The Main Goal Of Trading
I like to keep things simple. The goal of trading is not a mystery: it is to let the winners run and cut the losers short.
In this video I discuss how successful trades, both the ones that win and lose, will make one a success in this endeavor. It is not always about making money. Often, it is to lose a little money as possible.
▶️ 3Speak
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Rule Number 1: Don’t lose Money
Rule Number 2: See rule number 1 lol
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Nice one, I find the lessons learned also very valuable in the end :) even if it means losing some :)
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The main goal if trading is to make profits.
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Summary:
In this video, Task discusses a conversation he had with someone on Discord regarding trading and the definition of success in trading. The key point of the discussion was about the goal of trading, which Task believes is to maximize winners and minimize losers. He emphasizes the importance of letting winning trades run and having individual parameters for exiting trades. Task also touches on the idea of quick hits in trading, different strategies for trading penny stocks, and the significance of sound money management in trading.
Detailed Article:
Task starts the video by mentioning a conversation he had with someone on Discord regarding the idea of successful trades versus winning trades. The Discord user had a differing opinion, stating that winning trades are the only measure of success in trading. Task reflects on this conversation and shares his perspective on the goal of trading. He believes that the key to success in trading is to maximize winners and minimize losers. This, he argues, is crucial for long-term success in trading.
Task stresses the importance of letting winning trades run, mentioning that when a trade setup aligns with one's criteria and starts moving favorably, it is essential to allow the trade to progress. He acknowledges that the criteria for exiting a trade may vary for each trader and emphasizes the significance of individual parameters in trading decisions.
Furthermore, Task delves into the concept of maximizing returns in trading. He gives an example of traders who focus on penny stocks and aim for quick profits ranging from 10% to 25% within a short timeframe, sometimes even holding positions overnight for quick gains. He explains that different markets and stocks have varying levels of volatility and risk, and traders need to adapt their strategies accordingly.
Task touches on the notion that the first loss is often the best loss, highlighting the importance of cutting losses early to mitigate risk. He mentions that even if a trade results in a small loss, it is still considered successful if it prevents a larger downfall in the investment. Task emphasizes that losses are a part of trading and that the key is to minimize losses and maximize gains consistently over time.
In conclusion, Task reiterates that success in trading is about maximizing the number of right trades rather than focusing solely on the monetary value of each trade. He emphasizes the importance of sound money management and allowing trades to play out based on predefined rules and parameters. Task suggests that success in trading comes from a combination of minimizing losses, maximizing gains, and adhering to a well-defined trading strategy.