 Welcome back to the Trade Hacker mindset. In this episode, I wanna talk to you about how structure actually equals freedom. Trading the markets can be difficult to master and seemingly just out of reach. Professional traders have a secret. Trading requires total mental and emotional control. It requires the Trade Hacker mindset. All right, so let's jump into this topic about how structure actually equals freedom. So this topic came about because a book that I read recently, it's called The Perfect Day Formula by Craig Valentine. I would encourage everybody to read it. It's a great book no matter what you're trying to accomplish in life. It's not a trading book at all, but there are some takeaways that I really thought related well to how we can act and structure our lives and our days and everything else around trading. So when it comes to structure equaling freedom, what do I mean by that? Well, I think as traders, at least for me, one of the things that really drew me to trading was the freedom that it could create, the time freedom that it could create, the financial freedom that it could create, the freedom of not having an employer, not having a boss, all of those things that draws us to trading really comes down to some sense of freedom. But here's the kicker. That freedom that we want so bad that we are drawn to trading because of also can become our enemy in our trading. So what do I mean by that? What I mean is, think about trading. There are an infinite number of ways to make money trading. You can trade directionally, you can trade delta neutral, you can trade stocks, you can trade futures, you can trade options, you can trade spreads, you can do pairs trades, there's so many different ways to trade and inside each of those silos, there are hundreds or thousands of different strategies and structures and timeframes and symbols and durations and different things that you can trade. And so this creates almost so much freedom without any structured rules, without any boundaries that what happens is, and I've talked about this a lot in past episodes, it kind of turns into that shiny object syndrome where it's easy to bounce around from one thing to the next. Something stops working so we jump over to something else and we're constantly in this cycle of bouncing around because we don't have any structure and we don't have any rules and we don't have any boundaries that we follow because there's nobody looking over our shoulder telling us that we have to do this or we have to do that. So if you're like me, if I start telling you that you need structure, it's probably gonna make you cringe, right? One of the reasons that I've always been self-employed or have always traded is because I don't want a boss. I don't want somebody telling me what I need to do. I don't want somebody telling me that I need to clock in at 8 a.m. and clock out at 5 p.m. So this may sound a little odd and this may rub you the wrong way, but I'm going to tell you that you have to have structure when it comes to your trading. You have to have specific set rules for your trading and this is actually going to liberate you and it's actually gonna allow you to achieve these goals and dreams that you have about trading which is that true freedom that you're looking for. If you use freedom in the process of your trading, you're never going to get the freedom that you want which is ultimately the financial and the time freedom that trading can create for you. Now, here's the cool thing. The rules that you create for yourself, this isn't going to require that you work any harder than you are right now. In fact, the opposite is true. You are going to get more out of less time by creating structure and rules in your trading. The other thing that structure is going to create is good habits, okay? It's going to help you get rid of your bad habits. It's going to help eliminate those which then makes it much easier to stick to your good habits which in turn allows you to make better decisions and have faster success in your trading. So here's what I'm going to ask you to do and I can't emphasize this enough. If you have not done this already, then you are treating your trading like a hobby, okay? And how do hobbies pay? Well, they don't pay you. In fact, they usually cost you money, right? So if you treat your trading like a business, it's going to pay you like a business. If you treat your trading like a hobby, you're going to pay for it just like you pay for a hobby. So here's what I would highly, highly encourage you to do at a bare minimum. I want you to write out your rules, okay? I want you to write out very specific rules for your trading and number two, I want you to read them out loud every single day before you trade. You would not believe the power that this has in the decisions that you make in your trading if you do this day in, day out and you become consistent with it, okay? And in your rules that you write down, there's some very specific things that need to be included. Number one, what strategy or strategies will you trade, okay? So what this does is it creates a structure. It creates a framework of the strategies that you trade. So if you see me or somebody else or a buddy or something online, you know, talking about some great strategy, that doesn't matter. That's not part of the strategies that you trade unless that's a strategy that you've written into your rules. So I want you to write very specifically what are the only strategy or strategies that you will trade and I would, you know, make sure that you, depending on your situation and this could be how much time do you have during the day to trade and you know, what's your mental capacity? You know, what's your experience level with different trading strategies or the strategies that you trade because that's gonna help determine the strategy and the number of strategies that you trade. If you're just starting out, you should not be trading five different strategies. You know, if you're just starting out, you should be trying to master one before you even think about trading another strategy. Now me, I trade a ton of different strategies. I teach a lot of strategies, I trade a lot of strategies and so for me, I've been doing this for 21 plus years and so for me, it's almost like second nature to have a lot of different trading strategies going on but for the majority of you listening, you've gotta narrow it down to just probably two or three depending on your level of expertise. If you're a beginner, maybe it's just one. If you're more advanced, maybe it's a couple more than that. There are very, very successful traders who are advanced, who've been trading for decades and still only trade one strategy. They become an expert in that one strategy, okay? So it depends on your personality. It depends on a lot of the other things that you've got going on. For me, it would be extremely boring for me just to trade one strategy and so for me, I like to trade a lot but the bottom line is you need to write down and be very specific about the strategies that you will trade because what you trade is not the same as what anybody else trades, okay? Number two, what symbols will you trade? So are you trading something that you're scanning a large list of stocks or different symbols every single day? If your strategy calls for that, that's fine but you just need to be very specific about what those symbols are or if you're using a scanner to find these different trades or whatever it is, you need to be very specific. If you're trading spreads and you're only gonna trade the big three indices, SPX, RUT, NDX, write those down, whatever it is, be very specific about the symbols that you trade and whatever it is that you trade, that means you can't vary and go outside of that so you can't start trading crude oil one day and gold the next day. If your specific strategy and your specific trading plan is designed for just the indices, okay? So be very specific and stick with those. Number three of this trading plan, of your rules, write down your position size. I cannot emphasize how important this is and that could be a percentage of your account that you'll risk on a specific position. It could be a specific dollar amount that you'll risk on a certain position and you can never go above that position size unless you update your rules for going forward, okay? So be very specific about how you choose your position size and what that position size is for each individual trade and on top of that, what's the overall amount of your account that you will allocate to trades? So your individual position size and your overall account allocation and I would do it per strategy. So if you're trading multiple strategies, you might say, okay, I'm not gonna trade anymore than 20% of my account on strategy X and I'm not gonna trade over 15% of my account on strategy Y and I'm not gonna trade over 30% of my account on strategy Z or whatever it is, be very specific about your individual position size and your overall account allocation. Now, we talk about this in all of our strategies that we will never risk more than 5% of our account on any one trade and we never like to risk any more than 30% of our account on any one strategy. Now, those are the max, that's the max, okay? So that doesn't mean that we risk 5% on every position. We might risk a half a percent or a percent or 2%, but the absolute max on any position that we would ever trade is 5% and the max that we would ever allocate to any strategy overall is 30% of our account, okay? Number four, list exact details of how and when you will enter a trade, okay? So if you are selling iron condors, for example, you might say something to the effect of I'm going to put my short strikes at the 20 delta and my long strikes are going to be whatever, a percentage outside of that or delta's outside of that and I'm only gonna enter trades when implied volatility percentile is over 50%, okay? That's just an example of like an iron condor strategy, but what I need you to do is you've got to write down exact details of the how and the when and the why of when, how and when you will enter each trade, okay? And then number five, exact details of how and when you will exit. Are you looking for a profit target? Do you, are you taking it off at a percentage profit or whatever that is, it depends on the strategy as far as what that would be, but you need to have exact details of exactly how and when you will exit a trade. Now, I'm gonna reiterate what I just said a minute ago. Read these out loud once you have it all written out and I would encourage you to write it by hand because there's something magical about writing with a pen to paper that actually helps it stick to your brain. Now, after you have it written out and maybe you write it out a couple times and you kinda tweak it and get it to the point where you really want it, then you can type it up and have it in your computer but I wanna reiterate, read it out loud every single day. Read it out loud so that you hear your voice saying it every single day and I would encourage you to keep it on your trading desk. Keep it right by your computer so that it is front and center every single day that you trade. Now, I know that this is not the most exciting part of trading, right? This is not the reason that we are drawn to trading to create this big, elaborate, structured plan. I get it, but unless you do it, you will never be successful trading. The idea of just winging it is not gonna get you what you want. If you're just gambling, if you're just using the markets as your casino to gamble, then that's what you're gonna get out of it and gamblers never win but if you're here to actually become a professional trader, if you're here to actually create consistent income, if this is something that you really wanna do, if you really want the benefits and the value and the freedom of finances and time that trading can give you, which you should because it's the most amazing lifestyle that you can create, if you really want that, the bare minimum that you have to do as far as creating rules and creating structure is just what I listed out. Okay, now I'm gonna add one more thing to this and this is a pretty critical piece as well and that is you've got to track your trades. You've got to journal your trades and when I say journal, not only writing down if it was a winner or a loser and your profit and your percent profit and that kind of stuff, but you've also gotta have a column for notes about what happened with that trade. Did you follow the rules? How are you feeling when you took that trade? And by doing that over and over, you're going to see a new perspective of when and how you've taken losses and what's gonna happen is you're gonna look over your trade log at the end of the month, at the end of each month and you're gonna see that probably, most likely the biggest losers or a lot of the losing trades is when you didn't follow the rules that you had written out and what's gonna happen is you are going to make less mistakes. You are going to break your rules less. You're not gonna be perfect at first, so don't get frustrated. Don't say, what's wrong with me? Why can't I follow my rules? Understand that it is a process, that it takes consistency over time, but what's gonna happen is you're going to break your rules less, your performance is going to improve, then you're gonna break your rules even less and your performance is going to improve even more and then you're gonna get to the point where you're gonna look back over your journal and say, if I just don't make these stupid mistakes, my P&L is going to be so much better and you're just, you're gonna get to the point where you're gonna be fed up with breaking the rules and because what the outcome has been on your trading results, that eventually you're going to stop and that's when your trading is gonna go to a whole new level. I hope this episode was helpful. If you have any questions, you can always hit me up in our community, just go to community.navigationtrading.com. There's hundreds of traders interacting on a daily basis, not only about the mindset stuff but helping each other become better traders. I look forward to seeing you on the inside and we'll see you in the next episode.