Just a forewarning, these pillars aren’t strategies or hidden secrets, in fact, one will probably have heard of these key trading pillars before.
However, their belief is that people are smart, making money in the markets is possible… People just need to be reminded of the basics to ensure long-term, sustainable profitability!
Key Pillar #1: Risk management
CallistoFx has warned you, this isn’t going to be interesting. Risk management is the first key pillar that CallistoFx always preaches during their streams and in their private zooms with members.
Why?
“Most people tend to forget that trading isn’t a get rich quick scheme, in fact, it’s quite the opposite. The richest traders I know got rich slow… but steady” says Nick, the head analyst.
Trading is a get rich slow game, and consistently pushing your risk tolerance higher and higher goes against all fundamental principles.
At its core, risk management in trading encompasses a spectrum of strategies and techniques designed to identify, assess, and mitigate potential risks associated with market fluctuations. It serves as a proactive shield against adverse outcomes, ensuring that traders can weather the storms of volatility and preserve capital in the face of unpredictability.
The most fundamental pillar of risk management lies in the concept of capital preservation – risking a small percentage of your account per trade. With this, traders can shield themselves from catastrophic losses that could jeopardize their financial well-being.
This approach not only bolsters resilience but also fosters a disciplined mindset essential for long-term success in trading.
Key Pillar #2: Sticking to a set, proven, backtested strategy
The markets are volatile, every single second fortunes are made and lost. Due to this dynamic nature, most beginner traders are especially drawn to trying “the next new strategy” that works in today’s market condition.
The truth is this: Most strategies work in the long run, a trader just has to have the patience to let it play out
Take for example CallistoFx’s simple break and retest strategy. This isn’t a fancy strategy conjured out of thin air, it’s a war-tested strategy that’s worked for thousands of traders… all that was done was tweaking small things to increase their win-rate in today’s ever-changing market condition.
Another example is the Asian sweep strategy, it’s been around for years… and every single stream it’s proven to have a massive win rate.
Why?
Because of rigorous back testing and years of sticking to the same strategy over and over again. The saying “If it’s not broken, why fix it?” should be top of mind when deciding what strategy to use on a single pair.
It’s the light that illuminates the treacherous path called “The markets”, by sticking to a single strategy any trader will get accustomed to the nuances and little details that a strategy has, allowing one to effectively navigate the markets without bumps on the road.
Furthermore, consistency in trading breeds confidence – a psychological asset that can be instrumental in achieving success over the long term. As traders accumulate a track record of consistent performance by sticking to their chosen strategy, they gain confidence in their ability to navigate the ups and downs of the market with resilience and composure.
This confidence serves as a bedrock upon which traders can build their success, allowing them to execute their strategy with conviction and poise even in the most challenging of market conditions.
Key Pillar #3: Test, test, test
Remember this, “history repeats itself”.
In essence, backtesting involves rigorous evaluation of a single, consistent trading strategy using historical market data to assess its viability and performance under real-world conditions.
By simulating trades based on past market behavior, traders can gauge the effectiveness of their strategies, identify potential pitfalls, and fine-tune their approach to maximize returns while minimizing risks.
Backtesting helps traders see how well their trading plans work in different situations. By testing these plans with past market data, traders can learn what works well and what doesn’t. This helps them improve their strategies and be ready for different market situations
Moreover, backtesting serves as a potent tool for risk management – a cornerstone of success in the realm of trading. By quantifying the potential risks and rewards associated with different trading strategies, traders can make informed decisions about position sizing, risk exposure, and portfolio allocation, ensuring that their capital is deployed prudently and strategically to achieve optimal results.
Key Pillar #4: Compound your assets for bigger overall wins
It’s an extremely common saying for top traders, but what does compounding mean in the realm of forex trading?
To put simply, compounding is reinvesting profits instead of withdrawing immediately, delayed gratification instead of the quick buck in the bank account.
By reinvesting profits and allowing them to compound over extended periods, you essentially leverage on the key concept of “exponential returns”.
Even modest gains, when compounded consistently over time, can snowball into substantial wealth accumulation, providing traders with a pathway to overall financial independence.
CallistoFx’s personal philosophy is this: Why withdraw a mcdonald meal when you can slowly and consistently compound it into a house? (Not that there’s anything wrong with putting food on the table, it’s just a matter of perspective)
This is what generational wealth is built on. One can never “earn” your way to generational wealth, one can only compound his/her small earning capacity in his/her lifetime and let time do the trick for their offspring to come.
It’s a topic they rarely ever go into but they genuinely believe that trading is the way to go for generational wealth.
Key Pillar #5: Fundamental biases
For the non-nerds out there, fundamental bias essentially refers to the current beliefs on where the markets are going to go… up or down.
Sounds simple, but it can go horribly wrong if one doesn’t pick the right direction.
The primary benefits of fundamental bias in trading lies in its ability to provide traders with a broader perspective on market dynamics. Unlike technical analysis, which focuses primarily on historical price patterns and technical indicators, fundamental analysis delves into the underlying drivers of market movements, offering insights into the fundamental strengths and weaknesses of economies, industries, and companies.
This holistic approach enables traders to make more informed decisions about market direction, timing, and risk management, enhancing their ability to capitalize on profitable opportunities and mitigate potential losses.
Moreover, fundamental bias serves as a compass for traders navigating the ever-changing landscape of financial markets.
By staying attuned to key economic indicators, geopolitical developments, and industry trends, traders can anticipate shifts in market sentiment and adjust their trading strategies accordingly. Whether by capitalizing on emerging trends, hedging against potential risks, or identifying undervalued assets, fundamental bias empowers traders to stay ahead of the curve and position themselves strategically in the market.
As multi 7-fig traders, the team at CallistoFx believes that these are the top 5 things that have not only kept them afloat, but thrive in an uncertain market. Like CallistoFx mentioned in the beginning of this article, they believe everyone knows how to trade, so, interesting strategies and interesting ways of interpreting charts shouldn’t be top of mind.
Everyone just needs to be reminded of the basics, that’s how one grows as a trader. As the great Alex Hormozi said “The best people never not do the basics” and thus, I conclude this article.
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Disclaimer: This press release may contain forward-looking statements. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.
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Country: Singapore
Website: https://www.youtube.com/@callistofx