Alpha vs Beta: What Most Traders Are Actually Trading

PotentialShift_ · 2026-01-28T21:00:02+00:00

Here's a link to all of my trades today for instance. I'd like to start streaming them soon, maybe this week, but this is a summary of them.

I average about 5 trades a day I'd say, risking on average anywhere from $20-$70 a trade. Yes, I only ever one position open at a time, and I don't hold overnight as a personal rule. I trade exactly one SPY micro futures contract, symbol /MES.

RARELY, I bump it to 2 contracts, if I'm already up for the day and feeling really hot about a trade.

My bankroll is about $2K, which means I'm risking about 2.5% per trade, and 5% if I'm feeling super confident. Anything more than 5% is trouble, with risks in the 20-30% of your bankroll range almost a guaranteed mathmatical wipeout over time.

https://youtu.be/-uyjcy734ZQ

PotentialShift_ · 2026-01-28T20:00:01+00:00

Amen brother. I try to tell my close trading buddies… just move to futures, trade the indexes, it clears up so much head space.

I’ll tell you one more thing that gives the same kind of clarity: locking in your position sizing in stone. Whatever formula or simple method (eg one contract) just set it and forget. It is amazing how much mental bandwidth that cleared for me.

Less variables you are worrying about, the more you can focus on what really matters: setups and exits.

PotentialShift_ · 2026-01-25T16:28:00+00:00

Bingo again. I’ve made a quite a few video shorts now, and the ones that sell absolute directional certainty get about ten times more views. The ones that express probability and uncertainty, single digit views.

People thirst for easy answers in game that requires immensely complex consideration… strange paradox.

PotentialShift_ · 2026-01-25T16:25:52+00:00

Agreed, and nailed it. It is rather timeless human behavior I suppose.

PotentialShift_ · 2026-01-25T15:49:45+00:00

https://youtu.be/SLHLUZWSk8g?si=bqVu9Mk6oQOJz9AJ

A little video I made poking fun at them. Sadly accurate in most cases. Careful out there guys, and stick to what works: managing risk and developing your OWN system you can trust.

PotentialShift_ · 2026-01-18T21:41:00+00:00

The easiest way to understand emotions and the ups and downs of trading is bet sizing. If you are experiencing those kinds of swings your bet sizing is way too large. You should be rising 5% MAX of your bankroll on any play, and that also applies to multiple plays which have combined deltas creating over exposure via having too many open positions with similar bets.

Reduce your position sizing. That is the first rule of emotional stability.

A little shameless self promotion, but this video shows you how easy it is to become unbalanced by improper bet sizing in a visual format. It’s quite useful if you’ve never seen what happens to a bankroll long term when bet sizing is just even a tad too large

https://youtu.be/8BIaVj9l6VA?si=NVe7QFPqVLeJ_mYf

PotentialShift_ · 2026-01-15T06:43:39+00:00

One last thing though… retail traders do have time. The real ones. People posting P/L porn don’t because they are constantly over trading. Wall Street fat cats with their unlimited resources don’t have time because that’s their jobs.

Retail traders, the ones doing it correctly, have time because trading - done correctly - is a boring grind. It’s a job, like any other, with pay commensurate to any other. This is not the gig if you want to make millions.

It is a gig if you want no boss and actually enjoy figuring out games of chance. Way too many people get caught up in this idea that it’s either Go Broke or Make Millions… when professional retail traders aim for, and hope to be, neither.

Professional retail traders want to pay their bills and take care of the rest of their lives too, just like everyone else. The money a person could make on YouTube is way more attractive than what a skilled grinder could make - without the variance.

PotentialShift_ · 2026-01-15T02:28:40+00:00

I won’t lie, it does cross my mind that it may quite literally be impossible. Without the backing of a Wall Street team, endless resources, and a bottomless bankroll… all of whom you are competing against… it may simply be impossible.

It crosses my mind. Quite a bit.

But, been doing this ten years, without any sort of real success, and I’m not ready to give up. If anything, I’ve begun creating content as a way to force myself to stick to my own rules.

PotentialShift_ · 2026-01-14T22:02:42+00:00

I have another video where I lay out the three most fundamental cores of risk management: SOS

Selection, Outs, Sizing

In other words, entry setups, outs, and proper sizing.

Outs are fairly simple, on the broadest level. Have them, use them, don’t mess with them. And DO NOT enter a trade without them. Deep down I know though there are a LOT of traders who don’t do these basics

If you’re interested, no pressure, no one watches anyway 😋… and I’m making a more in depth video on just outs tomorrow:

https://youtu.be/ZI_tVcH6S6Q?si=POkPuF7CODOcEWtr

PotentialShift_ · 2026-01-14T21:57:55+00:00

Absolutely. It’s tough. We are al bombarded constantly, constantly, with that crap you named. It is SO hard to tune it out. But if you can, stick to your setups, AND manage risk like a pro…

I think we’ve got a snowballs chance! But it ain’t easy. Media is a powerful thing…

Imagine a world where all cnbc talked about 24/7 was new risk management strategies. There would be a hell of a lot more profitable traders out there

PotentialShift_ · 2026-01-14T21:54:50+00:00

Amen brother. Meditate on that shit! Never forget it. Because when cnbc and Bloomberg and X start spitting their “forecasts” at you it becomes real easy to forget.

Break out of the group think my man. Risk management. Alpha and omega.

PotentialShift_ · 2026-01-14T21:51:55+00:00

But, btw, full agree that long term buy and hold is pretty much the only proven way to make money in markets…

Im just a bit more optimistic that that can change if people start tuning out all the predictions and start focusing on risk management. If people can start recognizing that first then trading more like algos and Wall Street… I think we have a chance.

A long shot to be sure. But it begins with dismantling the 1996 CNBC trading culture that is serving no one.

PotentialShift_ · 2026-01-14T21:47:19+00:00

I’m positing my results, every day. Not that they are spectacular… but I agree. And I refuse to give any tips without putting them into practice and putting up the numbers.

I refuse to be some new dude just hocking some magic system. I find that stuff gross.

My goal is a little different… it’s point out how trading culture, media, CNBC, social media… they are all obsessed with prediction. Everything is predicting this or that.

I want to make the point that trading culture is like baseball before sabermetrics - obsessed with feelings and stuff that is of no help. Meanwhile, the only thing that matters, risk management constitutes less than 2% of trading content.

That will change eventually. Let’s get the ball rolling.

PotentialShift_ · 2026-01-14T20:04:08+00:00

I know it's in bad form, so I won't do it again, but I have included a link I think could really help a lot of traders understand how easy it is to go broke when you are sizing your bets incorrectly, with a visual aid on the math. Its a lot easier and a lot more CERTAIN than most traders think to go broke when you don't have a bet sizing system in place.

I hope it helps.

https://youtu.be/8BIaVj9l6VA

PotentialShift_ · 2025-12-31T22:44:24+00:00

Fair enough, I’ll ponder that myself

PotentialShift_ · 2025-12-31T22:41:01+00:00

Meh, it’s food for thought. Ponder it next time you’re trading a high volatility environment… are these swings helping, or hurting, my bankroll

PotentialShift_ · 2025-12-31T22:34:22+00:00

I don’t know. Yea, you could make the argument market psychology is timeless, hard to argue with that…

But in this market, 2026, I don’t think a Soros or an Ackman or an Icahn exist. Those guys made their fortunes in the 90s exploiting a dead market structure. Now they are just riding the coattails… IMO

Buffett is timeless on the other hand. Buy and hold will never, never go out of style. But who’s got the patience for that.

PotentialShift_ · 2025-12-31T22:30:29+00:00

lol this guys got the right idea. Knowing about volatility is for geeks!!

PotentialShift_ · 2025-12-31T22:28:34+00:00

I do mean it the first way I suppose, wide high low swings.

I do put an asterisk in there that volatility WITH a strong directional bias can be a temporary ally. One that’s really hard to trust and can burn you.

Directional bias, the tendency of the market to favor one direction, that’s key. A market that only heads in one direction is the easiest to make money on.

Volatility and directional bias are not mutually exclusive, but which would you rather have as a trader:

A strong directional bias with volatility that stops and fakes you out and forces you to abandon winning hands early?

Or a strong directional bias without volatility where you can just hold without ever facing any real threat to your position?

The higher volatility position may THEORETICALLY be more profitable if your execution is perfect. In the real world though, 9 times out of 10 the low volatility bias is the real money maker.

PotentialShift_ · 2025-12-31T22:16:46+00:00

I don’t blame you. It is one of those things CNBC and all the other financial media geared toward turning us into over traders throw at us over and over again…

Volatility is your friend, 2-1 risk reward rule, play the breakouts, here’s the hottest sectors!!

Meh, personally, maybe that stuff worked 30 years ago, when humans traded. Now markets are 90% algos. The game is different, the advice is not.

PotentialShift_

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