Trading isn't hard. It's misunderstood.

Summary

In this insightful and engaging video, seasoned trader Tom shares his wisdom on how to simplify and succeed in trading. Most traders tend to overcomplicate processes without having a clear plan, leading to ongoing failure. The key to becoming profitable lies in understanding basic risk management, developing a personal trading edge, and constantly learning from one’s trades through effective journaling. Tom shares his journey to illustrate how focusing on clarity, consistency, and a scientific approach to trading can propel beginner traders to profitability, while highlighting the misconceptions about trading psychology and the importance of having a robust, well-defined trading plan.

Highlights

• Trading isn't complicated if you simplify your approach! 🤓
• Focus on avoiding big losses through risk management 📉
• Build an 'edge' with a clear, data-backed plan 🧮
• Consistency beats shortcuts in the long run 📅
• A tested trading plan enhances trading psychology 🧠

Key Takeaways

• Having a clear trading plan is essential for success 📋
• Focus on learning and consistency, not just winning 🧠
• Risk management is key to avoiding big losses 💪
• Utilize trading journals to track and improve your performance 📈
• Trading psychology improves when you have a clear system 🧘‍♂️

Overview

In the ever-chaotic world of trading, Tomtrades comes in with a much-needed reality check: Trading isn’t as hard as it seems; people just tend to overcomplicate it! In a world full of trading gurus and endless strategies, the real secret lies in simplicity and having a solid plan. Tom shares his personal journey from mistakes to mastery and emphasizes the importance of a structured, data-driven approach to trading.

A key takeaway from Tom’s experience is the power of journaling trades and analyzing data to refine your trading edge. This practice allows traders to answer crucial questions and make informed decisions. By keeping a detailed trading journal, traders can unlock insights such as the best times to trade or the most successful trade types, thereby enhancing their profitability. The focus should always be on learning and improving each day.

Tom also addresses the often misunderstood concept of trading psychology. He explains that most psychological issues in trading stem from a lack of clarity and defined process rather than emotional or mental limitations. With a clearly defined trading plan and continuous learning approach, traders can improve their psychology, execute better trades, and increase their confidence in the process.

Chapters

• 00:00 - 00:30: Introduction: Trading and Misconceptions The introduction addresses the notion that trading itself isn't problematic but rather the lack of a clear plan or system is. Many traders overcomplicate the process and fail to be profitable because they don't have a structured approach. The author suggests that success in trading is simpler than it appears, highlighting that many traders seem to expect to stumble upon profitability without a clear direction. The chapter emphasizes the importance of having a specific plan to achieve trading goals and promises to share the author's successful trading strategy. The author mentions their extensive experience in trading, including being funded with significant trades since 2020.
• 00:30 - 01:00: Understanding Trading Failures The chapter emphasizes the importance of understanding and avoiding trading failures. It outlines that there are two main ways traders fail: by losing too much in a single trade or by losing frequently. To prevent these failures, it suggests using simple risk management strategies. Key strategies include risking only 1% per trade, always using a stop-loss, and limiting oneself to a maximum of two to three trades per day. These measures are presented as straightforward ways to protect one's account from significant losses.
• 01:00 - 01:30: What is an Edge in Trading? This chapter discusses the concept of an 'edge' in trading. An edge is defined as a set of factors or techniques that provide a trader with a statistical advantage in the market, leading to consistent profits. The chapter emphasizes the importance of having an edge to avoid frequent losses as demonstrated by the trader's experience of losing $1,500 due to lack of an edge.
• 01:30 - 02:00: Steps to Develop a Trading Edge The chapter 'Steps to Develop a Trading Edge' discusses the concept of a trading edge as being key to profitability in trading. It emphasizes that successful trading hinges on understanding basic probabilities and having the odds slightly in one's favor. The chapter equates developing a trading edge to a series of straightforward steps, akin to the perceived difficulty of running a marathon, suggesting that hard tasks can be broken down into manageable parts. It aims to demystify the process of creating or enhancing a trading 'Edge', 'strategy', or 'system', treating these terms as interchangeable in the context of improving trading performance.
• 02:00 - 02:30: Breaking Down Trading Elements The chapter titled 'Breaking Down Trading Elements,' discusses the various initial steps required in trading, particularly using technical analysis as an edge. It encourages traders to begin by answering simple questions about their trading strategy. These include decisions about when to trade, which market or pairs to trade, the number of pairs, the approach in terms of being discretionary or mechanical, the style of trading concerning duration like minutes, hours, days, or weeks, and the time frames they wish to focus on. Breaking down these elements helps clarify the trading strategy.
• 02:30 - 03:30: Trading as an Experiment In this chapter titled 'Trading as an Experiment', the focus is on breaking down trading strategies into specific components to improve effectiveness and achieve rapid growth. The key elements discussed are defining strategy, identifying areas of interest, and how to manage stop loss and take profit. By concentrating on each element individually and sequentially, traders can experience significant improvement in months rather than years. Solving everything at once can lead to ineffective results, so treating each aspect as a variable or confluence in trading is emphasized. This methodical approach is touted as a way to become a profitable trader quickly.
• 03:30 - 07:00: Importance of a Trading Journal The chapter 'Importance of a Trading Journal' emphasizes the need for taking note of various trading variables and confidences to enhance positive expectancy in trading. It stresses the importance of choosing specific times, currency pairs, and strategies to increase the likeliness of winning more frequently or achieving larger wins over time. This approach is akin to a scientific process, involving planning, hypothesis formation, and the development of a strategy to guide trading decisions.
• 07:00 - 10:00: Profitability and Learning Focus In this chapter titled 'Profitability and Learning Focus', the speaker discusses the importance of treating trading like a science experiment by breaking down various variables and strategies. They emphasize the need for evaluating each variable's impact on trading outcomes to cultivate a positive expectancy, similar to forming hypotheses in science. The chapter highlights the importance of experimenting with different trading conditions, understanding personal trading preferences, and critically assessing questions such as confidence levels across different markets and effectiveness in continuation versus reversal trading. Ultimately, the aim is to systematically identify what strategies work best for the trader.
• 10:00 - 14:30: Trading Psychology and System The chapter 'Trading Psychology and System' emphasizes the importance of using a trading journal to improve trading decisions. By documenting trades meticulously, including entry models, risk management strategies, and outcomes, traders can gather valuable data over time. The chapter illustrates the speaker's commitment by showcasing a personal trading journal with over 300 trades logged over four to five years, achieving a 58% win rate. This data-driven approach simplifies decision-making on what to trade, when, and with which strategy.
• 14:30 - 16:00: Steps to Become a Profitable Trader The chapter discusses how to determine the best time to trade by analyzing trading sessions specific to the market, such as the Asia session for trading gold. It explains how tracking win percentages at different times, like before the Asia open or during its first hour, can help traders make informed decisions on when not to trade.
• 16:00 - 16:30: Conclusion: Behavioral Changes in Trading The chapter discusses strategies for improving win rates in trading by analyzing high-quality data. It highlights the importance of focusing on specific time frames, such as the second and third hours of the Asian trading session. The chapter underscores the value of live results for making informed trading decisions. Additionally, the narrator mentions using correlations, specifically between gold trades and DXY movements, to inform their trading strategy.

Trading isn't hard. It's misunderstood. Transcription

• 00:00 - 00:30 trading isn't the problem you are the problem people like to over complicate trading but becoming profitable is incredibly simple most people just act like they're randomly stumble into profitability they don't have a clear plan or a clear system in place to reach their goals most spend years of their life going in circles learning more but not necessarily improving why is that it's simply because you don't have a plan you don't know exactly what you need to do to be able to make money trading that's okay I'll give you mine I've been trading for over 5 years since 2020 I've been funded multi fig hit 50k
• 00:30 - 01:00 months and flip small accounts into large accounts But first you need to understand the simple way to win is to avoid failing and there's only two ways to fail in trading you either lose too big or you lose too often and losing too big can be easily fixed just through simple risk management if you just risk 1% per trade always use a stop loss and have Max two to three trades per day it's easy like how are you supposed to lose all your account if you have a stop loss in place and you keep the risk percentage fixed well it's got some
• 01:00 - 01:30 support right here so you know maybe it'll hang on to this 16 area bounce back up come on oh oh dude what the I just lost 1,500 bucks what the oh but that still leaves the number one way to fail which is losing too often and how do we fix that well you simply need to just have an edge but what is an edge well an edge in trading is simply a set of factors that gives trading a statistical advantage a consistent advantage over
• 01:30 - 02:00 others in the market basically you just expect to make more money over time than you lose trading is all about understanding basic probabilities you just want to have the odds a little bit in your favor and that's how you make money but how do we actually create an edge or improve our existing Edge and I'm going to be using the same sort of words Edge strategy system plan it's all kind of the same doesn't really matter but isn't finding an edge and trading really difficult well not really hard things are just a series of easy steps a pretty good example would be a marathon being perceived as hard but how
• 02:00 - 02:30 hard is it really to place one foot after the other okay but what steps do I even take in trading well first you need to break it down into simple questions let's say you're using technical analysis for your edge here you're just trying to answer each simple question like when do I want to trade what pair or Market do I want to trade How many pairs do I want to trade what approach do I want to use do I want to be more discretionary more mechanical what style do you want to trade minutes hours days or weeks what time frames do I want to
• 02:30 - 03:00 use what strategy how am I going to Define Direction area of Interest which is where I want to enter or when I want to enter how am I going to place my stop loss and take profit you break it down focus on one thing at a time answer each question one by one and this is how you have insane Improvement insane growth you can become profitable in months not years just by doing this step by step if you try to solve everything at the same time you end up doing nothing so each of these little questions think of it as a variable in your trading or Confluence
• 03:00 - 03:30 all these variables will affect the outcome of each individual trade and you're simply just wanting to take variables or confidences that give you a positive expectancy so you just want to take trades maybe at a certain time on a certain pair using a certain approach that will lead you to winning more often over the long term then you lose or winning a bit more bit bigger that sort of thing so trading is kind of like science you have a plan your hypothesis your system your strategy that if I take a trade with this and this Confluence
• 03:30 - 04:00 this little variable I'm trading it this time on this pair using this strategy I've broken it down so I know how each little variable affects it I can expect a positive expectancy based of these variables just as like in science with the science experiments your trading should also be like an experiment you're trying out new stuff new conferences seeing what works I'm going to trade it this time how does that affect my trading am I more confident in Asia or New York am I better at taking continuations or reversals you're just trying to break it down and answer simple questions but how do you find what Works how do you answer these small
• 04:00 - 04:30 little questions of what to trade when to trade what strategy to use well that becomes really easy when you just have good data and good data comes from a journal so this is my current trading journal you can see my process my entry models time risk management stop loss takeprofit pairs I've broken each step of the trading process into simple defined variables I have over 300 trades journaled over the past four 5 years and over those 300 trades I have a 58% win rate using using all this data I'm able
• 04:30 - 05:00 to answer every single question I have about my trading but if I wanted to answer a simple question of when is the best time for me to trade I can go to my session time and I trade Asia session um and I can see okay if I trade gold just before Asia open what is my win range it's 57% pretty good what if I trade at the first hour of Asia 33% okay wow um I should not be trading the Asia open on gold I've answered that simple question of what not to do okay
• 05:00 - 05:30 but still that narrows it down a bit but how do I find actually when I do that I can simply move on to the second hour third hour this is the time I'm currently trading and I have a 75% win rate trading gold at the second and the third hour of Asia so answer that simple question because I have high quality good data that comes from live results then I can answer every question I want I can go to conferences let's say I'm taking a gold trade with dxy uh correlation I'm trying to take a Buy on gold when dxy is moving bearish cuz they
• 05:30 - 06:00 are negatively correlated I can just put that under the filter and there we go increases the win rate to 78% uh what type of Entry model should I use when should I enter well for a one minute type three a market structure shift I can put that in and again increases the win rate 85% win win rate just by adding in these little things I've answered the questions of What entries should I use what confidence should I use when should I trade so if you truly want to become profitable you
• 06:00 - 06:30 need to have a clear defined trading plan and a high quality trading journal to track every single confidence or reason for you to take your trade so you know exactly how each little variable affects your trading and if you want this template there's a link down in the description below where you can get it for free and you can fill it out and start doing it and start collecting your own data to answer your own little questions you can go down into this trading journal and break it down into all these different conferences and you take screenshots rev you Analyze That how was it a good trade was it a bad trade how could I have improved this trade would I have taken this trade again um based off what I'm looking at
• 06:30 - 07:00 and you can train your subjective knowledge on what or how does it feel to take a good trade what does a good trade look like and you're looking to P subjective information with objective data look at your trades your inputs see how it's processed by the markets results and outputs if I take 100 trades based of this this and this what's the outcome going going to be am I going to win or lose what are the commonalities between the wins similarities between the losses it gives me feedback to then improve refine my Trading plan and
• 07:00 - 07:30 iterate journaling is just about Gathering data so you can review Analyze That to see if the hypothesis is valid your hypothesis is your trading plan to see if it's actually valid and results in a positive expectancy so simply good trading is just about doing more of what works basic patent recognition and you just do less of what doesn't avoid the bad stuff do the good stuff it's pretty simple pretty easy if you break it down so do you just profit now well yes but it takes time and you need to be patient being profitable isn't a point in time you don't just become profitable being profitable is a state of being you can
• 07:30 - 08:00 only be profitable you can never become it what does that mean each day you get to decide if you're going to be a profitable Trader it's based on the decisions you make if you stick to your plan if you journal every single trade you take you're voting to be profitable and the easiest way to do that to make it inevitable to reach all the success you want is to Simply focus on learning I've spoken to hundreds of different Traders people that become profitable in a year or a couple months versus people that weren't profitable after 6 years and the main difference was their focus
• 08:00 - 08:30 the people that became profitable earlier took the long road which is a bit paradoxical uh but when you focus on learning trying to get a little bit better every single day you make it inevitable when you just get a little bit better each day you focus on the process you focus on learning it's impossible for you not to win over time because you you're just going to keep getting better and it compounds upon itself 1% 1% 1% because it compounds it compounds it's exponential but with the person that just focuses on winning they might have immediate success they'll
• 08:30 - 09:00 take a couple shortcuts but they're going to keep on strategy hopping changing their plan going in circles and they're going to plateau and they're going to be overtaken within a month within a year by the person focused on learning when you're focused on winning it might be an if you might sometimes be profitable you might sometimes succeed in trading but if you want to guarantee success you just have to focus on being a little bit better each day and that's actually not that hard but I think we're forgetting something what about trading
• 09:00 - 09:30 psychology because yes you need a strategy a system with a positive expectancy but you also need to be able to execute that system so why I haven't talked about that isn't trading psychology really hard and that's why 90% of people fail well yes trading psychology is really important but it's kind of you need to have a system first trading psychology making mistakes poor Behavior can be defined by this it's knowing what you should be doing but not being able to do it most people don't actually know what the they're doing they don't have a clear
• 09:30 - 10:00 defined trading plan that's written down so they deserve to have poor psychology if you don't have a trading plan a trading journal if you don't journal every single trade you take if you haven't been done every single single step of the process of exactly how you're going to trade through entries management and exits you deserve to have bad psychology and you will never be profitable you need to have a system first you can't will yourself into good psychology you can't force it if you don't know what the you're trying to do how are you supposed to do it how are you to trade in probabilities trade
• 10:00 - 10:30 with an edge if you don't actually understand what what variables result in a positive expectancy if you haven't answered every single question on how you're going to trade and what works how are you supposed to do the right thing so one of the biggest mistakes is that people focus on psychology before they actually have a system in place and that's never going to work I tried doing that for years and I failed for over 2 years trying to go that path if you just have a clear defined trading plan you'll solve pretty much 95% of your issues with psychology if you ever have any psychological issues with fear that can be solved by confidence how do you get
• 10:30 - 11:00 confidence if I have a stack of proof in my journal telling me exactly if I just do this this and this it'll work it's really hard to not be confident it's really hard to be fearful the second big thing that will fix most of if not all of your common trading mistakes is to have Clarity this goes back to answering every single little question most mistakes result from not being clear on your trading process I speak to lots of traders who have issues with trade management either adding too much to a trade closing a winning trade early or moving their stop loss and I always ask
• 11:00 - 11:30 them do you have a clear written down trading plan exactly what steps you going to take when you're managing a trade when I enter my Stop's going to be here I'm only going to troll my stop loss if it breaks a higher or low I'm only going to add if I see this and this if you don't have a simple step-by-step management plan you're bound to have you deserve to have psychological issues around managing your trades you're going to make mistakes CU you're not clear on exactly what you're trying to do so you're going to be inconsistent you don't know what the you're doing and then by just shifting what you focus on this will solve the remaining issues you have in Psychology so if you just focus on yeah learning that process
• 11:30 - 12:00 getting a little bit better focusing on answering each of those little questions with a clear defined trading plan a system in place and not focus on winning because it doesn't matter does one winning trade matter if you're going to take a thousand trades over your trading career no so if you want to become or be a profitable Trader you have to act like a profitable Trader make it unreasonable to not get what you want you have to change your focus from being output based you might you might have flawed beliefs around believing profitable Trader wins all the time or has to to win uh you need to win you take an
• 12:00 - 12:30 action you deviate from your plan and that results in you becoming an unprofitable Trader you have input based focuses you control their controllables you let go of everything else a profit Trader sticks to the plan input based Focus you have a thought I need to follow my plan action you stick to your plan regardless of what happens win or lose you're happy if you just stick to your plan you focus on learning becom a little bit better you learn from A Loss you be happy with when you win happy
• 12:30 - 13:00 when you lose because you're learning you're always moving forward so the long-term result if you're just focus on the input focus on being a profitable Trader not trying to become or win or reach that output based of your new identity you just have profitable trades you win more often than you lose you'll stick to your Edge and you'll get so good that it's inevitable that you'd be profitable so in summary to win you just need to avoid big losses to do that just have simple risk management if you want to avoid too many losses you have a clear Edge backed by data using a trading plan a trading journal and for psychology 95% of the issues pretty much
• 13:00 - 13:30 every single issue is fixed by just doing the work journaling trades are boring having a clear defined trading plan is a bit uncomfortable bit tedious bit boring as well but if you truly want to actually succeed in 2025 you have to do these things I've been training for 5 years I failed for over two because I didn't do these things the only shortcut in trading is to learn from someone else's mistakes you either learn now and learning can be defined as changing your behavior you e either change your behavior now and focus on this or you
• 13:30 - 14:00 waste another couple years and then eventually you get to the point where you have no other option but to do this because it's so painful you just keep on losing so just why not do it now so here are some actual steps write down a simple trading plan of how you want to trade doesn't have to be the most perfect optimal plan you're going to trade something that you like trading better than what's perfect make it as simple and easy to execute as possible CU I just have a three-step plan after 5 years of trading that's pretty simple next step is just going to journal 100 trades in accordance with that plan
• 14:00 - 14:30 you're going to track every reason for you taking a trade every Confluence every variable in as much detail as possible this is tedious this is boring this is kind of the the hard part of trading how hard is it though to journal one trade not that hard the hard part is just doing it consistently you're then going to want to review that that information you'll find out what works what doesn't what time to trade what pair to trade and then you just do more of what does less of what doesn't you improve your plan you iterate you change
• 14:30 - 15:00 things and then you rinse and repeat that do that again and again and again and then you get closer and closer and closer to that profitability threshold and this is the exact process I used so yeah I hope this helps becoming profitable in this year and remember remember nothing changes if nothing changes learning only happens when there's a change in Behavior if you watch this video and don't change your behavior the next day you just do the exact same thing you're not learning this is just entertainment and you're just wasting your time write down a simple plan on exactly how you're going
• 15:00 - 15:30 to put this into effect this year and to help you with that there's a notion template with the plan with the journal that you can use fill out to help to make it as easy as possible for you just start and if you have any more questions just hop into the Discord as well Link in the description and you can ask me questions whatever and you can share your Journal get feedback on your process and we can all improve together