Net Profit = Profits – Losses

Sounds obvious, right?

Yet most traders are imbalanced with their approach to taking good trades vs. ignoring bad trades.

Truth Bomb #1

Your ability to discard low quality set ups affects your NET PROFIT just as much as your ability to identify and trade high-quality setups – if not MORE. When you bank profit on a high quality 1:1 Power Move, you bank 1% on equity minus transaction costs. When you discard a low-quality entry that would have lost, your net profits receive the FULL impact of a +1% relative outcome. Make sense?

Truth Bomb #2

This means we actually don’t trade all that much!

During a full 21.7 trading day month, personally, I don’t actually enter any trades on the vast majority of those 21.7 days.

Today for example, I’m in Bali, and my full trading routine for the day took about 9 minutes.

• 5 seconds per pair on 25 pairs (2 minutes total)
• 3 minutes total on 3 pairs that I investigated further
• 4 minutes waiting for the slow WiFi to load each of the 28 pairs

Summary: No trades taken, more beers ordered.

Here are 4 methods I’ve developed over the years that allow me to be so efficient in my routine:

1. Thorough weekly review + market forecast, every Sunday. Draw and adjust all key lines and trend lines on all 28 major pairs (this usually takes longer than 9 minutes, but is only done weekly). Having these lines in place allows you to anticipate setups before they even become setups. Preparation is the mother of success.

2. Develop your own trading style. Become crystal clear about what strategies you’re trading, and how you’re trading them. My particular style, the Lewis Mocker Method, is a derivative of IP Strategy #4 (Power Moves). Trading this method allows me to have an ultra clear picture in my mind about what I’m looking for in my setups. This takes time and experience. It is wise to sample a number of styles, before sticking with the one that resonates with your investment personality best.

3. Less is more! Always default to NOT trading, and then stack layer upon layer of confluence to justify your entry. This is the opposite of what most beginners do, where they endeavor to take x entries per day or per week, and their chart analysis consists of sifting through pairs figuring out which one “looks the best”.

4. Use fast-trading wisely. While it’s never a good idea to rush… an experienced trader can use fast-chart analysis to his or her advantage by quickly looking through their watch list and discarding a pair immediately after it invalidates their trading style based on key technical catalysts. By glancing at the Daily and 60 Minute chart, I can usually tell within 5 seconds if I’ll be discarding that pair for the day. Most pairs are discarded, a few then move to the next stage of my analysis, many of which are discarded at that stage.

A novice, on the other hand, has mentally committed to taking “x number of trades” that session, and in doing so can develop the habit of staring at a pair, squinting his eyes, tilting his head, and FINDING an entry that simply is not there. If you want to take a trade on any pair, you will find some kind of technical pattern that supports that desire if you look hard enough. Looking too hard can be

Looking too hard can be counterproductive. As I tell my students, the best

As I tell my students, the best setups will punch you in the face when you see them.