YOUR EXIT STRATEGY IS A PRAYER — Why 90% of Traders Lose

Rashad Bilal (0:00)

That was tough.

All right, let's get into talking about trading. Let's talk about trading. Let's talk about trading mistakes, the biggest trading mistakes, and also how to trade successfully in a tough market.

Troy Millings (0:15)

I love this question. A person asked me, hey, if I'm running into a rough patch over the last quarter, what advice would you give me for trading the markets now? And my thing is if you're having, my three things that I always go to is what is the target that you're using? Are you trading the same assets over and over again? And are you recording your trades and replaying them? And I know people get tired of me saying that, but 90% of people who trade don't record their trades.

So if you're hooping and you say, well, I think I was in triple threat properly, but you had nine turnovers and the ball was stolen from me four times, you won't be able to see it because the emotion is so high.

But the big thing that I'm seeing for a lot of people who don't trade futures, you're jumping around trading different assets and you don't know the personality of them to be able to trade them well. Like I can use the same target for NASDAQ, Dow, UB, mini red wheat and crude oil. They all have different temperament, different buyers, different sellers, and they all move at different speeds. So even though I'm using the same target, it's gonna take me a lot longer to get a 16 tick target knocked out on ZB, then it will crude. So I think one of the biggest lessons if you are looking to do better in trading is you have to trade the same assets over and over again and know the temperament of them like the back of your hand so you can have a sustainable win. Because if not, if you're trading different assets all the time, it's gonna be really hard to know what the outcome is gonna be.

SPEAKER_3 (1:55)

Yeah, I agree with you on that. I'll just add really quickly, I think understanding what you're investing in. I feel like over an abundance now I'm hearing, I don't know what that company does, but the chart looks good.

Troy Millings (2:07)

Bro, and they're looking at a four-week chart.

Rashad Bilal (2:11)

I'm like, how far do you go out?

SPEAKER_3 (2:13)

They're like, it looks good on the month.

Right, well, let's peel back a little bit. Let's look at it in two years, five years. Let's look at it from its inception, how has it performed, right? You might be catching it in the down cycle. Even when we looked at service now a few months ago, I'm talking about, hey, this is at the bottom here, right? We're below our 400 here, right? So if you look at it now, you're like, oh, it's had a great two months. Well, pull back about a year and a half, two years, and see what it really was at and the position we're in now. Understanding it is important, because if you dive deep into some of these companies, it all starts to make sense. The picture becomes very clear for you. There's a reason why I knew Celestica, because I was on a rapid whole dive trying to figure out, if a data set needs all these things, what companies need to be inside of there? There's a reason why we knew Faber-Net, there's a reason why we even knew Corning, which I think is an incredible company.

The story exists, we just got to go find the companies that are going to play a major part in it. So the understanding piece, not just looking at a chart and saying, these charts are good, I can read the candles, this is good, I'm investing in it. No, it might not be the season for it, like you said, seasonality, or you might be caught in an uptrend that had just reversed from an extreme downtrend. So understand what you're investing, please. I mean, it sounds like a simple thing to do, but most people are just saying, I saw it on Instagram, they label it as the top five stocks of the month, so I'm just gonna go with it.

Troy Millings (3:42)

Rashad, what about you?

Rashad Bilal (3:44)

The biggest trade-in mistake that I think people make is getting emotionally attached to trades.

And that's the thing that is like, when your exit strategy is a prayer, or you trying to, you know, will your way back into profitability, or you just are afraid to sell because you're emotionally attached to it. Like, the worst thing, you can't have any emotions in trading, investing, but definitely trading. And I think a lot of times, you know, when you do something, you think, okay, you know, you made an educated decision, and you don't want to admit that you're wrong. But sometimes the market, well, all the time, the market is always right. It's never that you're right, the market is right. So if you happen to be in unison with the market, and enjoy the ride, but if the market takes a downturn, don't try to use your intelligence to overpower the market. It's like swimming up a stream.