Picture yourself at a tennis match.
You're watching an intense 'rally' as opponents dance with each other from opposite baselines—exchanging shots across the court.
With each return, anticipation mounts—who'll deliver the knockout blow?
Jump the gun and you risk losing the point. Instead the strategic way is to let mounting evidence show you the perfect moment. Then without hesitation execute an attacking knockout play. Correct?
Can you see and hear why tennis is a great analogy to trading?
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You have an opponent.
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You press when you can catch your opponent off guard.
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Go too soon or too late and you lose.
But first an important footnote:
Are you aware it's vital to vary trade size to win at trading? From Warren Buffet and George Soros to unknown market wizards, you only succeed at trading by varying trade size—including "pressing your bet" (increase size)—at precisely the right time.
Are you aware it's vital to vary trade size to win at trading? From Warren Buffet and George Soros to unknown market wizards, you only succeed at trading by varying trade size—including "pressing your bet" (increase size)—at precisely the right time.
How the knockout blow in tennis also applies to your trading
Trade write-up
Notice how the trading below dances with the market?
The blue arrows are buys and the pink arrows are sells. There is a mix of long and short trades.
And if you think the trading above resembles treading water — you're right!
But consider this:
When it comes to swimming what's the most critical skill? Not drowning. Correct?
Therefore the initial focus in trading—like in swimming—is on mastering treading water. Make sense?
Now ask yourself:
If it was you who made all of those trades shown above including:
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Trades that go your way but turn around on you.
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Trades that lose.
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Trades that look promising only to end in a small draw.
After grinding away without tangible results—how confident are you in increasing your trade size and going for the knockout blow on the very next trade? Not—Very—Confident. Right? But can you change? Tell you in a minute.
Below you can see all the same trades with one exception—a single additional trade labelled 'Press' indicating an increase in trade size.
Where you change gears and put on (in this case three times) more size than the previous trades. Make sense?
Confidence evidence or a combination of both
Like the tennis player—the knockout play is built on evidence.
The final trade shown above combined nine points of evidence which scream "Go for the knockout blow."
Imagine you'd made that exact trade—based on nine points of evidence—between thirty and fifty times previously. What do you have in addition to evidence?
You also have self-confidence.
After so many repetitions—it's hardwired into your DNA to "Go for the knockout blow" each time those nine points of evidence show up. Right?
Why?
The secret to confidence is nothing more than repetition—experiencing the process and outcome until they become ingrained in you.
But what else?
Confidence isn't solely about entering with size. Right?
It empowers you to continue holding—and holding—and holding...
Until you extract maximum payout as per your game plan and playbook—as shown by Friday's short trade below.
But if you're like most people trading, you've experienced numerous challenges that erode your confidence over time. Agree?
Can you see why it's important to allow for ample time for confidence to deeply root into your DNA —enabling you to execute knockout trades instinctively and without hesitation?
Trading skills aren't just about knowledge. Correct? To be effective you must build intrinsic confidence through real-world application.
Forex and derivatives trading is a highly competitive and often extremely fast-paced environment. It only rewards individuals who attain the required level of skill and expertise to compete. Past performance is not indicative of future results. There is a substantial risk of loss to unskilled and inexperienced players. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent
Editors’ Picks
EUR/USD clings to small gains near 1.1750
Following a short-lasting correction in the early European session, EUR/USD regains its traction and clings to moderate gains at around 1.1750 on Monday. Nevertheless, the pair's volatility remains low, with investors awaiting this weeks key data releases from the US and the ECB policy announcements.
GBP/USD edges higher toward 1.3400 ahead of US data and BoE
GBP/USD reverses its direction and advances toward 1.3400 following a drop to the 1.3350 area earlier in the day. The US Dollar struggles to gather recovery momentum as markets await Tuesday's Nonfarm Payrolls data, while the Pound Sterling holds steady ahead of the BoE policy announcements later in the week.
Japanese Yen adds to strong gains and drags USD/JPY to 155.00 amid hawkish BoJ bets
The Japanese Yen extends its steady intraday ascent through the Asian session on Monday, dragging the USD/JPY pair to the 155.00 psychological mark in the last hour. Against the backdrop of the recent shift in rhetoric from Bank of Japan Governor Kazuo Ueda, an improvement in business confidence reaffirms market bets for an imminent rate hike this week.
Editors’ Picks
EUR/USD clings to small gains near 1.1750
Following a short-lasting correction in the early European session, EUR/USD regains its traction and clings to moderate gains at around 1.1750 on Monday. Nevertheless, the pair's volatility remains low, with investors awaiting this weeks key data releases from the US and the ECB policy announcements.
GBP/USD edges higher toward 1.3400 ahead of US data and BoE
GBP/USD reverses its direction and advances toward 1.3400 following a drop to the 1.3350 area earlier in the day. The US Dollar struggles to gather recovery momentum as markets await Tuesday's Nonfarm Payrolls data, while the Pound Sterling holds steady ahead of the BoE policy announcements later in the week.
Gold stuck around $4,300 as markets turn cautious
Gold loses its bullish momentum and retreats below $4,350 after testing this level earlier on Monday. XAU/USD, however, stays in positive territory as the US Dollar remains on the back foot on growing expectations for a dovish Fed policy outlook next year.
Solana consolidates as spot ETF inflows near $1 billion signal institutional dip-buying
Solana price hovers above $131 at the time of writing on Monday, nearing the upper boundary of a falling wedge pattern, awaiting a decisive breakout. On the institutional side, demand for spot Solana Exchange-Traded Funds remained firm, pushing total assets under management to nearly $1 billion since launch.
Big week ends with big doubts
The S&P 500 continued to push higher yesterday as the US 2-year yield wavered around the 3.50% mark following a Federal Reserve (Fed) rate cut earlier this week that was ultimately perceived as not that hawkish after all. The cut is especially boosting the non-tech pockets of the market.
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