Harsh Truth About Trading: In Books VS In Reality

7 cze 2023

Most traders start their trading journey by studying theory first, reading books or taking video courses before putting these newfound skills into practice. But once they start trading on a real market, they quickly realize that things are not as straightforward as the books make them out to be.

In this educational article, we will take a critical look at the difference between theoretical knowledge and practical experience.

📍And first of all, do not get me wrong. I am not trying to imply that trading books or courses are bad.
Theoretical knowledge is essential for successful trading, and of course the books are the best source of that.
The problem is, however, that books can be misleading. The examples in books are always tailored. When the authors are looking for the examples of the patterns, of key levels, they are looking for the ideal cases.

📍The problem becomes even worse, when one start studying the trade examples in books. And of course, the authors choose the brilliant winning trades with huge take profits and tiny stop losses.

I guess you saw these pictures of "sniper" entry trades with 5/1 R/R.

The inexperienced trader may start thinking that the markets are perfect and act in total accordance with the books.
That all the trades that he will take will bring tremendous profits.
That the identified patterns will work exactly as it was described.

📍The harsh truth is that books and courses are simply the compositions of different examples, cases and market situations.
In reality, each and every trading setup is unique.
The reaction of the price to the same pattern will be always different.

Please, realize the fact that books are only good for acquiring the knowledge. But in order to survive on financial markets, you need the experience. And the experience will be gained only after studying thousands of real market examples in real time.



📍Here is the example of a double top pattern that we were trading with my students on AUDJPY.

In books, double tops are always perfect. Once the market breaks the neckline, the price retests that and then quickly drops.
So the one can set a tiny stop loss and a big take profit.

However, after a retest of a broken neckline, AUDJPY bounced and the market maker was stop hunting the newbies. Our stop loss was way above the head, and we managed to survive.
Even though the pattern triggered a bearish movement, the reaction of the market was far from perfect.

Be prepared, that the market will much different from what you see in the books.
Good luck to you!