PERFECT Your Trading Mindset: Dr. Paul’s Essential Advice

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the risk managers in the city are in

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fact coached into assessing the

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susceptibility of their traders to

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euphoria so the big problem and anybody

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who's traded for more than 10 minutes

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will tell you this the big problem is

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getting your mind around the clusters of

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good luck and the clusters of bad luck

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as the hit rate invariably falls now if

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you've got a system that's trend

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following and the darn thing goes into a

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range the system doesn't work

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many people will say "Well don't trade a

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trend following system when it goes into

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a range but you don't know the darn

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things in a range until it's been there

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for a while." You can put all the ADXs

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of this world on makes no darn

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difference okay the market has to go

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sideways for a while before you know

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it's in a range similarly if you're

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buying support and selling resistance

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okay and the market starts to trend well

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you're wrong so um you can have lots and

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then there's the noise in the market

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that causes you to get stopped out and

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stopped out unless your stop losses are

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really good the market makers will pick

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them off all day and every day then

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what's left after the market makers the

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algos will have a go at so uh your hit

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rate comes down uh and if you can be

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right in the forex market 55 to 60% of

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the time you're right up there with some

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really good traders you can make a heap

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of money with a 50% system if you make

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three times more when you're right than

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you lose when you're wrong 5 * 3 is 15

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and 5 * 1 is five that means that uh in

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10 trades you risk a pound to make a

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pound so you've got a positive

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expectancy system uh and that's great uh

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but handling with a a winning system

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that's right 65% of the time or 60% of

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the time that makes a fortune in paper

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most people will lose with that system

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unfortunately because of these darn

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clusters of good luck and bad luck and

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uh if you're over 20 you must have had

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periods in your life where everything

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goes well and you've periods of your

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life where nothing goes well and that's

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a cluster they happen in every facet of

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life okay uh and certainly if you get to

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over 50 uh over 60 uh hard I have to say

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it to believe it if you get over 60

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you've got really good years and bad

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years