[Explanation of Method ③] A professional, tried-and-true method is to plan for losses as part of overall earnings.
[Technique Explanation ③] The trade methods taught by professionals are planned for losses as part of overall profit
Most professional traders say
“You should not leave losses untreated; you must cut them properly”
However, humans are weak,
and tend not to realize losses, trading without cutting them
If you trade a few times, you should be able to stay profitable overall
even if you trade at points with a positive expectancy
For example, in a long position
If you take a long at a place with an expectancy that the price will go up 70% of the time
there will also be the 30% of the time when it goes down, and at those times you must cut your losses properly
When it goes down,
if you cannot accept the loss and leave it as is, you will accumulate a large loss, and you won’t be able to stay profitable overall
First of all, if you don’t trade toward the 70% expectancy, you won’t make a profit
then it’s natural that the 30% will go down
the “30%” is a cost
What you should consider is not to inflate that cost unnecessarily
yet in FX, because that results in losses,
people tend to feel that cost as a “loss”
What’s important is
it is natural that the 30% will go down
so don’t inflate the cost unnecessarily
To achieve that,
for example
“If the candle closes below the EMA, cut losses unconditionally”
“Limit the maximum loss”
is a reasonable strategy
In my method, the maximum stop loss is set to -6 pips
with a pending order, place a stop order at entry to cut losses if it reaches -6 pips
And after entry, no matter what happens,
do not move the stop loss in a direction that increases losses
※ you may move it toward the profit direction. If you can move it to the break-even point, you won’t incur a loss
Sometimes prices move rapidly and you can’t react in time, so this is crucial
However, humans are weak, and we tend to move that stop loss
When it gets close to -6 pips, the feeling of “I don’t want to incur a loss” wins
and you move it to around -10 pips, and further…
repeating this leads to a large loss…
Treat cutting losses as a cost and include it in your method,
and trade in places with a 70% expectancy
this mindset is important
If you think in terms of “win rate,” this feeling becomes blurred
Because you don’t want to incur losses, you move the stop loss
⇛ If you want to stay profitable overall, don’t allow losses to be large
The logic of the method is important, but
it’s also important to have a plan for overall profitability
And test and study that overall method until you can trust it
Once you can trust it, you should be able to cut losses
To overcome human weakness,
you must be sure of a method that wins overall and use it with confidence
If so, you can eliminate the risk of moving stop loss locations
Most professional traders say
“If you can’t cut losses properly, you won’t be able to earn consistently”
My method and the two methods of my master that it’s based on
this “plan to stay profitable overall”
was created with careful regard for that overall profitability
Professional intuition learned from a master trader
If you can’t actually earn through real experience, practical methods cannot be developed
How many wildly implausible methods exist in the world
and they are often sold at high prices...
I myself changed dramatically after learning professional intuition, and could take the fastest route to becoming a full-time trader
I faithfully reproduce that intuition in explanations, under my master’s supervision
The method I am currently practicing is here
[Steady +10 pips per day]
A one-minute FX method I learned from professional traders that helped me escape the losing group (about 2–5 hours per day)
Explained with smartphone chart images
Logics that clearly show [entry points] and [exit points]
■ Thinking of overseas professional traders (legendary investors Buffett and Soros)
Trade not to win, but to earn
Trade only at places with high probability of rising, based on expectancy rather than win rate
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https://www.gogojungle.co.jp/tools/ebooks/76385
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