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You want to make more money with your trading, right?
Adrian here, from Enlightened Stock Trading, and I’m on the shores of Lake Como at the moment. We’re in the middle of this journey, we’re traveling for nine months. We’ve been on the road for about four months or so right now. And one of the things that’s impressed me about the life here in Como, is just the pace of it is just so much slower than everywhere else that we’ve been.
And I’ve talked to a lot of traders recently about how they can improve their profitability and make more money. And there’s this assumption that traders tend to make, that more activity will translate into more money, and it’s just not so, because just like most things in trading, they’re counter intuitive and if you try to trade more often, generally what’s going to happen is you’re going to burn out, you’re going to have more losses, you’re going to suffer more slippage, you’re going to pay more commissions.
So basically, everything that you want to reduce will increase, and everything that you want to increase, like your profits, is going to fall. So, if you want to make more money trading, then you’ve got to do something different. And the best way to improve your profitability trading is actually to trade less, to keep your positions for longer, to hold your position for longer, to trade less often, to take only the very best trading setups. And so how do you do that?
Well, to start with, if you’re day trading, then one of the best ways to improve your profitability is to move to daily charts, rather than intraday. Because on a daily chart, you can get far bigger moves, you can make far more money, and it’s a way better lifestyle, because let’s face it, I mean you can stare at the screen for several hours every day, day trading, or you can spend somewhere between 10 and 30 minutes a day running your end of day trading system.
Now you can make huge money using an end of day trading system, spending half an hour a day. But for some people that’s still not enough. You know, if you want to increase your return for effort from your trading even more, what can you do? Well, you actually don’t need to even trade daily to make very good returns. There’s several ways you can configure your trading systems so that you can make better returns, but also have much higher return for your effort, because it’s not just about the total money you make, it’s how much money you make per unit of time you invest. And so, what you can do is extend your timeframe even more. Now, the obvious things are to go from a daily chart to a weekly chart, or to a monthly chart. That’s possible. You can definitely do that, but you can be a little more subtle as well.
I was working with one of my trader mentoring students and what we were designing for him was a system that enters trades only once a week, or only once a month. But you can actually automate exits using things like automated trailing stops with your broker, so that you don’t actually have to do any work to exit your trade. So, for instance, in interactive brokers, there’s a thing called an automated trailing stop, and what that allows you to do is, say, if the stock drops more than, say, 20%, or 10%, or 25%, from its most recent high, or the highest high since you entered the trade, then you get out. And the great thing about that is, once you’ve entered the trade and you place that sort of order, you now no longer have to do anything else to manage that trade for the entire life of the trade. It will automatically take you out when your trailing stop gets hit. And if your stock keeps going up, your trailing stop price, that you’ll get out at, will keep going up as well.
So you see, even on a daily chart, you can reduce the amount of work that your trading takes you, and that will increase your return per unit of effort, per unit of time that you spend on your trading. So, what I want to encourage you to do is, think about how can you trade less? How can you make more money for each unit of time that you spend on your trading? Because that is the path to true freedom and success. Because if you’re not trading for freedom, what’s the point? You may as well have a job. Having a job is probably easier and just going to pay you more consistently.
But if you want freedom, then what you need to do is develop a trading methodology that allows you to make money with very little time, and a daily system, an end of day system, or a weekly system or a monthly system, or some sort of hybrid like we’ve been talking about on this video, is the best way to do that.
Now, if you want to learn more, if you want to learn how to build confidence in your trading system, no matter whether it’s a daily trading system, end of day, weekly, or monthly trading system, click the link below and download my trading system confidence cheat sheet, and you’ll learn the steps that I go through for every single trading system that I create, so that you can follow those same steps and build rock solid confidence in your trading system, no matter whether it’s a daily, weekly, monthly system, or some sort of hybrid.
My name is Adrian Reid. This is Enlightened Stock Trading, and I want you to make more money for every minute that you spend focusing on the market, and that’s what Enlightened Stock Trading is all about. Click the link below and download my trading system confidence cheat sheet, and I’ll see you in the next video. I’m off to enjoy Lake Como. I’ll see you there. Bye for now.