In Tribe of Traders we don’t consider ourselves traders, but rather wealth builders.
We’re Wealth Builders – first traders second.
And that’s part of our unique approach to trading, that’s what allows us to trade profitably.
So what I actually want to speak about today is –
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Do you know what your trading objectives are?
I think that goes a long way to helping you select high probability trades.
Irrespective of what your strategy is, If you know what your objectives are, and marry your objectives to the strategy that you trade, then you’re going to be taking the high probability trades.
Here’s an actual relevant example of what I mean.
So we are in the throes of a drama unfolding on at the moment with the coronavirus.
The media is going wild, absolutely having a field day, scaring the bejesus out of everybody.
And it’s funny to watch, not funny I suppose it is predictable to watch the market react to that, because the market is just hundreds of thousands or millions of you’s and me’s, trading the market with the sentiments that we’re getting from society and the media…
That’s what the market will be showing us, and certainly that the massive sell off on the indices that late last week and the risk off in forex trading is just a result of the chaos and the panic that the media are creating through this virus.
It’s losing all perspective.
Listen, I get it. If you’re one of the people with the virus, it’s very real for you. If you’re one of the people has passed away, it’s bloody real for you.
And if your a family member who’s lost somebody, right, that’s really, really, real okay.
But as it is for cancer or heart disease or diabetes or suicide or other awful things that take lives everyday.
But the media’s is creating chaos around us, and it is reflecting in the market because the market is just a physical representation of the society’s sentiment.
Right now we have a situation that we call risk off.
So in other words, traders are being cautious about where they’re putting their money.
And you can tell that’s risk-off because you can see where the money is going.
Money is going to Swiss Frank, the Yen and to Euro.
Historically, the US dollar was a safe haven, but less so, now.
So you’ve got all the money going to those safe havens and so running away from the Kiwi from Aussie Dollar from US dollar from Pound from all the other instruments and going to the safe havens,
That movement is creating a lot of momentum.
All right, even if you haven’t got trend, you certainly got a lot of momentum.
So what I’ve observed in the tribe is there’s two groups of people that want to get in.
The first – I want to make the most of this and feel like Oh my God. Oh, my God. I’m gonna miss that. I’m gonna miss out, Im Going to miss out, I’ve got to get into these trades. have to get these trades How can I get into these as quickly as I can.
Like their life depended on it.
Then you get the other side people who are just consistently doing what they’ve always done.
Now, here’s the thing in which of those camps do your objectives lie.
Does it lie with the fanatic? Oh, my God. Oh, my God. I must get in. I must make some now, make some money now! does it belong there? in the chaos marrying your bloody chaos with the chaos of the media.
Does it? I put it to you. No, it doesn’t! calm down?
Marry your objectives with your strategy and stay with it.
You’re making an extra 10% frenetically trying to get in and make the most of this dumping in the market because the media spreads chaos is not gonna make any difference to you in the longer term.
Yes, you might make an extra 10%. Yes, you might make an extra 20% or whatever it is.
But what’s this? 10% or 20% going to cost you in the longer term.
In my opinion you are likely shortening your time horizon.
And we all know that you need to have an extended time horizon when you’re trading. Because if you don’t have an extended time horizon. You don’t understand what the law of compounding is.
So when you’re trying to get in and capitalise on the panic, and also panic trying to get in and marrying your state with media you are shrinking your time horizon and you’re in a panic.
You’re in the greed zone. and thinking that they’ll never be an opportunity to make this again.
You’re no longer grounded centred, being open to receiving the information from the market. In that calm state, trade ready state.
Instead, you are in that panic state that the media is creating and you’ll be getting into the market and grabbing from the market now for short term gains.
That might work for you because you’d be running on adrenaline. And in a sense, there is a heightened awareness in the short term with that adrenaline, but it wears out because it’s exhausting, that sends all sorts of chemicals and hormones and whatnots through your body.
It builds up stress and then when all that noise comes down, you have to now go and figure out how to get back to how you were before the chaos.
And you may or you may not have an extra 5, 10, 20% in your account.
Great. Fantastic. So you’ve got £2000 in your account or 5000 pounds and a few hundred extra quid, Great!
But when it all calms down… Now you have to try and figure out how to get back into trade ready flow again, when the markets, calm down again and everyone goes back to normal.
Trying to get back into that calm state.
Try and get back into that routine.
And in fact if you never deviated from that calm, centred, grounded, trade ready state and trading in alignment with your objectives and having a longer term view – a longer time horizon approach to your trading where you consistently just take from the market over time knowing that your trade today is as important as your trade last week and is as important to trade next year.
And you know that it’s the small, consistent things done consistently over time that has the radical difference that allows the laws of compounding to take effect… there is no disruption – no change….
There’s no, no shift in behaviour, no stress, no anxiety, just consistency.
That’s what marrying your trade objectives to your strategy and having a plan will do for you.
It will ensure that you are not caught up in the spin of the chaos
Instead, you’ll remain centred, grounded and true to what your objectives are and not subjugating yourself to the objectives of society or more or more specifically,
in this case, media, whatever the objectives are that is driving that chaos. Whatever it is, it doesn’t matter what it is.
Is it to sell papers? Is it to sell News? Whatever it is, it doesn’t matter what it is.
But whatever it is, you’re not not impacted by it. You’re not falling victim for it.
Instead, you remaining grounded, centred, confident and certain in your destiny and being clear about your vision, your goal, and not deviating from that one iota.
Your burning desire, your vision for you. What it is that you want to be, do and have right now today, next week, next year, next decade, next generation.
That is your remaining true to that, that is the difference between somebody having their strategies Um their objectives,
Here’s the thing when I look at the market, I saw there was a run to the safe havens.
The chaos being created by the media is actually impacting the markets, which is not surprising because the market is nothing but hundreds of thousands of You’s and Me’s doing our bit in the market…and most of the You’s and Me’s out there are in that panic mode in that high stress mode in that shortened time horizon mode.
In that where they get caught up in the greed and that a shortened time horizon
With a belief that taking all the trade’s you can during this time is gonna make a significant difference to your longer term goal.
And I put it to you that it is not because it is not about how you react to the market in the short term but it’s about how you are over time.
Because when you get caught up in that, I need to make the most of this etc ……You’re no longer grounded, centred, calm, trade ready state….
There is the style of trading that might work for, but when it comes to retail traders like us, there’s phenomenal wisdom in having a trade plan, having objectives and having your strategy/ies all married together.
That ensures that we can consistently do what we do, no matter what the market is doing, no matter what society is doing, no matter what the media is doing – we just do the same as always.. whatever storm come, hail rain or sunshine, whatever it is we weather that doing nothing differently than what we do all the time and in that consistent way is when we actually would reach our goals effortlessly.
Trading brings up enough itchy, scratchy, uncomfortable senses
It brings up a enough emotion. It triggers enough of our belief systems without reacting or being reactive to the crazy madness of media in society
So why not give ourselves the best possible edge to reach our goal.
Reach our target effortlessly stress free with as high an R.O.I as possible with as high a return on investment of our time as possible in trading.
Remember, trading is an arrow in your quiver of wealth building.
You’re not a trader. Your Wealth Builder and that’s the difference.
We are retail traders. We are Wealth Builders. We’re doing it because we want to build Wealth we’re doing it because we want to build financial freedom.
We want to have the freedom that Wealth brings us.
We want to have the freedom that is our birth right.
That is why we’re trading.
We’re not chasing the money. The short term money, the greed, getting the 10% now
I mean, what would you rather have? 10% of a 1,000,000 in five years time or 10% of 2000 account now
If you are very clear on your plan… Very clear on your objectives. Very clear on your strategy and how they all marry together. You’ll whether any storm.
When you have the financial freedom, then you can possibly look at taking some of those funds on doing some high risk trading or speculating .
But if you’re still on the road to financial freedom stay focused and give yourself every single opportunity, every chance, every single edge and advantage to get you to your financially secure, financial freedom state as soon as possible.
Because your greatest wealth, your greatest asset in life, Is Time, Not money, not chasing the buck – It is time.
Make sure that whatever it is you’re doing, you’re getting the highest return on your investment of time.
There’s no faster return on investment when you trade as a Wealth-Builder rather than a trader when you trade.
So whatever you do, if you do nothing else, I would love you to spend this week making sure you’re clear in your trade plan. What are your objectives? What are the strategies you trade and marry them together and make sure that you’re consistent.
The sort of objectives to consider – how long you trade. How many trades you take in a month? What risk do you take? What is your target?
What’s your monthly return target?
What’s your draw down target?
How do you manage your return targets throughout the month?
That’s some of your objectives to consider and what do you get from your strategy is it 1:1, 2:1, 3:1. How do you trail your trades?
How do you manage your trades? How does that fit in with your objectives?
How does that fit in with your trade plan?
And you will build financial freedom quicker than you can have a blink of an eye.
Then when you’ve got the financial freedom that you would love, then you take a small portion of that and you go into high trading or investment strategies, but when you’re in the Wealth building mode to get the financial freedom that you would love… Is not the time to do it. Time to do it is when you have it. You have. You have.
It’s like a pyramid – think of your wealth building like a pyramid – with the bottom being a large base of cash. Cash what I call in your bulletproof account, you’ve got a lot, maybe two years of cash that if never made another cent for the next two years. You have cash to tide you over for those years.
That’s your basis. And then you might have what they call in the UK ISA’s.
I think maybe in the States they would be 401’s highly, safe government bonds.
Then you maybe properties. And maybe you have above that utilities investments and then you have your trading, forex trading.
Then you have maybe you’re short term or high risk speculation. Or maybe you then invest in start ups.
So you’re Wealth building represents a pyramid and as retail traders we should be about halfway up on your pyramid so you should have quite a lot of basics in place – certainly a healthy bulletproof account.
