Adapt your trading strategy to survive in the market

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It is not about the money you have, nor how brave you are, it is not about what you know either, the factor that determines your survival is your trading strategy. It is the same strategy that has selected you to walk on earth while twenty other species of hominids have died.

You’re a homo sapiens and you’re interested in trading. But you live in a body designed to survive in the African savannah, able to use the artifice to survive in colder climates, which needs the holly of the culture in which it was born to be able to stay alive.

Adapt your trading strategy or die

Nothing in you is made for trading or your body that is annoyed to be prostrate in a chair or your neck that is forced to keep your gaze fixed, or your eyes that fatigue to observe the price so closely, far less your mind.

The schemes that you shoot in front of the market, the reactions generated in you by the accelerated movements of the price are the result of your conditioning, plus your cognitive biases by default.

What determines your survival in the market? It cannot be the size of your account even if the size of your account is important. But that does not determine your success: you can succeed with a small account, and you can fail with a very large account.

Is it your courage then? Of your ability to commit your capital and buy when everyone is selling or selling when everyone buys? That is important. While you operate next to the dough you will lose as the dough loses. Understand that if the public buys and you buy with the public, who is supposed to continue buying so that the price is revalued?

If the public is buying, be assured that the professionals will not be those who will buy later and if they do not buy later it is because they have already bought and if they have bought they have done it before the public, so, if it is the public that is buying are the professionals who are selling. You have to have it very clear about the time of buying and selling.

Be coward to win

Then you have to be brave, right? Because you have to buy when everyone sells and sell when everyone buys. You have to compromise at a time when everything seems to indicate the opposite direction to which you are going to take. That requires value, but it is not value that makes the difference. You can be very brave and fail as an operator, and you can succeed by being a coward.

Can this trading strategy will make you survive in the opposite behavior? Instead of courage, then cowardice? Being a coward is a feature that characterizes us. We carry cowardice in our genes. This is necessarily so because we are the heirs of those who have survived and those who have survived have been the cowards, not the brave ones.

Those who have hidden in a cave when there has been a war, those who have fled faster than others when they have been attacked by a predator, those who have betrayed the group and have taken advantage of a privileged knowledge, have found a fig tree and the find has remained for them. When they eat the fruit they have had a better chance of success than the rest of their companions.

The brave ones, those who have set out to explore are those that the cowards have found riddled by the arrows of the enemy or devoured by the beasts. Cowardice has helped our ancestors survive. Maybe that’s why we’re such bastards.

As a trader, being a coward means acting with extreme prudence, not risking, waiting for the movements to be confirmed. It’s not about catching a falling knife. It is not about being the first to buy a market in free fall. It’s about being more cowardly, more prudent, more fearful and waiting for your moment. The market always tests, always gives another opportunity. It is the second rat that eats the cheese.

But neither is that the key element that determines your survival. If you wait too long, if you are looking for security in the confirmation of a movement you will be acting as the majority and the majority loses. You will be entering late. At the moment of acting, you must act, not expect more confirmation and more security.

Your knowledge is the key to survive

So it’s about knowledge to determine trading strategy? Is that the trait that will determine your survival? Is knowing more will allow you to endure long enough to achieve the desired success? Knowledge is the opposite of ignorance and there is no doubt that if you are ignorant your chances of success are zero as an operator. And believe me, we are all ignorant, we do not know what we should know and what we think we know is partially true and fundamentally wrong. Our ignorance about our ignorance keeps us clinging to a fantasy, chained to a raft that sinks and drags us.

With adequate knowledge, will we survive? Will knowing make us free? Not as traders, this is not the final element, even though it is an important element. You need to know, you need valid answers, useful information in the form of knowledge, but there are many people who know everything they need to know and lose one day and the next.

The markets are paved with the corpses of very clever traders, real geniuses, teachers of mathematics, theoretical physicists, statistics, very creative people, teams of engineers, programmers, risk managers have been ruined, and others Many people knowing less, ignoring almost everything, achieve success and gain consistency.

It is not that ignorance favors consistency, far from it. It is that knowledge does not guarantee it. Those who do not ignore everything, those who ignore dominate the fundamental, but are not trapped in the collection of knowledge. They do not pursue the lure of the new system, the new paradigm or the new trading strategy. They know what they need and they execute it as they should.

So what do we have left for trading strategy?

What element ultimately determines our survival as operators? I believe and it is my opinion that, once the other factors have been eliminated, when it is not about capital, or courage or cowardice and it is not about what one knows, what remains as a determining factor is the same factor that explains why the earth is populated by homo sapiens and not Neandertals, it is about adaptation, what survives is able to adapt to the environment. It is the ability to adapt that determines your success.

If the market changes you have to adapt, you cannot type in a methodology that is no longer valid, or with an opinion that does not correspond to reality. If your analysis says long, and you position yourself with that bias, you must be mentally agile enough to quickly integrate any information, not validate your point of view, but contradict it. If you go long but the market shows weakness in the impulses you must be quick to detect that, if you go long but the setbacks are strong you must take it into account.

As Erick Hoffer said: In an environment of change, one who is willing to learn will inherit the earth, while the one who already knows will wake up one day being perfectly prepared to face a world that will never return.


The market is a dynamic system, whose behavior changes constantly. If the market changes our trading strategy also have to be changed. It needs to be adjusted to the reality it serves. To insist on using a trend system in a market in rank is condemned to extinction.

It does not matter if you are as strong as a Rex tyrannosaur, if you do not adapt to the environment you will become extinct. Millionaire investment funds have ended up bankrupt, just as banks have bankrupted, the smartest, the bravest and the most cowardly have been ruined, but those who have adapted to the changes have adjusted their operations when the market has touched in a new key those have come out victorious. The ability to adjust to the changes is the key to survival.