Video Transcript:
I’m going to show you why your strategy feels like it stopped working, even when it actually still does, and why most traders fail because of this, no matter how good their strategy is. Because even a perfect strategy doesn’t work if you can’t execute it. Now, let me ask you something. Would you trade this strategy? As you can see, the equity is going up. Looks pretty good, right? Now, what about this one? This one looks terrible. A losing strategy, right? But here’s the thing. These two are exactly the same strategy. Do you see it? The second one is just a zoomed-in part of the first one. The only difference is when you start trading it whether you start here or here and you have zero control over that. And that’s the real reason why most traders fail. Even if they have a good strategy, it’s where they start.
Now, let me show you something interesting. There are basically three ways your equity curve can behave when you start trading a strategy. Scenario number one: you start trading and equity goes up right away. You start winning, you feel confident, you feel like you finally figured it out. So what do you do? You increase your risk and that’s exactly when the market hits you. A bad period comes, but now you are trading bigger size. So the losses hurt much more, and eventually you quit. Not good.
Now scenario number two. You start trading and equity goes down. You take a few losses, you feel uncomfortable, and you start thinking, well, maybe this strategy doesn’t work. I need to fix it. So you start changing things, right? And you destroy a perfectly good strategy just because you started trading it during a bad period.
Now, scenario number three. Equity goes sideways. Nothing really happens. It is slow, boring, feels like it’s leading nowhere. So what do you do? You stop trading it, right? Or you start tweaking things again and once again, you ruin it.
So here is my punchline. It doesn’t matter if the equity goes up, down, or sideways. Most traders mess it up anyway. It has nothing to do with the strategy itself. The real problem is that you can’t handle the equity curve.
So how do you not mess this up? I wish I could give you some magic trick here, but the truth is, there isn’t one. The good news is, this is fixable. And here is how. First, you need to know your strategy’s numbers. And the way to get them is through backtesting. Your goal is to understand your strategy’s worst drawdown, longest losing streak, and how it behaves in the long run and then assume it will be worse when you trade it live. Give it some buffer. I recommend 30% worse than your backtest. That way you know what to expect.
And when you are trading your strategy, if your results stay within your tested boundaries, you change nothing. Nothing. You focus only on execution. So not on predicting, not on fixing, not on optimizing just execution. Okay? Your job is very simple. Take the trades exactly as planned. Enter where you are supposed to enter, exit where you are supposed to exit. And that’s it.
Because you don’t have control over how your strategy performs in the market right now. You only control one thing your execution. And this is exactly what we focus on every day inside our live trading room. Execution, discipline, real trades. We trade live every day, and we help traders get funded and stay funded. If you want to join us, click this link
Now, one last important thing I want you to try. Set yourself a challenge. Take 20 trades in a row with perfect execution and zero deviation from your trading plan. Don’t care about the profit, okay? Just focus on doing everything exactly right. Most traders can’t even do that. So start there.
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