I CONFESS that I always waited for THAT TRADE THAT WOULD MAKE ME A MILLIONAIRE and regardless of the math not adding up, I SEARCHED FOR IT LIKE THE HOLY GRAIL. I CONFESS that I fell into the VILE TRAP of high Leverage, cheap COINS (SHITCOIN), and the quick movements that only LEFT ME DRY... I always wondered what successful traders saw that I didn't, why they were winning while I kept seeing red numbers.
I CONFESS that I ALWAYS WANTED TO HAVE THAT GREEN LOGBOOK AND SHOW IT AS A SYMBOL OF HAVING DEFEATED THE MARKET.
SHOW THE HEAD OF THE MARKET IN MY OWN HAND. BUT THE ROADS OF LIFE (AND TRADING) AS THE LITTLE DEVILS SAY ARE NOT WHAT I EXPECTED, ARE NOT AS I IMAGINED, ARE NOT AS I BELIEVED...
THEN I UNDERSTOOD THAT IT WAS NOT ENOUGH TO FOLLOW A "WHALE" OR COPY A FAMOUS TRADER OR LEARN BY WATCHING THAT TRADER YOU ADMIRE.
BECAUSE I HAD UNDERSTOOD THAT IF I DIDN'T UNDERSTAND WHAT I WAS DOING, I WOULD GO NOWHERE. I wanted to understand what Livermore, Wyckoff, or Dow had discovered: that the market is a game that can be played with a method based on ACCURATE DATA, not on MAGIC.
The truth is that, despite reading, listening to signals, and following advice, profitability remained a mirage that kept taking away my SLEEP
I got tired of dead ends, and when I was left alone, I faced my old addiction: the search for the perfect entry, the magical setup, or the secret indicator. NONE OF THAT EXISTED.
AND I COULDN'T FIND THE EXIT.
If you are trapped in that cycle of losses, let me tell you something you will learn through experience: THE HOLY GRAIL DOES NOT EXIST. THE MILLIONAIRE TRADE IS AN ILLUSION
There is no trading that will make you a millionaire overnight. What does exist is the psychology to endure the process and the discipline to learn from each mistake and move forward. BUT ABOVE ALL, something MORE IMPORTANT: CREATE YOUR OWN METHOD AND YOUR OWN SYSTEM.
The method is not just for experts; it is also for you and me.
I'm not the only one saying this; two great thinkers said it: René Descartes and Perry Kaufman.
Descartes left us a powerful piece of advice for trading:
Build a method that you understand and that adapts to you. This implies:
Do not accept anything as true without evidence.
Break problems into manageable parts.
Go from simple to complex, step by step.
Review and check the entire process.
Have you ever wondered if you truly understand what you are doing when trading? Or do you just repeat what you see on the internet? Mastery begins when you question, adapt, and create a system that reflects how you see the market, your strengths, and your risk tolerance.
8 simple steps to create your system according to Kaufman
Define your goal:
Do you want quick profits, long-term stability, or to protect your capital? Livermore noticed repetitive patterns in prices that allowed him to anticipate movements; you also need a clear idea of where to start.Kaufman points out that you should know what you want to do before
creating your system. Having a premise to start with, if
you are one of those who has a theory about why prices move
after economic data, that can be a way to focus a strategy for a system or look for one already formulated with which you feel comfortable.
Choose simplicity:
Remember Occam's Razor: the simplest explanation with the fewest assumptions is usually the best.
Do not assume anything:
Go to the source, test, practice. Do not take anything for granted without data.
Test the simplest parts first:
Each rule must make sense and contribute to the whole.
Review errors of omission:
A small failure can ruin the entire system.
Question good results:
If something seems too good to be true, look for the error before trusting blindly.
Eliminate shortcuts:
Follow the process rigorously so that your system is robust.
Start from the end:
Define your goal and work backwards to build the system.
Risk is your best ally
Many seek the perfect entry, but the difference lies in how you manage risk:
Use Kelly's criterion to calculate how much to risk.
Set intelligent stops (for example, 2% below the entry price or based on the ATR).
Never move the stop against you.
Define clear profit objectives with risk/benefit ratios of at least 2:1.
Adjust position size according to volatility and distance to the stop.
Backtest, review, and be patient
Do not discard a system due to a bad streak. Results are validated in the long term. Analyze metrics like Win Rate, Sharpe Ratio, Profit Factor, and drawdowns. Learn from each operation, improve, and adapt your method.
WITHOUT BACKTESTING THERE IS NO PARADISE. FORGET ABOUT CREATING A SYSTEM WITHOUT TESTING IT WITH HISTORICAL DATA AND THEN WITH REAL DATA. A SYSTEM STOPS BEING AN ILLUSORY SYSTEM AND BECOMES A REAL ONE WHEN YOU PASS IT THROUGH THE FIRE OF THE MARKET IN REALITY AND RECORD EVERY DETAIL.
Long-term mindset: the true edge
Accept negative streaks.
Review and adapt your system.
Trust in statistics and discipline.
Have multiple systems for different market conditions (YES, THIS IS ADVICE FROM AN EXPERIENCED TRADER TO A NOVICE TRADER: THERE IS NO SINGLE STRATEGY THAT CAN HANDLE EVERYTHING, SO IT IS BETTER TO TEST SEVERAL AND CREATE YOUR SYSTEMS THAT CAN ADAPT TO DIFFERENT MARKET CONDITIONS)
As Ed Seykota, one of the most influential traders, said:
"It's not about being right, but about making money. And for that, you need your own system and the discipline to follow it."
If you are looking for millionaire trading, this is not your place. But if you want to build a real path, step by step, with method, patience, and self-knowledge, then welcome.
Here begins what really matters: your own system and your growth as a trader.
If you want to learn more about how to create your own system, in the next installment I will be providing more content on how to do backtesting with the key metrics that help you on your trading journey.
It's time for reading.
IlB
