A Pro Trader’s Survival Guide – 6 Rules to Live By
Brought to You By Scott Redler's Power Plays – Get My #1 Idea Every Week.
Trade the Market in Front of You, Not the One You Want
The #1 reason traders blow up is that they fight the trend. They see Nvidia (NVDA) rally and ask, “How could this blow up right now?” Instead, ask, “is there an entry here?” If you always assume doom is coming, you always miss the upside. Or you blow up by shorting too early. Trade the market in front of you, not the one you want. Over time, the bull market wins, so you need to ride the up moves. Saying “this won’t end well” over and over again is not a trading strategy! Stop trying to predict the end of the world. Instead, look for smart entries. Use stops to keep you safe. That’s what really matters.
Work Hard, Work Smart
There are about 250 trading days a year. One hour a day is 250 hours. Two hours a day is 500 hours. The more work you put in, the faster you develop an inner voice that keeps you on the right path. But if you’ve been going for 10+ years without making money, you must pivot. Take a deep dive into your P&L so the numbers tell you what you’re good at. This is not a fun exercise, so be ready for a rude awakening.
Develop a Process and Routine
I could talk to you all day about Red Dog Reversals, relative strength, trend lines, and moving averages. These concepts all help me find profitable trades. But the #1 reason I’ve survived is that I put them all together as part of a process and routine I enjoy. If you don’t enjoy your routine, you’ll never do it. I’m up at 4:45 am ET, then it’s 30 minutes in the sauna, 5 minutes in the ice barrel, followed by the #630club. From there, I put on music (not TV) while I mark up 40-50 charts. This process gets me ready to take action when setups trigger.
Treat Every Day Like a New Day
We’ve all heard the saying, “don’t trade your P&L.” Treat every day as a new start and every setup as a fresh opportunity. If you lose $5,000 on Monday, don’t try to make it all back on Tuesday. You’ll trade out of desperation instead of looking for the right trade at the right time. Emotional traders don’t last. Follow your process so you can make smart decisions at the time of execution. On the flip side, if you win big, don’t let your process break down. Stick to your routine and hunt for the next good setup.
Don’t Live Your P&L
2020 was my best year ever. But I did not make any big lifestyle upgrades. Why? Trading is cyclical, and we all have losing months or quarters. You don’t want to double your monthly expenses right before a rough patch. You can’t trade with a clear head when you need $15,000 by Friday to pay the mortgage on a house you regret buying. Treat yourself every so often, but don’t turn windfall profits into permanent financial obligations. You’re better off paying down debt than picking up a new Ferrari.
Don’t Go It Alone
One reason I love social media is the sense of community I get. Every day I interact with like-minded traders who work hard, play hard, and live healthy. There is real strength in numbers. Five hundred eyeballs are better than two. We all have weaknesses that a community can help us overcome. The market feels cruel at times, so don’t go it alone. Lean on your friends, and let them lean on you.
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*Scott Redler Positions Disclosure as of 2024-10-01 at 2.29.31 PM
