This Money Mondays is an extension of last week’s discussions on Understanding Trading Strategies. Today, we will be covering the 5 Main Strategy Components and How to define rules around each area that is required for successful trading.

The Following is Critical When Building Trading Systems:

A Defined Set of Rules Around:

• Entry
• Exit
• Trade selection
• Directional bias
• Market Selection

A Defined Set of Rules Around:

• Capital allocation
• Position sizing
• Money management

A Defined Set of Rules Around:

• Risk management
• Trade management
• Routine, trade planning and discipline

You can learn more HERE!

Today we will be discussing the 5 Main System Criteria:

“Trading success requires you to have a good method and be a good trader in order to succeed…You can’t have one without the other and expect results!” – SK

Watch this week’s Money Monday (Trader TV Show) below  to learn about the 5 Main System Criteria!

Our next 2 episodes are geared towards helping you understand the nuances of what goes into a trading system and how to approach understanding different types of trading strategies!

What Is A Trading System?

A trading strategy is the application of making money trading.  Despite the different types of traders & strategies, there are several aspects that remain a constant amongst all traders:

• Trade selection & market selection
• Position sizing & money management
• Probability analysis
• Risk management & trade management
• The need for a trading plan

Part 1:  Discretionary Trading vs Automated Trading

Traders have options towards defining how they approach the markets.  Some prefer active involvement and others rely on less human interaction by way of computer application. 

The 3 Main Categories of Strategies:

1. Discretionary (subjective/hands on)

1. 1. Aligns information, price & indicators to form a decision to buy/sell.
   2. You are 100% the one in control of the strategy.

2. Automated (pre-built/hands off)

1. 1. Create computer rules based parameters to trade robotically.
   2. You are not in control once it is turned on.
   3. Your only control is to turn it on/off.

3. Rules based combination (subjective/pre-built/hands on)

1. 1. Combines discretionary decision making using pre-built rules based parameters.
   2. Allows for human intuition with rules base structure.
   3. Preferred style.

Watch this week’s episode of Money Mondays where Sean explains this subject in detail! Stay tuned for Part 2!

There are essentially 2 categories of trader analysis. In order to understand the different trader types and ways to read the market, it’s important to understand what type of analysis is used for each type of trader. On top of this, it’s important to know what types of traders are primarily trading each type of asset class.

Stocks/Options

• Have both technical and fundamental aspects that affect price movement.
• Need to understand – Sector risk, market risk, company risk, price risk & liquidity risk

Futures/Forex

• Have more of a technical weighting that affects price movement.
• Need to understand – Market risk, price risk & liquidity risk

Day traders are more focused on the technical side of trading as positions are liquidated prior to market close and most often are not affected by fundamental market catalysts during ETH.

Watch this week’s episode of Money Mondays where Sean dives deep into this subject!

In this week’s episode of Money Mondays, were going to break down the key reasons why you would want to consider day trading as a source for income.  It’s important to know this when venturing down this path because it could change your life once you understand the WHY behind it!

These are the TOP 10 reasons to day trade :

• Transferable
• Travel/Digital Nomad
• No Bricks & Mortar
• Trade for daily income
• No boss or employees
• Low start up cost
• Low operational costs
• Time freedom
• Better lifestyle
• Challenging & Rewarding

Moreover, we need to discuss WHY you should start day trading FUTURES over other markets. Futures can really provide you with the lifestyle you want!

These are the following TOP 10 Reasons to day trade FUTURES over other assets :

• Exposure to global assets
• Offers leverage with low daytrading margins
• No pattern daytrading rule
• Less capital needed upfront to start trading
• You can be any type of trader
• Markets are open 23 hours/day 6 days a week
• Less gap risk
• More transparency than spot forex market
• Better liquidity with more intraday volatility
• Numerous opportunities over less instruments

On our Money Mondays E4  we explained everything you need to know about this topic!

Watch our Money Mondays E8 bellow!

Where Sean explains exactly WHY choose day trading futures as a source of income!

In this week’s episode of Money Mondays, we are going to teach you everything you need to know in order to start day trading. We broke down in 2 steps and created a handy guideline you can follow when setting up your business.When getting started as a daytrader there are several steps that are required before you can actively trade. We will be listing these details below in order of importance.

Step 1:  Equipment and Internet

Dependable Trading Computer

• Laptop/Desktop
• Adequate Ram
• Fast Hard Drive
• Monitors
• Can use 1 (laptop)
• Multiple is preferred (easy to process data)

Good Internet Connection

• Hard line is best for connectivity
• Wireless can be used with caution
• Avoid public networks if possible (Starbucks etc.)

Must have risk capital

• $10k minimum (depending on the market your trading)

Step 2: Selecting A Broker & Platform

Brokers

• Commissions
• Location
• Funding requirements
• Required trading volume
• Margin rates
• Tradable Markets/Asset Classes
• Customer service

Market Data

• Direct access
• Unbundled tick data
• Live data feed (Real Time/Tick Level)
• Avoid delayed data

Trading Platform

• Computer application
• Web based

Vendors/System/Compatibility

• Does your educators/systems work on your trading platforms?

Check out our Money Mondays Episode #7 to dive deep into this subject and learn how to start actually trading and making a reliable income.

Trading is a business not a hobby.  Many people get excited about the appeal of making very quick and scalable money. What new traders often overlook is the HARSH REALITIES of being a trader. Be it, trading is one of the most transferable businesses that can produce an income and lifestyle beyond your wildest dreams, it’s also one of the most underestimated professionals.

Let’s break this down with some key Q&A’s

• Who Is Responsible For Each Trade?

• • You Must be Responsible for your own actions.
  • If you want to succeed, you must do the work 
  • You have to Be Accountable
  • You’re the one pressing the buy/sell button

• How Is Trading DIfferent From Absolute Jobs?

• • No guarantees of profits 
  • It’s not always Black and White
  • The market changes every day
  • It’s not like a mechanic or logic based business

• How Do Traders Make Money?

• • Profits come from skill not just strategies and software
  • Must have a strong desire to succeed 
  • Trading will act in waves of good/bad 
  • Must understand Risk and Money Mgmt

• What’s the Biggest Misconception of The Trading Space?
  • Must have risk capital  
  • $10k minimum (futures/FX)/more for other industries)
  • If you don’t have $$ you must seek a prop shop for funding.

• Why do new traders often fail in the first 90 days?
  • Because they don’t treat trading as a business (hobby)
  • Even if you only do it part-time

In this Episode of Money Mondays, we answered these and other BIG questions of the TRADING WORLD. It is time for a reality check! You can watch the video below!