Breaking the Rules is Not Your fault

Hello, BabyPips’ citizens, happy January 2022.
Something knocks in my brain when I talk to my trading mates, every time I used to hear these: “Ahh! I’m dealing with a psychological breakdown, crap! this is my fault; I shouldn’t have broken my rules, I can’t stick to my rules.” etc. Most trading educators make money from these misinterpretations.
As a trader, we all have gone through with it you know. But what do you think, is that really our fault? Well, I don’t think so, believe me, THAT IS NOT YOUR FAULT. ‘Breaking the Rules is Not Your fault’ is very true particularly for day traders and scalpers. Basically, there’s No RULE in currency trading the only rule of day traders and scalpers is, NOT HAVING ANY RULE. Sounds crazy! right? :wink:
Well, my friends, I know many of you would discord with me and maybe I’m about to get some backlash but that’s my thoughts at this moment. I might be wrong but that’s what I have come to realize that after being involved in the currency market and testing with thousands of robots, strategies for years. However, still struggling! LOL :joy:

Let’s cut to the chase: The forex world is overloaded with the phrase “Stick to your rule or don’t break your rule” but no one shows you how to create a rule. My point of view is, creating a rule and breaking the rule is the only way to develop your trading psychology. The fact is, you don’t break the rule actually the market is the sole culprit breaking your rule, the market makes you bound to break your rule, it’s because the market doesn’t follow any specific rule that’s why IT IS NOT YOUR FAULT. No one could make money just following some blind rules unless they know what the rule is and how it works. If it is, then everyone would have made money with robots: Robots have no emotion, robots can make decisions faster than you, robots can observe the market better than humans, 24/5. and the most significant thing is bots don’t break any rule, yet robots blow account quicker than humans. So WHERE IS THE BENEFIT OF FOLLOWING THE SAME RULE IN EVERY MARKET CONDITION?

What if you follow the same rule every day? Let me demonstrate something. However, this is not rocket science for those who are used to robotic trading or MQL programming.

See the picture below, it made 120% profit in the year 2019 with just 10% drawdown, 10k to 22k, :sunglasses: sound interesting? Well, see the next picture after this one.

The following picture in the year 2020, it lost 100% of the balance 10k: with the same settings, same pair, same time frame, same SL/TP. It traded exactly the same as the previous year 2019 but lost 100% of the money. :weary:
Copy this coe :point_right:
(Copy the code and past it in your browser and hit enter you will see the picture of 2020 I’m a new user that’s why I can’t upload more than one picture in a post.)
Hope you’ve seen the picture of 2020 if not please the first comment. Thanks

So, where’s the benefit of this bull*hit “Stick to Your Rule?” If you would have stuck to the same rule of 2019 in 2020 you would lose all of the money that you made a profit in 2019, you just wasted 730 days, two years :woozy_face:. I’ve seen many strategies that hit the wall after one, two, three, or even four years. This is just one example of many.

Now the bottom line is, you can’t make money following the same rule every day, it’s because the chaotic market creates a different scenario on different days. Your rules should be adoptive according to the various market conditions, though it’s the hardest part of Forex Trading.

Happy Struggling :smirk:

2nd picture of 2020.

If a trader has a consistently profitable strategy, it must be because they follow consistently profitable rules. Good luck does not bring consistent profits.

It follows that a consistently profitable strategy has consistent rules and these must be followed consistently. A strategy without consistent rules is random trading, as is a strategy whose rules are followed randomly.

But I am interested in strategies which work for 3 or 4 years and then fail. What do these look like?

@tommor Welcome to my post, I’ve seen some martingale and grid trading systems that have blown up entire accounts after three years however, the past result was impressive. Also, I’ve seen some swing traders who lost all of the money they made for years.

Here’s an example Click here this account almost wiped out but somehow survived.
Losing accounts statements cannot be found because they delete the portfolios, but I myself witness many of them.

Thanks for the thoughts.

Here is the thing with having a strategy. You can not exactly follow the same rules in every market condition. It depends if you are trading inside a trending market ( preferably one that is expanding away ), a consolidation market or a market that is reversing. What are the higher timeframes telling you? Not just lousy support / resistance. You need to see what drives price moving from and to certain levels.

A solid strategy has clear rules for you to follow and has ‘‘what if’’ scenario’s. If price does … at … level, then I will look for … as the market is … , etc.

So you need stay fixed, yet flexible. If that makes sense :stuck_out_tongue_closed_eyes:

I have multiple setups and one setup has different versions, so I can trade it in different conditions. In some market conditions it is better for me to not do anything. Then I just have to wait.

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Thanks for the link. This shows the outcome of a strategy with a dangerous risk level built in but it doesn’t show what happened or how or why. If such a crippling draw-down comes from following the strategy’s rules, what the heck kind of rules would bring this about?

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Yep, that makes sense :slightly_smiling_face:

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