How My Trading Rules Stopped an 8% Loss

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1:02The American Giant Classic Fulzeh hoodie is made to last a lifetime. So you can count on it year after year. Every American Giant piece is made in America and designed to last. No exceptions. The result is durable clothing that become part of your life. Snag the hoodie that will bring you comfort for life. The American Giant Classic Fulzeh. Save 20% off your first order at american-giant.com when you use code staple20 at checkout. Hi guys, and welcome to Road to Forex. Will we discuss everything in relation to the foreign exchange? Of course, I am your host Alex without further ado. Let's get stuck into today's episode. Hey guys, and welcome back. So today, my rules saved me 8%. How crazy is that? My rules saved me 8%. So what are your rules doing? And why are they so important? When do you need to change them?

2:02We're just going to be talking about rules in general. Because that 8% is huge. They were all valid traits, right? According to my entry rules. But when you make a strategy or when you go in and you backtest, what do you need to do? You need to go, oh okay, cool. So my base strategy has these entry rules. I know I can make a 45% win rate off of them. Or whatever it is, right? Then you go and you test it. And you go, but can I make that better? What does my journal say when I'm entering trade, blah, blah, blah, blah, blah. That sort of stuff. And you put these rules in place to increase that win rate or to increase your risk to a reward or whatever. And that's the position that I'm in now. And it's so fulfilling and rewarding when you look at a particular situation and you go, when I first started trading, I might have taken 8% worth of losses.

3:05Now, nothing's happened. And this also falls into making sure that you trade your rules perfectly every single time. Because if I made a mistake there, again, you guys know this is a flow on effect. I take one of those trades that I should know. I dual trade, so I lose 2% on that. That's an extra 2% on my strategy. We know we have X amount of trades in the year. We know we have this many winners and this many losers. I've just increased my losers. Just increase them. So I'm therefore decreased my win rate. Right? Technically, my win rate. Because I've added an extra loser onto them. And that's where people can make mistakes. Because they start pushing for maybe a little bit more when they're trying to go for their winners. And maybe they give up a little bit more. They risk more or it's just not a good scenario or maybe they then hop into another trade that they shouldn't be doing just because they've added this extra winner.

4:14So when you go into there, you've got to understand through your data and through your back testing that these rules are there and they're to be put in place to save you. Essentially, that's what they're there to be to do. Right? And that's the today, for example, missing out on 8% worth of losers. Huge, massive. Does that not then put you instead to go, hey, the rules work. This is fantastic. What you do on a day like today is you write it down. For example, fourth of the third, 2026. I saved 8% with my rules. Stick it there. The next time you look at not following your rules, well, you already have something right there in front of you to basically build that confidence up or to build your mentality to then always follow your rules.

5:22Well, again, talking to another student of mine, Lancelot, he actually kills it in the markets. And he was saying that he entered a trade and he risked too much the other day. Now, instead of going, well, I've risked a little bit more, even though he was in profits. So just going, well, I'm just going to let it ride out. He closed some of the trade partially. I believe that's what he did. Took some partial profits out of there. So that he was now within the rules. It went on to win. The trade went on to win. I believe so from my recollection of it. But he just didn't care. Because he was like, I've been on the other end of when I have done this. And I've just gone, well, I'm just doing it and let's see what happens. And I've now taken on an extra loss that I shouldn't have. But I look at the data and I look at everything that I should be doing. I know if I follow these rules that at the end of the year I'm going to be somewhere around

6:25for my strategy, for example, 40 to 50% returns. And that's crazy. It's just following these. And imagine the people that haven't taken on those rules and I'm not following them. Where are you going to be? And that's what you should be thinking about every single time you deviate from them. Because is this not a fantastic case where you can sit there? And you can go and you can look at it on my YouTube channel. I do these daily breakdowns. So you can see every single day, the trades that I'm missing out on, the trades that I'm taking. And I will be shortening them in the upcoming days as well too. Instead of going through every single trade, I'll just be going on and then just having a look at what we did hop into. And of course, maybe some trades that we didn't do. And why? But just cutting them down to two, three minutes. But anyway, you can see that on my YouTube, Road to Forex. I think the link is in the description to this podcast channel.

7:27As is the free discord as well. I'll be putting up free signals. Three to five, probably every week. Just to get you started and see what can happen. Again, you might be looking at it and going, hmm, what's happening here? Because I know that I need to take every single trade that I can. Yeah, that is still the case. But you can sample it, you can flavor it and see if it's something for you. Right? That's what it's really there to do. I'm not saying from three to five signals a week that you're going to make any money off it. I'll never guarantee that. But can you sample it? Can you flavor it? Can you see? Oh, this might work for me. Yeah, absolutely sure. And I'd love to help you guys out that way. But anyway, back to the point at the crux of the matter. When you build this strategy, when you put in these rules, record as a separate tab in your journal. How much you saved. I do that every single year when I go and I look at all my trades and go,

8:30how much did I save having these rules? Last year, it was over 100%. If you take in every single trade, I mean, it was absolutely insane. You would have made like 110% on your account. But you would have lost like 118%, which doesn't make sense, right? Or 120%. Something around that area. Am I going, I sit down and go, well, I've made 45%. There's all these trades that they didn't take, which would have just, you know, at some point completely belasted my drawdown. Or I would have just kicked the challenges ass, but then lost it the next day. Or made a massive payout and again lost it the next day. That's not all you want. You're looking for consistency in the markets. Again, guys, if you've got a recipe for making bread, when do you ever go in there and go, well, I'm just going to change the amount of salt that I put in. Why would you ever do that? Unless you're an expert bread maker, but then you know you're not making the right thing.

9:31Unless you've done it a hundred times and you've gone, I'm just going to put a little bit more salt in because that's what I like. That's what tastes better for me, right? But that's just back testing. I see the exact same thing. When chefs change their recipes because they've tried it and they've gone, yes, I can replicate this. I know other chefs can replicate this. So I can put it in my restaurant. I can do all this stuff. You follow this process. You get this outcome, right? We do the exact same things. Or you're just chefs. And I say it. Just so you can highlight it and go, everyone that didn't follow my rules today would have lost money. I'm sitting here having not and made 5% yesterday. So I know that someone took a tray that they shouldn't have. So they're on minus 2%. That five then drops to three. They're five drops to three. So I'm 2% up on them there. Right? And every single time they mess up and I don't.

10:34And it's 4%. And it's 6%. And it's 8%. And it is what it is, right? And it keeps on increasing, increasing, and increasing. So that is why I say to you guys, when you're journaling, have a mechanical version of yourself. Have a mechanical version of yourself. Afford yourself that. I think it's like 12 to 15% tax that we've talked about before. That when you know you're going to make 12 to 15% worth of mistakes. Right? You're going to give that up every year. But always see where you are in relation to that mechanical version of yourself. Because then you'll be able to be every single time going, oh my gosh, the rules are always, when you implement them, the things that save you the most. So just keep that in mind as you are moving forwards. Again, guys, if you want more of this, go to my YouTube channel. Go to my Discord as well.

11:34It's free. You can always suggest episodes if you want. And yeah, we can just really go over anything there. And I hope to see you around in the Discord in the near future. All right, guys. You have a good one. Speak to you later. Bye. There's one place for the newest drops in wellness and performance. And the biggest sale of the year. It's the drop by GNC, curating the best of what's new, handpicked by the pros, who know what works. And right now, get it all by one, get 150% off during the semi-annual live-well sale. From crushing workouts to leveling up to nutrition and everything in between, get the best deals on the latest innovations. All the newness is all on sale right now during the live-well sale on the drop by GNC.

12:39Hey, Cass Powers, the world's best podcast. Here's the show that we recommend. Do you like being educated on things that entertain but don't matter? Well, then you need to be listening to the podcast with Nox and Jamie. Every Wednesday, we put together an episode dedicated to the live-well idiocy, to give your brain a break from all the serious and important stuff. Whether we're deep-diving a classic movie, dissecting the true meanings behind the newest slang, or dunking on our own listeners for their bad takes or cringy stories, we always approach our topics with humor and just a little bit of side-eye, and we end every episode with recommendations on all the best new movies, books, TV shows, or music. To find out more, just search up the podcast with Nox and Jamie, wherever you listen to podcasts and prepare to make Wednesday your new favorite day of the week. Hey, Cass helps creators launch, grow, and monetize their podcasts everywhere. acas.com