Trading Like A Predator, Not The Prey
Have you ever felt like you are being preyed upon by some invisible ‘force’ in the market? The truth is, when we enter the trading cauldron we all start out as prey. When you enter the market, you step into a world of ‘predators’ who are trying to take money from you, let’s call these predators the professionals.
There’s always a guy at a poker table who will end up with all the chips, and there will always be one percent of the world who have most of the money, this is simply how it works; the predators (professionals) ‘feast’ on the prey (amateurs). You might feel like a victim, but it doesn’t have to stay this way for you as a trader; with the correct mindset and plan, you can turn yourself from prey into a predator and start grabbing your share of ‘chips on the table’.
Predators vs. prey in the market
Professional traders have been taking money off of novice traders since the advent of trading. So, if this is the case, how do you beat these pros, how do you stand a chance? But, are they pros? Just because they have money they can still falter; you’re only as good as your last trade. In other words; you can destroy weeks, months or even years of good trading habits with just one greedy or overly-emotional trade, and so any ‘predator’ in the market can quickly slip back to being ‘prey’.
Each one of us has the ability to be a predator or prey in the market, and we can go back and forth between them if we let ourselves slip. For example, you’re wondering how you could compete with billion dollar hedge funds and traders with a lot more experience, time and money in the market? News Flash: Hedge funds go broke all the time; those with money aren’t always the masters or best traders. The key point is that you’re only as good as your last trade, we have an article on that as well…one trade can make you or break you. If you falter and let yourself slip from your trading plan and discipline, you can easily become the prey once again.
Becoming a predator in the market is not necessarily the hard part, the hard part is remaining a predator over a long enough period of time in the market. A predator, or professional trader, learned long ago that the key to winning at trading was to do the opposite of what he did when he started out and was losing, and furthermore to continue to try and take money from those traders who are uninformed, naive and compulsive just as he once was. See how the other opponents are thinking…if they’re losers statistically, then how can you make money from them? The answer is, by consistently behaving in a contrarian manner to them.
Learning from the traps you’ve been caught in
To become a predator in the market, you must learn from your mistakes, quickly. If you keep making the same mistakes over and over, you will continue to be preyed upon by more skilled traders.
For example, if your stop losses keep getting hit even though you’re being patient and waiting for good price action signals, it might be the case that you’re placing your stop losses too close to your entries. So, the solution is to place a wider stop loss. You may not want to do this because it means you have to reduce your position size. But, it’s the correct thing to do and it’s how you will become the predator. What’s better, making some money, even if it’s less than you want, or losing money? I would pick the former.
Another example of learning from your mistakes is poor trade entry timing. Does the market seem to move the other way every time you enter? Are you always feeling like the ‘Johnny come lately’ of trading? If so, you may need to consider entering earlier or even the other way. Examine your entries and reasons for taking them. Are you waiting for actual setups to enter on or are you just diving in the market randomly all the time? Are you chasing trades and entering late because you missed them? If so, you’ll need to learn from these traps and fix your errors fast, or else you’ll continue to be the prey in the market.
What kind of strategy are you trading? Are you getting stopped out on breakouts all the time? Maybe you should switch to false breaks / fake-outs? The point is this; if what you’re doing is not working and you’re consistently losing money, you need to learn from these mistakes and change them, or else you will continue being preyed on by the ‘predators’ in the market.
Prey is vulnerable
Prey is vulnerable. So, you need to become less vulnerable in the market in order to stop being the prey. To do this, you need a good strategy, good risk management and a good trading plan, these things will equip you to be the king of your trading domain. Without them, you let your defenses down and open yourself up to the predators (pro traders) in the market.
Predators are good defenders by nature, because as they say in sports; ‘the best offense is a good defense’. Having a plan of action and protecting your money are critical in surviving and thriving in the market. Think about lions; lions have a plan, even if it’s instinctual in nature, they hunt together in prides and they surround their prey as if laying a trap. The best ways you can defend yourself in trading are through capital preservation and by being prepared through having mastered your trading strategy, having a trading plan and risk management plan.
You don’t want to be vulnerable like prey in the open field waiting to be slaughtered.
Wait for the right opportunity and execute with confidence
If there is one thing people think about when they think “predator”, it’s waiting patiently for the easy prey and then striking with confidence when the conditions come together for an easy kill. In trading, the predators are those traders who wait patiently for the obvious setups to form at the right place in the market. We call these confluent price action signals in my trading course and members community, and they are the types of setups that you want to wait for, like a predator.
Think of these types of trades as ‘one shot, one kill’. You wait for them patiently and then when they arise you execute the trade without hesitation. If you are trading everything you see, you’re significantly hurting your chances at making money, and you’re probably going to lose money because you’re not trading like a sniper. In other words, you are the prey losing your money to those predators who are waiting patiently and behaving with discipline.
At the end of the day, it all comes down to a choice. Will you choose to do what it takes to become a predator in the market, or will you continue to be preyed upon by those predators? Being a predator-trader takes effort, patience and discipline; all things those weak / prey traders in the market do not have.
24 Comments Leave a Comment
Learn from your mistakes and twerk your strategy from that lesson.
If it is large position sizing minimize, no strategy get a strategy first and always remember on capital preservation.
You have turned my world Nial, to be honest I had started to doubt if I will ever trade profitably, due to the time I have spent trying to figure out how to trade so. One shot, one kill. Thanks a lot to be this kind of a person who can share such big things. I will never turn back.
Thank you Nial. I have benefited immensely from your range of great articles. I thank your student who introduced me to you ‘Ages’. I am lucky to have this foundation… could have been worse for me. But I am internalizing the overall understanding of the market, patiently.
Great Article Thanks nial…..
Thanks Nial…..for helping transform prey into predator. Article is quite nourishing. Thanks again.
Thanks man you are the in forex trading teaching!
thanks Nial for everything
I really love it thanks for being there for me. I have learnt another great thing about trading.
Thank you for making me a good player everyday ..
I love this part and i will never forget it.
“……….you’re only as good as your last trade. In other words; you can destroy weeks, months or even years of good trading habits with just one greedy or overly-emotional trade……”.
It’s worth saying thank you the umpteenth time for the invaluable service you render to the trading world. Your articles help to redirect us to the right path (mindset) in trading, especially with the ever present allurement in the market to stray into trading disaster. Thanks for reminding us that “any ‘predator’ in the market can quickly slip back to being ‘prey’”.
God bless you coach.
I have leant that if I missed the trade I mustn’t bother trying to catch up instead I must be patient that could save me a lot of money as usual thanks so much Nial
This article says it all. It doesn’t a skyrocket-science to turn successful in trading. Having control over the SELF or the MIND with a simple price action strategy is the key.
As always your insight into my trading adventure is spot on. Good article. thanks, Nial.
Great article as usual Nial,
Since i have started practicing the art of ‘trading like a sniper’ my fortunes have turned around 180 degrees!
“Being a predator-trader takes effort, patience and discipline; all things those weak / prey traders in the market do not have”
This sums it up ….. until all the bad habits have been resolved your prey !
Nice article Nial. I can really relate to this. I find I have to occasionally remind myself to metaphorically put away the machine gun and to pull out the sniper rifle, and to only take those “one shot, one kill” trades. Thanks.
Yeah, right on boss.
Great article Nial, as always cheers.
As always, another powerful article. I really can resignate with much of the knowledge that you are sharing here, especially the part about widening the stop loss and reducing the position size always, when needed, without hesitation, to promote an edge. And to also know when to keep it tighter, but still enough to give a trade fair time to mature, without getting stopped out prematurely. It’s a fine line, a fine balance. I find the latter to be an art/skill within itself, very challenging aspect of trading, ‘the perfect stop-loss’ and I’ve been working at that diligently as of late. Slow but steady progression. Learning from mistakes immediately is another great emphasis. With all of the solid work you do here Nial, my favourite will always be your articles. When I read them I visualize, and it has expanded my trading ten-fold. Trade Philosophy is a great, under-rated aspect to trading and ‘looking’ at the markets. And effective, adept trade philosophy can only come from someone who has been in the game for awhile. And your level of professionalism and mastery really shines in these articles. Thanks.
I’ve over-traded so often in the past and learning to be patient is the most important lesson I’m practicing to stop being the victim in my trading.
Once again, great article
Great article this one…..Fits in your “members only” cartegory of material.