Can Trading Be Boiled Down to Just These 2 Things?

12/29/2016 12:32 pm EST


Though he thinks trading systems, price action, and technical analysis are helpful tools for the trader to have at his disposal, Ryan Mallory of doesn't think they are at the root of success; instead, he feels the ability to trade successfully really comes down to these two key traits.

I see so many self-proclaimed trading philosophers on Twitter (TWTR) constantly spouting off fancy trading quotes and cliches. Here's one I saw on Twitter this week:

"What separates successful technicians from not so successful? No matter the chart style, it comes down to the analysis of price action."

Sounds brilliant.

Feels right.

Touches the soul.


It is just not true.

You got others out there that will say,

"Buy low, sell high."

"Buy the rumor, sell the news."

"Sell in May, Go Away."

Blah, blah, blah!

If you really want to know the two things that successful trading boils down to, it isn't smarts, it isn't trading systems, it isn't price action, or technical analysis. Those are all helpful tools to have at your disposal, but they have nothing to do with what is at the root of success.

What is at the root of success is the ability to manage risk and to manage yourself. If you don't do both of these things, nothing else will ever matter. So when someone says it all comes down to "price action," he apparently has never examined himself as a trader beyond the ability to look at a chart.
I use charts every day, I scan hundreds-if not thousands-of them every single day. And yet the ability to trade successfully doesn't come down to how many alerts go off on my trading platform or how many good set-ups I can find.

No. Far from it, it comes down to the ability to manage the risk on each and every trade. To follow the steps that I have put in place to keep price action from getting out of control, and in the process, to control myself from not violating my risk principals, to not trade out of frustration and boredom, or to take on a trade where I cannot define the risk.

To see what it all comes down to, click here.

By Ryan Mallory, Founder,

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