net 10 pointer. And um I was hoping it would be something bigger but Hey I'm happy with that too. The lesson is though try to trade in your best hours and you have to do that analysis to know when you trade best, what data you trade best What hours do you trade best? Um I know my single best hour. Is. I'm putting this in Eastern time zone… Um 10 to 11. That is when I trade the best. When I sort all of my transactions by hour of the day. That hour crushes any other hour. Big time… Then the very next hour is my worst hour… So guess when my quitting time is. It is around. That time. Of when holy cow I can't believe how…much worse I did. In this particular hour and how great I did. In this. Hour…and you know what you take that data. And you get rid of your C and D level trades on an overall. Scale and realize you know what that particular hour I don't do as well. That's when Europe's closing things get squirrely Uh, for me it's better to be out… So guys knowing when not to trade is absolutely critical to you getting rid of your C and D level trades. Okay. Now when you first starting C and D level trades. Are the real horrible traits. As you get better you still have C and D level trades… It's just. They don't hurt as much. And the first thing to help you is knowing when not to trade… Okay So if you'd like to be part of a group of S and P futures traders that's what we do here at micros trader. And you're welcome to learn more about our core strategy on the website@microstrader.com. In fact I give you links to learn most of this core strategy. On your own now how I put it together and the special recipe and all that stuff is, is unique to me. And um but that's what I teach at the core strategy academy. I hope you guys have a great week. Bye…
Risk Rule 3 Transcript:
Risk Rule. When not to trade…The trader who can manage their risk the best will probably be the trader that lasts the longest… And the first risk that I want you to consider. Is when not to trade. I have quite a list here for you. And I would recommend you get out your digital notebook and perhaps you take some notes on this. It is absolutely critical. When I talked to a new trader, probably the first topic we talk about is risk mitigation. And the first topic inside of that is when not to trade. Because the goal is…getting rid of our C and D level traits. We should never be taking a C or D level trade and the first way to eliminate a C and D level trade… Is easily…eliminated. By knowing when not to trade. Okay. Not entering a trade. Is the easiest thing to do… And you want to be aware of wind You should not be trading. Some of these factors are common amongst. Us as traders. And some of these factors are going to be based on you. And we're going to dive into that. So this is easily the most critical decision you're going to make. Is when not to trade, not take in a trade. Is a decision. It is a trade. It does affect the risk of your portfolio, the risk of your mental equity. And it is critical to always be preserving your mental and emotional equity I want to guard that first. And the easiest way to do that is to not be in a trade when the market's about to go crazy. Or you're not in a good place. And we're going to talk about that today. This does require attention to details. You don't just come and sit down at the computer, look at the chart and start trading… Or at least I can't do that. Um, So it requires attention to detail. Now there are some tools you can use to help you in this list that I'm about to give you one of them As you can use countdown timers, let's just use a real obvious event. F O M C. Okay. My be a good idea to have a countdown timer on your screen while you're trading. So you'll know when you want to stop trading. Or when that event's going to happen you can do it however you want. On my live zoom with my traders, I will often have a countdown timer, um in the zoom screen so they can see that as well. You can put vertical lines on your trading view chart. And add the note, what is coming up? Is that CPI is that sentiment what's about to happen? When is it going to happen and be aware of how much longer do you have? Because if you only have let's say 23 minutes before the next news release is that enough time for you to enter a trade. Every minute you get closer to that news event, the risk of being… And a trade increases… You can use some sort of automated scheduling software to help you. So Darren our lives zooms. From time to time on a scheduled rotation. We get verbal reminders. For example one of our reminders is, um every 30 minutes it's going to remind us to look at our higher timeframes. So we get off the three minute chart We get off the one minute chart flip to that 30 minute chart. And see are we leaving sets of single prints? Whatever we're looking for. So the scheduling software can help you. Um for example Europe closes at the same time. Every week. Except when there's time zone changes or whatever and it gets weird for a week but. If you know, That at X time every day. Certain thing happened, let's say it's your quitting time. Well, my automated software for example comes on 15 minutes before my quitting time reminds me in 15 minutes. Close your charts… So I know that's an early warning system of okay. If I'm going to enter a trade I need to know I've only got 15 minutes left. And I need to know that if I get into that trade, let's say it goes against me Time is ticking. I'm probably going to have to just get out of that trade because I know my quitting time, Is absolutely critical to my success. We're going to talk about that here in a minute. And then you need access to websites with. A calendar of economic news. And you want to use more than just one economic calendar. Okay. So let's kind of dive into this. I want you to check yourself emotionally. Are you upset? Has there been a death in the family? If someone's sick… Did you just have a fight with your spouse or your child? Are your parents… Are you under financial stress… These emotional checks are really important. And you should ask yourself, am I ready to trade… Something you should ask yourself during the trading day. Am I ready to trade… And if you're not in your conditions change. Close your dorm. But the mouse down and walk away… Check yourself emotionally. Check yourself physically. Did you sleep well? Are you tired? Are you in the wrong place… My opinion don't whip out your cell phone and enter a trade When you're waiting in the car line to pick up your kid from school. You got shoddy wifi. Your computer has been acting up… So the first two things is how are you emotionally and where are you physically in art Do you have the right equipment Is that equipment. Working Well, are you in the right place physically? These factors play into it. Victim… Next one. Not enough time to trade Do you have a dentist appointment in one hour? Are you leaving on vacation tomorrow? And your mind is really on that… So when you enter a trade is there enough time for that trade to develop… Only you can answer that question. The next one. Is your pre flight checklist. I use a lot of aviation turn because I absolutely love aviation. Um inside of our core strategy academy the first course is called bootcamp. The next one's called flight school are probably gonna have one more called aerobatics because now you're getting all fancy. Um but pre-flight checklist and that is something uh we, we, uh take very seriously in our group. And part of that pre-flight checklist is what we just talked about. Am I in the right place emotionally, am I in the right place physically? Have I, um done my. Uh news drivers for the day. Um, Work news drivers are there tomorrow. So this pre-flight checklist is really important You are like a pilot. That goes out to the airplane. And does a preflight checklist. Um all the way from… Checking the condition of the tires to. Does the rudder and elevators move freely and… Everything involved with. Taking off in an airplane. It should be the same level of seriousness. Before you take off and start entering trades. Get up early. If you get up late. And you come into the. And to your trade station. Your trade computer and the market just opened… Don't look at it… Either don't trade or have the discipline to say I have got to do my pre-flight checklist before I start start trading. I must do my pre-flight checklist. I recommend to my traders to have it printed out and next to your computer. And one of our indicators for our group. I have on there. Basic. A basic pre-flight checklist. It's a reminder of Hey, here's the most important things you need to do. Before you trade. Have a pre-flight checklist. These are the things I will do. I will check. I will mark. Before. I trade. Take it seriously. Next one huge one when not to trade our news drivers. Your Sunday homework… Is to do a week at a glance knowing what is being released this week. And you're Mont as well Look at next week. Okay. Cause if next week. Not this week but if let's say next week was FMC, that's going to affect how. The market trades this week you need to be aware of that… So in my group on Sunday night I'll post the week at a glance These are the news drivers I'm seeing that we need to have on our chart…during the week And then each day. You check it again. Okay. Because there's big news events and it doesn't matter what the news is The only thing that matters is. How does the market react and you shouldn't be in a trade. 10 minutes before it happens… N F P non-farm payroll. I also call that not for professionals… Unemployment rate. Those are released the first Friday after the month ends CPI. It's about 16 days after the month ends F O M C and their press conference eight times a year. Is Powell speaking as Powell testifying. Is one of the other fed speakers talking or testifying. Put it on your chart. GDP is the quarterly gauge of our economies health. Unemployment claims weekly on Thursdays… Then there's other ones There's retail there's housing There's PMI There's sentiment. All of these things you need to be aware of, of when they're happening You don't need to be an expert in what the heck they are… At least not for the scalping that we do We just need to be aware of when these news drivers are happening, because it makes price go crazy. I've even seen hundred point candles… When a news event is released. Don't be in front of it. Go get you some tea Go get you some coffee. Go for a walk. Just don't trade. And be aware as what. Be aware. What news drivers are being released tomorrow… Okay Cause if F O M C is tomorrow. Today is probably going to be characterized by slopping chop. Might be a good day not to trade If you don't like to trade in slop and shop. If you love slop and chomp, you can make a lot of money trading slop and shop on a 32nd chart… But you need to know that that tomorrow is FMC. So today we're probably going to see this type of price action… Okay. So do that week at a glance on Sunday, do it every day as part of your pre-flight checklist, what news drivers are going to move the market today? Put them on your chart use a countdown timer use some automated software, whatever you have to do. So you are not caught. In the craziness of that news release… Um, There's other factors when it comes to time The first thing I do before I enter a trade, my eyeballs go to the upper right of my monitor to check. The time. Okay. Um, I want to be aware of the top of the hour the bottom of the hour How far are we away from Europe closing? Is there enough time for me to be in the trade before either a news driver dentist appointment Europe closing my quitting time… Those type of issues needs to come into play. In your own trade analysis, last weekend's homework. And our discord group. Was covering… How to download your transactions from trade of eight. I was just using trade away because a lot of us use try to bait. Get them into a spreadsheet Get them into air table. And let's do some analysis on these numbers. Now there are softwares that can help you. I find them to be too expensive to be homicide so I don't use them I just I hand to do my analysis. How do I trade by day? Are there certain hours I rock. And are there certain hours I stink. And the answer to that question is yes… How are my trades by trend How were they by type by level R T H versus ETH? How do I compare in the morning session versus a lunchtime? Versus PM. How are my trades If I try to train the trade in the Asia market and the not Asia market during the Asian timeframe, you know, evening. What about London time… Sometimes I do get up at two 3:00 AM in the morning and trade the London open How do I do. How do I do it versus the New York session? And learn And the goal here…is for you to learn when you should not be trading. I know exactly when I should not be trading and I try to be very strict about those rules. If I do trade into a timeframe. In which…I historically have not done well… I forced myself to trade the smallest leverage possible. And if I have a losing trade. I'm out. I knew I shouldn't have been trading during that timeframe. But I try not to trade it at all. His historic historical records have proven. There are certain times I don't do well… And sometimes that's based off your tiredness. A lot of people don't even trade on Friday. Especially the older you get I'm going to be honest the more tired you're going to be by the end of the week. I'm not as sharp and crisp on Friday as I am on Monday… And I know that. So I only trade in the mornings on Friday as an example. If I make a Broady afternoon trade which…I actually did. Um Friday. Got a couple of days ago. I was sitting here programming, uh some of our indicators for our group making some changes and betrayed just presented itself But I entered with one MES. The smallest leverage. It was outside of my prime hours And. Luckily it bounced and it ran at touched and goat and. And turn into a B a net net 10 pointer. And um I was hoping it would be something bigger but Hey I'm happy with that too. The lesson is though try to trade in your best hours and you have to do that analysis to know when you trade best, what data you trade best What hours do you trade best? Um I know my single best hour. Is. I'm putting this in Eastern time zone… Um 10 to 11. That is when I trade the best. When I sort all of my transactions by hour of the day. That hour crushes any other hour. Big time… Then the very next hour is my worst hour… So guess when my quitting time is. It is around. That time. Of when holy cow I can't believe how…much worse I did. In this particular hour and how great I did. In this. Hour…and you know what you take that data. And you get rid of your C and D level trades on an overall. Scale and realize you know what that particular hour I don't do as well. That's when Europe's closing things get squirrely Uh, for me it's better to be out… So guys knowing when not to trade is absolutely critical to you getting rid of your C and D level trades. Okay. Now when you first starting C and D level trades. Are the real horrible traits. As you get better you still have C and D level trades… It's just. They don't hurt as much. And the first thing to help you is knowing when not to trade… Okay So if you'd like to be part of a group of S and P futures traders that's what we do here at micros trader. And you're welcome to learn more about our core strategy on the website@microstrader.com. In fact I give you links to learn most of this core strategy. On your own now how I put it together and the special recipe and all that stuff is, is unique to me. And um but that's what I teach at the core strategy academy. I hope you guys have a great week. Bye…
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