Only Take the Best Trades

"One of the things that traders do when they start out is they take too many trades. And the best way to stop losing money is to only take the very best trades. So, if you're looking to buy, only buy above a bull bar closing near its high. If you're looking to sell, only sell with a stop one tick below a bear bar closing near its low. And when you're buying, you either want to be buying during a very strong trend or during a pullback in a weaker trend. When you sell, you only want to be selling in a very strong bear trend or on a little bounce. And when you get that bounce, wait for a bear bar closing near its low and sell below that. And if you stick with that style of trading initially, that will get you to winning as quickly as possible."

Al Brooks

This is what I do for the most part. I have a few more tricks in the bag, but this is the core. I sell at strong resistance and buy at strong 5m or 15m support. I buy pullbacks, and I buy momentum. I keep it simple.

There are a lot of contradictions that can show up if you're trying to do all three at once, so you need to know what the market looks like intimately before you just start buying above every bull bar.

Mark Douglas, Trading In The Zone :

"I don't think I could put the difference between the consistent winners and everyone else more simply than this: The best traders aren't afraid. They aren't afraid because they have developed attitudes that give them the greatest degree of mental flexibility to flow in and out of trades based on what the market is telling them about the possibilities from its perspective."

Mark Douglas

This is also what I do for the most part. When you're trading momentum and following what the market is telling you from its perspective, you can still get stopped out when it reverses or goes into a range.

When you buy a pullback, you're betting the current momentum will stop and reverse. So you're not purely following what the market is doing — you're trading the probability of a pullback. See how this can get complicated?

This is why, in a previous article, I told you to up your technical analysis. It's critical. More trading does not automatically equal more money. Al Brooks would argue that the more you actually know, the more money you can make. I'm with the pro on that.

Mix a little Al Brooks with a little Marky D.

You become a different kind of trader. Every time you're taking the higher-probability outcome, you're also not giving a fuck about that specific trade. You don't realize it at first, but you're turning into a monster while everyone else is sitting there practicing "patience" with one trade a day because they're scared.

Don't be a scaredy-cat.

"It's just trading and it's just money."

Tom Hougaard

If you want the whole thing written down — one signal, 1:1 risk, five months of NQ backtests — see The System.