In my experience, the best and fastest way to make money trading is to take a low-frequency, ‘hands-off’ approach. If you’ve been following me for any length of time you probably already knew this, but in today’s lesson I want to expand on the concept of “trading from anywhere” and why it truly pays to make trading something you are “doing on the side” or “in addition to” other revenue streams, rather than put ALL of your hopes and dreams into it.
In my opinion, the goal of any new trader should be a minimalist trading approach where trades are taken in small quantities but with high conviction. In other words, a sniper trading approach is what I recommend and teach and what I personally practice as well. One of the HUGE advantages of this approach is, as stated above, you can literally do anything else you want while still staying in-touch with the markets and placing trades. You could travel, hold down another job, multiple other side-hustles, anything you want. The goal is to make trading a “complement” to your lifestyle, NOT its primary focus. Doing this, is not only great for your stress levels and overall state of well-being, but it’s also literally the BEST thing you can do for your trading account!
Everything in life needs to be balanced. As they say, anything in moderation is not bad for you, and that includes trading. Most people lose at trading because they simply do not practice moderation. Instead, they stay up all night watching the charts and get hooked to short time frame charts that end up sucking them into the day-trading trap that snares so many well-intentioned beginners.
My hope is, after reading today’s lesson, you will adopt a coffee shop trading attitude and look at yourself as more of a “global nomad trader” / part-time trader who may also have another side business. One thing I know for a fact is that MOST WEALTHY PEOPLE have multiple streams of revenue, they do not put all their eggs into one basket. If you think about it, it seems silly that I would be telling you this; to diversify and not depend solely on trading, but that should tell you something in and of itself. I want YOU to succeed and I know that the only way to succeed at trading, for MOST people anyways, is to follow a similar path to the one I am going to lay out below…
“Nomad Trading”…Too good to be true or the answer you’re looking for?
Trading from anywhere; while you’re traveling, while you’re home, while you’re away on business for work, while you’re at a coffee shop, whatever the case is, it’s NOT too good to be true. In fact, taking this “trade from anywhere” approach is literally about the best thing you can do. Let me explain how it’s done…
- Focus on the right chart time frames
In order to take a “nomad” approach to your trading, you must focus on higher time frame charts. I am talking about the weekly and daily and 4-hour time frames. In my opinion, most other time frames are simply a waste of your time, no pun intended. If you don’t know why yet, please read my article on the power of higher time frame trading.
When you are analyzing and trading on these higher time frames, you can simply check the charts each day or even every other day at the end of the day, I call this end of day trading, and it’s basically where you make your trading decisions based on the daily chart close at the end of the trading day in New York. In other words, you don’t make a decision before the current daily bar is closed out. This allows you to skip all the intraday noise and meaningless price movement, during that time you can focus on other activities, whatever they may be.
- Low-Frequency
Naturally, if you’re focusing on higher time frame charts, you’re going to be trading a lot less than if you were constantly watching intraday charts. This is a good thing and it allows you to take a much more laid-back approach to trading that allows you to actually ENJOY your life and not be tied to your computer around the clock. But, that is not the most important part…
The most important part of this low frequency trading approach is that it’s actually BETTER for your overall trading performance and chances of long-term consistent success than day trading or any other form of shorter-term, higher-frequency trading. Afterall, isn’t the whole point of trading to MAKE MONEY OVERALL AND NOT END UP LOSING IT?
- Let the market do the ‘heavy lifting’
Day traders set in front of their computers for hours. They analyze, think and analyze some more, they are essentially on a never-ending mouse-wheel of information overload and trying to make trading decisions. This is absolutely unnecessary and counter-productive! The real reason so many people end up doing this is not because “day trading is cool”, it’s because they simply became trading addicts. They get addicted to the moving prices, flashing colors and the thrill of entering a new trading. It can truly be an addiction just like a drug or video games. Hence, your mission is to control yourself so that the market doesn’t end up controlling you!
You have to let the market do the ‘work’ so that you don’t waste your time analyzing and thinking. This ‘work’ only causes your cortisol (stress) levels to rise which puts you in an even more dangerous trading mindset; one that is not conducive to skilled, patient trading, but to frantic, random and illogical trading. The primary ways we let the market do the “heavy lifting” is to set and forget your trades. Don’t check on them constantly, actually forget about them until the next day or two! You aren’t going to help anything by constantly watching the market!
Trade to Live, Don’t Live to Trade.
In an article I wrote about how minimalism is good for trading, I discussed how the “less is more” approach to both trading and life is truly my approach and how I live my day-to-day life. So many people blow all their money on material things, thinking it will make them happy only to find the allure quickly wears off shortly after the get the item they desired. In this way, having less material things is much better, not only for you bank account and overall financial situation, but for your mind and stress levels.
This minimal approach also works in trading. The less you trade, the less you worry and think about the markets and the less likely you are to over-trade and over-leverage your account. It’s no fluke that MOST successful investors and traders are NOT day-traders.
- Less is more!
When you stop trading so much, you will find that your trading performance gradually improves. Why does this happen though? It’s quite simple; human brains are not naturally wired to be good at trading because we are not wired to be good at self-control and self-regulation of impulses. When you’re sitting in front of a computer with prices moving up and down and the potential to make endless amounts of money, it’s like a recipe for self-control to go right out the window. THIS IS WHY LESS, IS MORE!
The less your brain is involved with the markets, with your trades (especially with live trades), the better you will do, because the most effective way for us to practice consistent self-control is to simply lessen the need to have to perform it.
‘Nomad’ Price Action Trading Strategy Core Points…
So, you should now understand why trading like a nomad is so beneficial to both your trading performance and lifestyle. Now, let’s discuss the main pieces of a “nomad” trading strategy, so that you have an understanding of how it’s actually done:
- End-Of-Day Trading – This is probably the “cornerstone” of the nomad trading approach. End-of-Day trading is something I’ve written about extensively in other articles, which you can read about here, but the basic idea is that you are only making trading decisions after the New York close each day so that you are using daily charts the most and making sure you only consider bars that have closed out. This eliminates the noise and confusion of the lower chart time frames as well.
- Set and Forget – Again, another concept I’ve written about extensively before, and for good reason. Set and forget trading means that once you find a trade and have set up the parameters (entry, stop, position size, exit), you literally walk away from the computer until the next day after the New York close. You are not sitting there all day checking the charts and frantically trying to “figure out” what will happen (hint: you cannot figure out will happen so you have to trust your strategy and just do nothing most of the time).
- Simple trading signals – The price action signals that I trade and teach my students are simple in nature; they aren’t hard to learn, and that’s the way I like it. You simply do not need trade with indicators like you see plastered all over the internet on other trading sites. It’s just a confusing, overly-complicated and unnecessary waste of time. All technical indicators are just derivatives of price action anyways, so why on Earth you would not learn to just trade price action is beyond me. A nomad trader who is using their time to enjoy life instead of staring at charts all day, NEEDS a simple trading approach like this. Remember, the difficult part of trading is money management and psychology, so don’t make the actual chart-analysis and trading part difficult as well.
- Money management – Perhaps most critical to taking this “nomadic” and relaxed approach to trading, is money management. You see, if you are jacking your risk up to a level that makes you preoccupied with your trades, you aren’t going to be able to set and forget your trades because you’re going to be too worried about losing money. You absolutely MUST learn to control your risk per trade so that is not at an amount you cannot mentally handle.
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