The Single Biggest Secret to Profitable Trading (Surprising)

#lancebrightstein #stockmarket #daytrading

[mysteriousgate]

Well... the truth is...For a discipline trader they only focus on 1-2 setups, which means only trade on A/B trades. And they keep adding positions once market is on their side. Which method is actually equivalent to the "exponential position sizing" that you've just called. In other words, A-trades are the trades when market is proving you're right. So you keep adding to it, just like a opposite Martingale system, your size is "exponentially increased" but when you're right. But guess what, even guys here that you know this secret(keep adding winners), you're still not gonna to make it right here right now. You still got to learn start from 'equally sizing' to cultivate yourself to be a consistent trader(that's the first thing!). If you start by adding positions then your mind will drive you crazy and you will be soonly blow your account and give up to be a trader soon.

[arianfusha]

I've re-watched every video I can find with Lance on it. This guy is very smart, not just in trading, but in being a successful human being. I really appreciate all the advice Lance and SMB. Thanks.

[DayWaiting]

I don’t know who I love more, SMB for putting out these videos (especially w/ Lance), or Lance for putting himself out there for us to learn and grow from. Lance is truly gifted at explaining things in very understandable, bite-sized, relatable pieces. I’m so grateful to both SMB and Lance. Thanks you so much!

[transcendenttrader]

Nobody can or should ever question advice given by you, Lance. I do just wonder, however, if it would make sense to simply eliminate C and D trades and mimic an exponential approach on the trades you do take (A and B). This seems like it would be a less complicated solution, with the same result, for retail traders. Having the self control and restraint to stay away from C and D trades in and of itself would propel most traders into profitability. Regardless, the message of simply knowing your A setups like the back of your hand is priceless on its own. Thank you for this!

[theresahopkins]

What is the best strategy to enter crypto trading now for someone with more or less than 6k

[mikeanis]

Been following SMB for over 3 years now and Lance definitely hit it out of the park with this video. He has an amazing way of breaking down the importance of bet sizing here and like Bella says "when you see that A+ setup, you got to swing the bat hard!" It's much appreciated to see this information broken down for any developing trader, thank you Lance!

[smbapplicantross]

"Bet big when the situation calls for it." - Lance B

"Where other traders make an average trade, I can make my month on that." What a great quote on the crucialness on focus on A trades. That expected value chart demonstrating the outsized r/r of A plus trades is extremely valuable.

[Derek_]

Things that jump out at me for this type of bet sizing is being able to correctly identify the different set ups strengths. If A+ set ups are so rare I'd wager that most people trying to implement this exponential sizing will incorrectly bet big on set ups they perceive to be A that aren't. If we could correctly identify this then we would just never take D trades to begin with. So this style of sizing is definitely suited for advanced traders. Which I don't disagree with at all. An advanced trader with years of experience can differentiate the strength of their set ups better but you'd think they'd be better at just not taking the D set ups to begin with...

I think one thing to take account for besides ABC or D set ups is just market conditions. Certain market conditions are tough to trade and others easier. Sizing up during favorable market conditions and sizing down during unfavorable is just as important. In favorable environments even D set ups will perform more like C set ups. And in unfavorable conditions your B set ups are acting like C and so on.

One last thing to add is I'm surprised he didn't mention anything about max size vs your account size. As in if your usual size is 1% of you total account then using a 50X increase in size on your A set ups is just asking to blow up your account. Your account can't tolerate swings of that magnitude. There still has to be a max risk % of your account for bankroll management. I personally don't know the magic number of what it should be. Maybe 10% of your account? Unless your usual size is only like .25% or less then I can see bigger jump ups in risk to justify the 25x to 50x size.

[KpxUrz]

I hear the message loud and clear. It can take many years of experience, and thousands of trades (or more) to finally see the writing on the wall. Which is: too much trading and too many stocks or markets can make you spin your wheels and get stuck. My conclusion is that it is far better to spend much less time trading and being stuck in many positions, and far more time just watching, observing, thinking, and waiting. Being an active trader can make you your own worst enemy. I think it takes a very great dose of wisdom and restraint to resist overplaying the game, to keep most of the powder dry, and to really judiciously await and identify the best opportunity, and then hit that opportunity hard! I will be working towards that.

[jenicarobinson]

I love how Lance explains everything. All the videos posted in this channel are very educational and very helpful to all traders especially those who are struggling towards profitability including myself. I would like to say thank you all very much for your efforts on creating helpful content like this. God Bless You all! I hope you bless more than you ever deserve.

[deanayer]

Okay, I completely agree with what you are saying and this is shockingly analogous to card counting in blackjack, track a count to determine when you have advantage, based on the amount of advantage scale your bet up accordingly, flat bet normally (1 unit) then use the Kelly Criterion or a version of it for scaling as things swing your way, make sure you arent betting more than a couple percent of your stack (gamblers risk of ruin) and off you go - the video fails to make clear how you determine which bet you are looking at though - what makes one bet an A, B, C, or a D? how do you spot it in advance? in real card counting you want to be able to have the big money enter the game mid-shoe when the advantage is yours so that big money never even makes a C or a D trade. The scaling isn't the issue if you understand the true risk, its determining the risk or advantage and the amount of it just before or perhaps even during the trade. Tell me that part - the realtime trade grading part, the rest is just mechanical.

[diptidixit]

This is helpful… I now wonder I did reverse … After having a home run with big lot size and earning good amount I continued trading big size… Only if I could categories my trades I would have traded smaller amount on the next trades which were C and D category… I was only working on my Psycology but this is so simple and objective…. I won’t lose more by trading bigger lots anymore on C n D trades… Thanks a ton 👏👏👏👏👏

[hendersonsobers]

I really learn alot from the SMB videos, but this is perhaps the most educational, most insightful one that I've seen. Thank you Mike and Lance.

[vnep]

The most successful traders I know started small, focused their efforts on becoming consistent and disciplined, and the majority of their rules based trade work. Some may go most of a week without any trades then find a great one at the end of the week. You also have those who are suggested in this video who do well doing something completely different. They'll take a ton of losses and still make bank. Whatever your strategy is, know what you're doing and stay consistent.

[bhobba]

Fantastic advice. A well-known trader here in Australia wrote a whole book on money management where he emphasised you make your profits on just a few trades that you ride for all they are worth eg if in an uptrend as the trend continues, you switch from intraday, to daily, to weekly, even to monthly management increasing position size as you go. Of course, he is mostly a trend trader and wrote books on that. The beauty of it was the technique worked didn't matter what time frame you traded. The only trader/investor it didn't really work for is buy and hold Warren Buffett types - but the idea of having your portfolio weighted to your best 'bets', Buffett certainly uses eg Apple.

[shawnclark]

The key is being able to tell the difference between the different trades. And if you can do that, why not just stop making D trades? Patience.

[FoursideAssetManagement]

I think "betting big" is great presuming you are professionally measuring your trading results and accurately know your win rate. This would be great to discuss.

A loss has a greater statistical impact than a gain, which means your exponential chart has more application on the side of REDUCING position size for mediocre setups, as opposed to increasing your size for winning setups, especially as you mentioned that most traders have low overall win rates.

Anyway, thank you lance/smb, really grateful for you and your videos.

[Makul-rtsz]

I always felt this way about A trades, but everywhere I look people recommend the same thing over and over again of never betting more then 2-3% on a single trade..of course I never listened, and finally someone proffesional says it💪🏻

[sanketsaharkars]

I was betting 3x for A+ trade and 1x for all other, but this is complete gamechangere, Thank you for sharing

[antonulybin]

You can't play only AAs and KKs in poker, but you can trade only A+ setups in trading. And if you don't trade Bs, Cs and Ds, you can use for your As equally sized bets.