Part 5 - Trade And Risk Management

A Statistical Edge

Trade and Risk Management are arguably the most important aspects of becoming a consistently profitable trader. In this video we dive into the importance of thinking in probabilities and giving yourself the necessary edge in becoming a successful trader.

(**Please note that the examples given in this lesson are somewhat simplified (liquidity and counter-party issues arise when trading large accounts), thus emphasis should be placed on the principles of a statistical edge as opposed to the figures presented.)

Duration: 33 mins.

Download Spreadsheet (click ‘File - Make A Copy’ to edit)

A Comprehensive Trading PLan

A statistical edge is only as good as the process used to take advantage of that edge. In this lesson we explain that understanding the difference between Process-based thinking and Outcome-based thinking is what separates an unsuccessful trader from a consistently profitable one. We then run through the importance of a clear and concise trading plan and the importance of having the discipline to stick to that plan in order cash in on our statistical edge.

Duration: 37 mins.

Disciplined Execution - Part 1

We start off by running through the four cardinal sins of trading and how using a trading journal can help you keep tabs on which of these vital errors may be keeping you from becoming consistently profitable. We then introduce you to the Seneca Trading Journal and run you through how to use it most effectively.

Duration: 22 mins.

Download Seneca Trading Journal (click ‘File - Make A Copy’ to edit). This is a basic journal that has its limitations but is great for new traders and their first 50 trades.

For more advanced journaling I highly recommend using Edgewonk’s Online Trading Journal which has all the necessary capabilities to take your statistical advantage to the next level. Use coupon code “Seneca” for discounted rates.

Disciplined Execution - Part 2

In Part 2 of Disciplined Execution, we run through the 5 key factors to take into account when it comes to managing your stop loss. We also do a step-by-step rundown of our Gold trade, from entry to management, showing you the mistake we made that cost us a potential 22% profit. We end the lesson with a discussion on the importance of post-trade analysis in taking your trading to the next level.

Duration: 27 mins.