Trading Nut | Trader Interviews - Forex, Futures, Stocks (Robots & More)
183: Funded to $3.2 Million, ICT Trader Explains His $60k Profit Split Nightmare
Podcast summary created with Snipd AI
Quick takeaways
- Focus on learning how to trade properly and developing skills, rather than just making money.
- Personal growth and self-awareness are crucial in trading and can have a direct impact on performance.
- Prioritize learning how to trade effectively before seeking funding and managing larger accounts.
- Risk management is crucial, with a focus on cumulative risk and trade size.
- Understand the macro and micro aspects of the market to master price charts.
- Continuous learning, perseverance, and a long-term outlook are keys to success in trading.
Deep dives
Importance of Letting Go of Outcome
One of the main insights from the podcast episode is the importance of letting go of the outcome of trades. The speaker emphasizes that the focus should be on learning how to trade properly first, rather than solely trying to make money. They share personal experiences of blowing up accounts and struggling with risk management. The key takeaway is that becoming consistent and profitable in trading requires developing a mastery of skills and having a long-term outlook.
Focus on Personal Growth and Self-Awareness
Another main point discussed in the episode is the significance of personal growth and self-awareness in trading. The speaker shares how they went through a transformative process, both personally and in their trading journey. They highlight the importance of recognizing and addressing weaknesses, such as psychology and risk management. The episode emphasizes the need for traders to work on themselves and their mindset, as this can have a direct impact on their trading performance.
Advice on Funding Challenges and Trade Management
The podcast also delves into the speaker's experience with funded trader programs and trade management. They emphasize the need to focus on learning how to trade properly before seeking funding and managing larger accounts. The speaker highlights the importance of not overtrading, managing risk effectively, and being cautious with profit splits. The episode offers insights into the pressure and challenges faced when trading with funded accounts and recommends diversifying risk by trading at multiple firms.
Risking More for Initial Phase of Funding Challenges
During the first phase of funding challenges, it is necessary to risk more, around 1-2%, in order to achieve the required profit targets within the given time frame. This higher risk is justified as it is difficult to make a 10% return on a smaller account in a short period of time. However, it is important to avoid high-risk trades right from the start, instead using them only when down from the initial balance with limited time left.
Importance of Managing Risk and Avoiding System Hopping
Risk management is crucial in trading, with special emphasis on cumulative risk and trade size. It is recommended to limit the number of trades opened to avoid excessive risk. As the accounts get funded, the focus shifts from making huge returns to preserving capital. Long-term thinking and treating trading as a business rather than a hobby are key. Psychological mindset is also important, as traders must learn to submit to the uncertainty of market outcomes and trust the numbers behind their strategies.
Understanding Market Direction and Staying Informed
To master price charts, it is essential to understand the macro and micro aspects of the market. This involves staying informed about current events and economic pressures that impact price movements. It is also important to recognize that markets generally move in one direction, driven by the interests of smart money. Traders should align their technical analysis with the fundamental context and operate within specific trading sessions to increase the probability of success.
Managing Multiple Funded Accounts
The trader manages around 13 funded accounts from different firms using a trade copier. Each account receives the same trades, with risk multipliers set to adjust position sizes based on the account balance. Risk management remains a priority even with larger funded accounts, as one bad trade can wipe out the profits. The trader emphasizes the need for focus, discipline, and the realization that any account can be destroyed if risks are not managed properly.
The Journey of Continuous Learning and Long-Term Goals
The interviewee emphasizes the importance of continuous learning and perseverance in the face of challenges. Trading is a long-term endeavor, and traders should focus on the process rather than immediate financial gains. It takes time to build the necessary skills and mindset to succeed. Long-term goals, such as managing multimillion-dollar accounts, should drive traders to stay motivated and committed to improving their trading abilities.
Recommended Resources for Traders
The interviewee suggests two valuable resources: the book 'Market Wizards', which provides insights from professional traders across different markets, and the podcast 'Chat with Traders', which offers real-life success stories and trading wisdom. Additionally, the trader highlights the utility of Twitter in accessing a community of successful traders and gaining exposure to different perspectives and trading strategies.
Effective Trade Management and Exit Strategies
In terms of managing trades and determining exit points, the trader follows a systematic approach. Scaling out of profitable positions is done at specific times, such as the end of the day or during slow market periods, to reduce overnight risk. Emphasis is placed on minimizing emotional decision-making and avoiding excessive overnight exposure. The trader prefers to sleep well at night and aims for consistent, sustainable profits rather than high-risk, high-reward trades.
Focus on Understanding Order Flow and Psychology
Understanding order flow is paramount in comprehending market movements. This involves studying market dynamics, recognizing emotional patterns, and grasping the intentions of smart money. The trader highlights the significance of adopting the right mindset, submitting to market outcomes, and treating trading as a business. Developing a strong mental and emotional framework helps traders persevere and make sound financial decisions.
Using Trading Platforms to Optimize Trading Experience
The trader relies on MetaTrader 4 (MT4) as the preferred trading platform. Additionally, TradingView is used as a supplementary tool, allowing the removal of profit and loss (P&L) figures to reduce emotional influence. This separation of P&L from the trading environment helps the trader focus on trading decisions based on price action and technical analysis without undue distractions.
Final Advice: Don't Give Up and Focus on Long-Term Goals
The interviewee encourages traders to stay persistent and not give up, despite facing challenges and losses. The journey requires absorbing lessons from losses, managing downside risks, and thinking long term. Belief in the potential for significant profits and the aspiration to reach personal financial goals should be the driving force to keep trying and improving as a trader.
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