How To Succeed In Trading With Logic

Trading With Logic

Why is it so hard to make money with trading? The answer is quite simple: Our emotions are responsible. The big question is now: How can we control our emotions? There is only one way and this way is called: Trading with logic. How can a logical understanding change your trading forever? These questions and more will be answered in this webinar.

Markus has been working in the financial sector since 1999 as a trainer and analyst. He has also been a trader at the asset management Born Traders GmbH for 6 years now. Additionally, he is responsible for his own trading and education service, DowHow Trading.

Markus Gabel website

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Trading with Logic: Escape the Cycle of Suffering

The world of trading can be a whirlwind of emotions fueled by hopes of quick riches and fear of crippling losses. But what if there was a way to approach trading with logic, removing the emotional rollercoaster and increasing your chances of success?

Marcus Gabe, a seasoned trader with over 25 years of experience, shares his unique perspective in this webinar. He argues that the key to escaping the “circle of suffering” most beginners find themselves in lies in embracing logic and understanding the fundamental mechanics of the market.

Forget the Holy Grail: Embrace the Power of Logic

New traders can spend countless hours searching for the elusive “holy grail” – a perfect indicator or strategy that guarantees profits. Marcus dispels this myth, emphasizing that the market itself is unpredictable. Instead, he advocates for a logical approach that focuses on understanding how the market works and developing a set of rules based on probabilities.

This logical approach starts with a simple truth: you cannot control the price. The market is driven by a complex interplay of supply and demand, with “bigger fish” like large institutions influencing price movements.

Trading Demystified: Order Book and the Buy Cheap-Sell Expensive Rule

Forget fancy indicators! Marcus highlights the importance of the order book, which displays the current buy and sell orders at various price points. This, he argues, is where the true action happens. Understanding the order book allows you to identify areas of potential price movement based on supply and demand imbalances.

But how do you actually make money in this environment? Marcus reiterates a fundamental principle: buy cheap and sell expensive. You might think this is obvious, but many traders get caught up in the emotional swings of the market, deviating from this core strategy.

The Battle Within Your Brain and Trading Psychology

While logic is key, Marcus acknowledges the human element in trading. Our brains are wired for survival, not for calculated risks. This can lead to emotions like fear and greed taking over and outpowering our logical desisions, which end up hurting our bottom line.

One way to combat this is by developing a clear understanding of your own trading psychology. Marcus emphasizes the importance of asking yourself five key questions before entering a trade:

1. What do I have to do?
2. How do I have to do it?
3. When do I have to do it?
4. Where do I have to do it?
5. Why do I have to do it?

If you have clear answers to these questions, you can stay focused and avoid emotional decision-making.

Rules vs. Emotions: The Unspoken Truth About Losing Money

Most traders lose money, and Marcus points out a crucial reason: failing to follow their own rules. The emotional turmoil during trading often leads to abandoning a well-defined strategy in favor of a desperate attempt to “win back” losses.

This behavior is fueled by a concept Marcus calls “Basel Ganges” – a play on the German word for “baseless.” It’s the illogical thinking that takes hold when faced with losses, leading you to desperately search for an explanation or a way to “fix” the situation.

The Power of Probabilities and Trade Management

The key to success lies in understanding that trading is a game of probabilities, not guarantees. Just like 2 + 2 can sometimes equal something other than 4 in the unpredictable world of trading, your results won’t always be perfect.

This is where effective trade management comes into play. By having clear rules for entry and exit points and for risk management, you can navigate the market’s ups and downs without succumbing to emotional impulses.

Marcus emphasizes the importance of knowing your win rate – the percentage of your trades that are profitable. This, along with proper money management techniques, allows you to stay in the game even during losing streaks.

Conclusion: Embrace Logic and Channel Your Inner Master Yoda

Marcus concludes by encouraging viewers to develop the courage to be logical traders. Just as Master Yoda emphasized the power of reason in Star Wars, so too can logic be your guide in the often-uncertain world of trading.

By understanding the market mechanics, controlling your emotions, and developing a clear, rules-based approach, you can escape the cycle of suffering and increase your chances of becoming a successful trader.

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