Page 9 - Trading #101 Course – PART II TWO: SUCCESSFUL TRADING PIE – www.traderscoach.com

TRADING #101 COURSE – PART II TWO: SUCCESSFUL TRADING PIE – WWW.TRADERSCOACH.COM

5.) Practice until profitable. Analyze your paper-trading results and adjust until you
are profitable, and feel good about your trading.

6.) Have three profitable lots of 25 trades. Before trading with real money, be sure
you have a total of three profitable consecutive profitable lots of 25 trades each
while paper trading. And if you’re a day trader, be sure to have spread your day
trading over enough days, weeks, or months so you experienced up trending,
down trending, and bracketed markets. You can achieve this by using a play-
back feature that is available on some front-end charting platforms.

7.) Keep trading in lots of 25 trades. When trading with real money, keep using
the 25-trade lot size to analyze your profit/loss, win/loss, and so on to see how
you are doing.

8.) Reevaluate your approach. If you are not profitable trading with real money
after trading one lot of 25 trades, stop trading and go back to paper trading again.
If you are immediately profitable paper trading, then chances are your
psychology is the problem and you may need some additional help from a trading
coach to uncover your psychological sabotage issues. But if your paper trading is
not immediately profitable this time, then you may have just been lucky the first
time and did not paper trade long enough to experience the different types of
market cycles. Your trading approach needs to be adjusted. Until you have a
qualified trading approach as proven through how you paper trade, then you will
not know if your problem lies in your trading approach or if your problem is with
your psychology.

9.) Experiencing draw-down. If you experience six consecutive losing trades
and/or a draw-down of more than 15 percent, the market cycle or volatility in the
market and time frame you are trading has probably changed. You must adapt
quickly and effectively to these changes.

10.) During an excessive draw-down, follow these steps. (1) Stop trading
with real money. Keep trading the same market and time frame and go back to
paper trading. Wait until you have three winning lots of 25 paper trades before
trading with real money again. (2) Adjust your rules to see if doing so eliminates
the losses you incurred in your recent draw-down. If so, paper trade again to
validate your adjustments. (3) Change time frames until you find the time frame
that is working the best.

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