Today I watched a video and was shocked by the truth about trading! (There’s an Easter egg at the end.) It talks about a trading expert named David Paul who says that trading is really about making two decisions: 1. Is the market going up or down? 2. How much are you going to bet? Most traders fail not because they make the wrong first decision, but because they make the wrong second one. They don’t die from the direction, but from the position size. Assuming there’s a trading system with a win rate of 50% and a risk-reward ratio of 2:1, meaning you earn 100 when you win and lose 50 when you lose. This system seems impressive, but most of the time, you lose 30 when you lose and earn 50 when you win, and the win rate may not even be 50%. So, can that impressive system make you money? The answer is: it can and it can’t. The key is how you place your bets. David Paul says that the probability of losing twice in a row is 25%, the probability of losing three times in a row is 12.5%, and the probability of losing five times in a row is 3%. Losing five times in a row is not a small probability event; it will definitely happen as long as you make enough trades. When you lose consecutively, can your account still hold up? If you bet 20% each time, five consecutive losses will wipe it out! So, can’t I just control my position size? David Paul says that what really brings an account to zero is not consecutive losses, but the feeling of invincibility after winning a few times, leading to reckless bets! A single oversized position is fatal. So how can you achieve consistent profits? Paul says: you only need three things: 1. A chart pattern you truly understand, which could be head and shoulders, wedges, Fibonacci, but you must really understand it. He says he uses ascending wedges, descending wedges, Fibonacci, and patterns on the 89-day moving average....