Trade Emotion
An article explaining the blueprint of a low risk, extremely high-reward strategy.
Mindset
As you delve into this article, it's crucial to set aside preconceived notions. Take a moment to reflect: Did past strategies truly succeed? Were profits realized? Clear your mind, shed any lingering ego, and relinquish all expectations. Welcome the forthcoming information with a blank slate, as if embarking on your first trade.
About
For some time, I've been closely observing other traders, paying particular attention not only to their performance but also to their psychological reactions to market conditions. What I've noticed is striking: around 90% of the traders and aspiring traders I've observed exhibit nearly identical reactions to both bullish and bearish market conditions. Interestingly, the most intriguing aspect is that when market trends are clearly defined and visible, they all seem to generate profits..
But..
The introduction contains a significant 'but.' Only roughly 10% manage to retain their gains, while the ironic aspect is that they repeatedly cause themselves to lose everything.
When you're winning, you tend to take bigger risks, which can lead to faster losses. And when you're losing, you often take even bigger risks to try to make up for your losses. - Observation by End Man
Adapt
Recognizing that the majority of (aspiring) traders using PinoAPI initially achieve profitability regardless of their initial risk-taking, I devised a method to limit downside while maintaining unlimited upside potential. All we need to do is adapt, embrace the new process, adhere to the rules consistently, and hope for a stroke of luck..
Lucky?
To become a successful trader, you must come to terms with the reality that every trade yields an unknown outcome. You can never be certain if a trade will succeed, or if unforeseen events, such as a conflict erupting anywhere in the world, will instantly invalidate your analysis or plan. Essentially, trading is akin to rolling the dice—you're constantly hoping for luck with every single trade.
Requirements:
For this strategy, we can employ any algorithm, use any risk preset, and select any desired instrument with any weight allocation. You have the flexibility to analyze charts across all timeframes and trade either long or short bias. The primary focus is on winning; as you succeed, the strategy involves increasing risk and betting more!
You have the freedom to do whatever you want, and once you win (as usual) you should take more risk. This time, however, it means betting big—putting everything on the line: BET MORE!
Risk:
If you aim to make a substantial profit with unlimited potential upside, your predetermined risk must scale according to your performance. To begin, starting from the absolute bottom, we risk $500 on a single API. This way, if you are not lucky, this approach ensures that losses are limited to $500 through liquidation.
Here's an example on how this strategy works: • You have $5,000 and want to grow this to a substantial amount in a short period. • You run one API with $500, meaning you could liquidate your API 10 times to lose your initial investment. • You will run a maximum of one API at a time, ensuring that you never risk more than $500. The USD risk amount will later on scale with your future performance. • Your goal is to double your balance as quickly as possible. This means you enter a setup, and once your idea proves itself profitable, you will take on more risk—significant risk, even. • Once you've doubled your account, you take back your initial investment ($500). This way, if you liquidate your account, you'll only end up losing the $500 you gained before. • You will have to complete this process two times, so your total gains will now be $1,000. • Your new predetermined risk will now increase to $1,000. Therefore, the one API you currently use for trading can only liquidate up to $1,000. If this occurs, you will need to restart with $500 again. • You could repeat the above process over and over again, and if the market continues to favor your approach, you could generate extremely high returns in a short period. • If you lose, you only lose the predetermined risk amount. Perhaps your bias was wrong or your idea was quickly invalidated. Either way, it's always wise to adapt if the market proves you wrong. For instance, if you start shorting during a Bull run and lose one API, after adjusting, you could potentially make ten times the initial loss you took. • You can trade in any manner you choose, as long as you consistently protect your capital by adhering to the money management rules provided above
The most crucial aspect of this strategy is the ability to quickly compound your wins if the market is in your favor and respects your ideas. Once the market proves itself, you extract all it has to offer. If you are wrong, you limit your losses to a predetermined risk.
When does this work?
This strategy could be extremely powerful in trending markets, allowing you to generate massive returns in a short amount of time as long as the trend remains consistent. However, range-bound markets could pose greater challenges, as there is typically a smaller timeframe to operate within. Therefore, you must either adjust bias more quickly or risk losing one API.
100%
In this strategy, achieving the first 100% gain is crucial. Once you have doubled your initial account, you can then only risk the profits you have made previously, eliminating any potential risk to your initial capital. The more consecutive doubles you achieve, the faster you can compound your total net worth.
Mars Attack is one of PinoAPI's high-risk algorithms, capable of generating incredibly high percentage returns in a short period.
Conclusion
Unless you are among the 10% capable of controlling your emotions at all times, resisting the urge to risk more to extract greater profits from the markets and not giving back, this strategy should be applicable to the majority of aspiring traders who struggle to maintain their gains. With the rules outlined above, I am confident that even you could become extremely profitable in a short period. Respect the rules, and trade the process.
What are you waiting for?
Special thanks to Jeffrey and Johan for being my inspiration for this article. You have both provided me with insights that have built the foundation for this strategy.
Last updated
