ICT - If I Could Go Back & Tell Myself What I Know Now - Volume 1

ICTShark · March 29, 2024, 1:46pm

Notes

This series is a hypothetical conversation with the younger Michael (aka ICT) about what he would do differently if he could go back in time.
Michael’s advice to his younger self:
- Avoid seeking approval from others:
  - Family: Often don’t understand or support the trading journey.
  - Friends: Usually only interested once they see success.
  - Co-workers: May discourage and mock you for your aspirations.
  - Strangers: Generally uninterested and don’t provide valuable feedback.
- Learn risk management first:
  - Focus on percentage gains/losses rather than specific dollar amounts.
  - Avoid unrealistic stop-losses.
  - Avoid over-trading and impulsive decisions.
  - Understand market behavior and risks associated with different trading times.
  - Stick to your trading plan. Avoid changing trading strategies mid-trade. For example, turn a short-term trade into a long-term one.
  - Be content with sufficient profits and avoid greed.
- Prevent life imbalances:
  - Manage family time and schedule it. Do not sacrifice family time for trading.
  - Keep a study and trade schedule. Maintain a disciplined approach to studying and trading.
  - Off days are off days. Take a break from trading.
  - Be patient with your development. You need a long-term perspective in trading.
- Stop buying retail logic and books:
  - Stop wasting money on books. The retail trading books and courses do not align with real market dynamics.
  - Avoid looking for hot hand gurus. Avoid relying on trading signals and advice from so-called experts.
  - Become your own signal generator.
  - Be willing to lose and learn from your losses. Losing is a natural part of trading and should be accepted as a learning experience.
- Stay away from social media drains:
  - Don’t join trading clubs. Developing a unique, personal trading style is more beneficial than following group thinking.
  - Don’t subscribe to alerts. Take responsibility for your trades.
  - Don’t count other people’s money. This will not help you in your trading in any way.
  - Don’t feel insignificant by contrast. Most people who present themselves on social media as successful traders are frauds (fake traders).
- Match your style to your personality:
  - Scalp if you make quick decisions.
  - Short-term trade if you can sleep while you are in it.
  - Don’t force yourself into any mold.
  - Don’t try to copy someone.
- Don’t change trading approaches:
  - Stick with one approach.
  - Avoid system hoping trap.
  - Every model loses. Accept it.
  - Find your unique model and grow from it.
- Settle on one setup initially:
  - Determine your asset class. Choose one asset class and one market within it.
  - Outline when you want to buy. Define your setup in as much detail as it needs to be.
  - Outline when you want to sell.
  - Build many study journal cases. Find tons of examples of when the setup worked and when it didn’t, and study them.
Michael’s book recommendations:
- How I Made One Million Dollars … Last Year … Trading Commodities (Larry Williams)
- The Mathematics of Money Management: Risk Analysis Techniques for Traders (Ralph Vince)
- The Leverage Space Trading Model: Reconciling Portfolio Management Strategies and Economic Theory (Ralph Vince)
- The Handbook of Portfolio Mathematics: Formulas for Optimal Allocation & Leverage (Ralph Vince)
- Portfolio Management Formulas: Mathematical Trading Methods for the Futures, Options, and Stock Markets (Ralph Vince)
- The New Money Management: A Framework for Asset Allocation (Ralph Vince)
- Risk-Opportunity Analysis (Ralph Vince)
- The Trading Game: Playing by the Numbers to Make Millions (Ryan Jones)
- Trading for a Living: Psychology, Trading Tactics, Money Management (Alexander Elder)
- The New Trading for a Living: Psychology, Discipline, Trading Tools and Systems, Risk Control, Trade Management (Alexander Elder)
- Market Wizards: Interviews with Top Traders (Jack D. Schwager)
- Street Smarts: High Probability Short-Term Trading Strategies (Linda Bradford Raschke, Laurence A. Connors)