I am sure all of you want to get the good trades. You want to place the very best trades. You want to avoid the losses and go straight to the good trades. It is just that many traders are unwilling to go through the process needed to get to the good trades.
And you are correct if you believe it is a process to get to the good trades.
The question is how fast can you take small losses and small failures?
I have gone through all three trading stages. The technical indicator cycle, price action trading cycle, and finally the order flow trading cycle. Throughout all of those trading learning processes there were losses that I had to take and losing streaks that I had to go through in order for me to finally ‘get it.’
Lets say for the technical indicator cycle I had to go through a series of 500 trades, with the end result being I was down money. I was down money because technical indicators do not generate sufficient order flow to move the market.
Then I went through the price action trader cycle. I probably went through a series of 300 trades, with the end result being break even or small profit.
Then I went to the order flow trader cycle. I had to go through another series of 100 trades, with the end result being a small profit before I finally ‘got it.’
You cannot underestimate the importance of going through a large series of live trades in order for you to progress through the process and stages as fast as possible. You need to go through the process, place the live trades, risk a small amount. So that if you do take a draw down it will be very small.
The benefit is that after a few hundred trades, assuming you keep a journal, you review the trades, you think about why they won or lost, eventually there will be a few epiphanies along the way. I was looking for something better than technical indicators and I found it with price action. I was looking for something better than price action and I found it in order flow trading.
But there was no way I was going to make the rapid success and progress moving through the cycles unless I placed the live trades, sometimes a large series of them and then analyze what went right and what went wrong. I had to go through a few hundred or a few thousand trades in order to finally at the end of the process get to the good trades.
That is just the way it is, the way it has always been, and way it always will be. You shouldn’t be scared of the process. Keep your risk small, and keep educating yourself about order flow.
After a few hundred trades, things start to occur to you. You start to learn about various market environments and the placing of your trades. Certain things start to click together.
Now the question is how long do you want the process to take? How fast do you want to get over the few hundred trade hurdle, in order to finally get to the good trades?
Now I am not saying you should go and place 40 trades a day for the next two months. I am not suggesting that. You need to place the trades, according to your system rules whenever they fire off, then go back and analyze the winners and the losers. Spread that over a few weeks and few months and you can get through the process faster.
You get through the process faster, then you can get to the really good trades that will make you far more money than any of your previous systems ever generated. They will make you far more money than you ever thought was possible.