Why Your Trading Strategy Isn’t Working 🤔📉

Welcome back to another edition of The Trading Brief, let’s go over why you may be struggling and brief you for the coming week. But before we get started, let’s put a feeler out there…

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Table of Contents

1. Why You Are Struggling

2. Prop Firm Deals

3. This Day in History

4. Important Data Events

5. This Week's Trading Levels

NEWS
Why Your Trading Strategy Isn’t Working 🤔📉

It’s not your indicators. It’s not your charts. It’s not even the market-makers conspiring to hunt your stop losses. The uncomfortable truth is that your trading strategy might suck—not because it’s inherently flawed, but because you’re sabotaging it.

Let’s break down why this happens and how to fix it.

The Prop Firm Trap: Oversizing and Overconfidence

Prop firm traders often start with a ticking time bomb: the temptation to size up aggressively. With large, leveraged accounts dangling in front of them, many fall into the trap of taking positions far beyond their risk tolerance.

According to a study by Lo et al. (2004), “Traders often overestimate their ability to predict short-term price movements, leading to an increased likelihood of substantial drawdowns.” In other words, sizing too large is a recipe for disaster, particularly in volatile markets.

The allure of quick, sizable gains often overrides sound judgment. A losing trade doesn’t just hit your account balance—it shatters your confidence. From there, a cycle of revenge trading and poor decision-making can spiral out of control. Prop firm traders frequently fail not because they don’t understand the market, but because they’re trying to sprint a marathon.

Trading Psychology: The Silent Killer

A solid trading strategy is only as effective as the person executing it. The problem? Most traders have a fragile psychological framework.

Fear, greed, and impatience are the holy trinity of trading failure. You might have the perfect entry and exit plan, but the moment a trade moves against you, emotions creep in. “Cut your losses short and let your winners run” is a mantra every trader knows, yet few actually follow. Why? Because letting trades work requires emotional discipline—a trait that’s often underdeveloped in newer traders.

Brett Steenbarger, a psychologist and trading coach, emphasizes, “Successful trading is 90% psychological discipline and 10% strategy. Without the former, the latter is meaningless.”

Stick to the Plan, Size Down, and Breathe

Here’s a radical idea: stop tweaking your strategy every time you hit a rough patch. Instead, commit to mastering your execution. Here are three core principles to follow:

1. Stick to Your Strategy Every strategy experiences drawdowns. Jumping from one approach to another will leave you perpetually chasing your tail. Define your edge, backtest it thoroughly, and trust the process.

2. Size Down Risking 1-2% of your account per trade may seem “boring,” but it’s the best way to preserve capital and stay in the game. Smaller position sizes also reduce the emotional burden of each trade, allowing you to make rational decisions.

3. Let Trades Work Stop micromanaging. If you’ve set a stop loss and a profit target, respect them. Constantly adjusting your exits undermines the logic of your strategy. “The market will do what it wants,” as trader Mark Douglas famously said. “Your job is to manage your expectations, not the market.”

The Bottom Line: Your Strategy Isn’t the Problem—You Are

The harsh reality is that most trading failures stem from psychological missteps rather than technical flaws. By sticking to your strategy, sizing appropriately, and allowing trades to play out, you can turn a mediocre plan into a profitable one. Remember, the market rewards patience and discipline—not overconfidence and impulsivity.

So the next time you’re tempted to blame your losses on a “faulty” strategy, take a step back. Ask yourself: am I sticking to my plan, or am I letting my emotions dictate my trades? The answer might just save your trading account.

PROPRIETARY FIRMS
Best Prop Firm Deals 1/13

1. My Funded Futures is offering up to 12% off on certain plans! Use code SUCCESS

2. Apex Trader Funding is offering 50% off! Use code SUCCESS

3. Take Profit Trader is offering 50% off! Use code DEAL

4. Tradeify is offering 50% off Growth and Advanced accounts!

These are the firms that we currently recommend, this list is updated weekly! Thank you for your support!

REWIND
📜✨ This Day in History: Trading Edition (M-F Highlights) 🕰️

Monday: 🌐 January 13, 1989 – Tim Berners-Lee submitted his proposal for the World Wide Web. Fast forward, and high-speed internet is now a trader’s best friend. 💻

Tuesday: 💻 January 14, 2000 – The Nasdaq crossed 4,000 during the dot-com boom. A wild ride with a crash soon after, teaching us that bubbles don’t last forever. 🎈

Wednesday: ✊ January 15, 1929 – Dr. Martin Luther King Jr. was born. His fight for equality inspires us to seek fairness in markets and opportunities. 🌍

Thursday: 🛢️ January 16, 1991 – Operation Desert Storm began, sending oil prices skyrocketing. A reminder that geopolitical events can create market volatility. 📈

Friday: 🏦 January 17, 2008 – Bear Stearns posted its final earnings report before its collapse. The Great Recession taught us the dangers of leverage and poor risk management. ⚠️

By reflecting on these events, you can gain a deeper understanding of market trends and forces shaping today’s financial world. 🌎

Stay focused and trade wisely! 💼

EVENTS
Important Data Events - Week 3

These are some market moving events that are occurring this week, take a quick screenshot of this list and set reminders as markets can get volatile during these times.

Monday, January 13th

Tuesday, January 14th

Wednesday, January 15th

Thursday, January 16th

Friday, January 17th

WEEKLY TRADING LEVELS
FUTURES INDICIES

Enjoy this list of levels that have been curated for you! These levels are some major support and resistance levels that have been identified as areas of interest.

Use them to guide your charting, happy trading! ☘️