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Mindset Sharing by Dan Cheung

Trading Guideline 2026​

1. The Core Philosophy: "Everything You've Learned is Wrong"​

The speaker, Dan Cheung, uses a provocative statement—"everything I've taught you is wrong"—to stress that once a trader masters the basics, they must move to the advanced level of optimisation and adaptation.

  • Funded Account is the Start: Getting funded by a prop firm is not the end goal; it is the starting point for the consistent work of making profitable payouts.
  • Three Steps to Profitability (The Basics):
    1. Learn a solid strategy.
    2. Understand psychology and risk management.
    3. Consistently implement profitable actions (The focus of this advanced series).

2. The Advanced Pillar: Constant Adjustment and Adaptation​

The key mistake traders make is failing to adapt their successful strategies to the evolving market.

  • Optimisation over Consistency: After establishing guidelines (e.g., 1:2 Risk/Reward or one trade a day), the advanced task is to test and optimise:
  • Could changing your R/R from 1:2 to 1:3 win you more trades and money?
  • What are the specific "tells" that signal when to run a trade longer (e.g., past 2R)?
  • Adapt to Market Conditions: Traders must "spot the difference" in market behavior. For example, when market conditions shifted, requiring bigger pullbacks (like in Gold), the speaker adjusted his plan on Tuesday and Wednesday to capitalise on bigger trades, then readjusts once the market corrects.
  • Market Maturity: What works one year (e.g., always hitting 2R) may not work the next. A mechanical system must constantly be adjusted and adapted to improve the trader's edge.

3. The Psychology of Certainty vs. Uncertainty​

Trading's addictive nature stems from the tension between two human drives.

  • Certainty: The need for certainty is what makes people re-watch movies or revisit favourite restaurants—they know the outcome will be satisfying. In trading, certainty is knowing that the strategy can make money over a period of time.
  • Uncertainty: The draw of the unknown—new experiences, new destinations, and the uncertain outcome of a specific trade.
  • Adaptation is Key: Since both certainty and uncertainty exist, the trader must constantly adapt to the markets because they cannot control the outcome of every trade.

4. The Path to Profitability (The Final Caveat)​

The path to breaking into profitability is an accumulation of all the basic steps, not a single lucky spike.

  • Accumulation over a Spike: A trader may learn a strategy, but they still need to put in live testing, fail, journal mistakes (like overtrading), and constantly try to break the ceiling.
  • The Goal is to Stay Above the Line: Once a trader is above the line of profitability, they must continue to learn and improve to stay above that line.
  • Focus on the Goal: The goal is not to be "right in the markets" or a "top dog," but simply to replace and exceed your income and make enough money for your family.

7 Mental Habits/Rules for Trading Success​

1. Accept Trading is Contradictory (Accept Losses)​

  • Trading is unique because you can execute an A+ setup and still lose money.
  • The hardest part is accepting when a trade hits your stop loss only to immediately reverse and hit your take profit.
  • Failing to accept this leads to destructive behaviour like re-entering, overtrading, and revenge trading, which causes you to blame a strategy that isn't flawed.
  • Understanding this helps you become more "stoic" and accept the outcomes, which is key to compounding your edge over time.

2. Be Careful What You Consume (Avoid Information Overload)​

  • Too much information online leads to "analysis paralysis" and makes it hard to know who to trust.
  • Comparing your success to others (e.g., making $1,000 while someone else makes $100,000 on the same trade) leads to envy, over-leveraging, and emotionally based gambling.
  • The solution is to pick one mentor and one strategy and stick with them, dedicating yourself to that "one thing".

3. Have Only One Strategy (Commitment Over Variety)​

  • "Strategy hopping" prevents a trader from fully committing to a strategy and making it work .
  • He uses the example of a successful trader who focused only on one core teaching (ICT) without mixing in other concepts like Wyckoff or Fibonacci.
  • Success comes from specializing in one area, as Napoleon Hill would suggest, by fully committing to one strategy and saying, "I'm going to make it work no matter what".

4 . Size Down on Your Trading (Manage Emotion)​

  • Sizing down actually makes trading more manageable, consistent, and less emotional.
  • Trading a $50,000 account (risking $250 for a $500 gain) is simpler because the amounts don't affect you emotionally, especially compared to risking thousands on larger accounts.
  • The focus should be on compounding the underlying skill; the money will follow.

5. Feed the Right Side of Your Brain (Positive Psychology)​

  • Trading can be a lonely game, and it's easy to spiral negatively ("My strategy is not working").
  • You can choose to spiral either negatively or positively in any situation.
  • It is imperative to understand your psychology and deliberately feed the positive side to enable yourself to take necessary action in your trading.

6. Focus on Percentages, Not Money (Scalability)​

  • The goal isn't making a specific dollar amount; it's about the percentages and understanding that scalability comes with time.
  • Trying to make $1,000 on a $1,000 account (100% gain) is incredibly risky and unsustainable compared to making $1,000 on a $100,000 account (1% gain).
  • Focusing on making a consistent percentage (e.g., 10% every quarter) shows your skill and makes it easy to scale up later with prop firms or investor capital.

7. Journaling (The Key to Self-Improvement)​

  • Journaling is the most powerful tool, and every successful trader he has met (six to nine figures) shares this trait.
  • You can't manage what you don't measure .
  • Journaling is the key to "you versus you" and unlocking the next version of yourself by identifying mistakes and emotional behaviours you can't see on your own.
  • The brain is designed to think and feel, not to store information, which is why writing things down is necessary for comparison and improvement.

Getting out of Drawdown in Trading​

I. The Core Strategy: Securing Profits​

The method revolves around a mechanical trading approach (using hard, predefined rules) to eliminate emotional decision-making.

The 1:2R Profit-Taking Rule​

The speaker's hard rule is based on risk-to-reward (R):

  1. Threshold: At any given time, if a trade hits 1:2R (meaning the profit is double the initial risk), the trader must take action.
  2. Action 1: Secure Partial Profits: Always secure a minimum of 50% of the trade's position.
  3. Action 2: Move to Break-Even: By securing 50% at 2R, the entire trade immediately becomes risk-free. If the remaining 50% position reverses and hits the initial stop-loss, the overall trade is still at break-even (or better, up 1R from the secured profit).
Limiting Wins (The 1:4R Cap)​

While counterintuitive, the speaker advises never letting a trade run more than 1:4R

  • Prevents Unrealistic Expectations: Hitting a massive 10R trade can set unrealistic expectations for the next trade, causing a trader to mess with their habits and seek out non-existent high-return trades.
  • Consistency is Key: Consistently securing 1R to 4R is sufficient, especially as account size grows, where a 1R return can quickly become $1,000, $10,000, or more.

II. Benefits of Securing Profits​

  • Risk-Free Trading: Once partial profits are taken, the psychological pressure of the trade is gone, which aids in avoiding emotional decisions.
  • Helps in Drawdown: This method helped the speaker recover from a 9.95% drawdown on a $200k challenge, stabilising the account and putting it back into the green zone.
  • Mental Peace: Securing small, consistent profits provides peace of mind and reduces the psychological trauma associated with drawdowns or losing streaks.
  • Prevents Bad Habits: Having hard rules helps stop overtrading and revenge trading.

Key Psychological Obstacles in Trading​

The speaker identifies two primary "dark truths" that traders must overcome:

**1. Solitude and Sacrifice​

The vision for success in trading often requires massive sacrifices that lead to isolation:

  • The Early Grind: The speaker recalls spending 16 hours a day dedicated to trading with no immediate guidance or community, often losing money in the process.
  • The Trade-Offs: Achieving the vision requires delayed gratification and constantly sacrificing social life (e.g., saying no to Friday night outings to study or back-test).
  • Shrinking Circle: This sacrifice results in losing friends and seeing your social circle shrink dramatically, as family and a small, trusted team become the only priority.

**2. The Unseen Vision​

Traders must push forward based on a vision of future success that no one else can see or believe in:

  • Internal Doubt: The hardest part of the journey is trying to execute this vision when no one else can see it, leading to self-doubt, where the trader's faith is truly tested.
  • Faith and Persistence: The speaker recommends having faith in the vision, believing that if you can see it clearly (e.g., taking your mom on holiday using a business card, it is written for you and will eventually become a reality.

Final Actionable Advice​

To overcome these psychological challenges and achieve success, the speaker provides a final call to action:

  • Money as an Enhancer: Money doesn't change who you are; it only enhances it. If you are kind, you will have more resources to be kind with. If you are not, you will only have more money to be horrible with.
  • Practice in Private: You must be rewarded based on what you practice in private. This means consistently going to the gym, journaling, praying, learning from content, and taking massive action to compound habitually into the person you want to become.
  • Never Give Up: The only traders who truly fail are the ones who give up. If you never give up, you have your whole life to make your dream a reality.

Dan's Struggling in 2024?​

Overview of the Struggle​

The creator shares that he is going through a difficult time ("I am struggling"), which he clarifies is not related to family issues but a combination of overwhelming business and financial problems, causing him to get into a "rut" or "slump".

The problems include:

  • A tenant owing over £10,000.
  • £20,000 being locked up with issues in retrieving it.
  • Solicitor problems and business deals being stuck.
  • Juggling an expedited move to Dubai.
  • Issues with a prop firm (True Forex Funds).
  • Increased pressure from work, juggling content creation, a coaching program, real estate, new business proposals, and four other investments.

Key Message and Solutions​

The main message of the video is that "it's okay not to be okay" and that struggling is a part of life, but it's important to take accountability. The creator provides a three-part framework to get out of a slump:

  1. Choice
    • The first step is to make a choice to get out of the rut.
    • You can choose to spiral into "the lack" (the problems) or "the abundance" (the gratitude).
    • The speaker demonstrates this by quickly listing things he is grateful for, such as his family, good income (six figures in January), and his growing YouTube following (nearly 20K subscribers).
    • He emphasises the "three C's": Make a Choice to create a Chance to make a Change
  2. Peak State
    • He references Tony Robbins' teaching that Peak State is the number one thing to focus on.
    • Peak State is having the best attitude with high performance, achieved through a "priming effect" of gratitude and excitement.
    • Being in a good state helps you tackle problems with energy (e.g., "cool, let's go").
    • In trading, a bad state leads to poor decisions like revenge trading, illustrating the importance of mindset.
  3. Attitude
    • Your attitude towards anything is everything.
    • He challenges the mindset of being a victim, entitled, or making excuses, which is common in the Western world.
    • The ultimate point is that you are 100% in control of your life, and a lack of accountability prevents growth. The video concludes with the rallying cry: "You versus you and me versus me", reminding the viewer that they are the person in control of their life and able to make a change.

Dan's Journey of 4 Years of Failure​

Year 1: Discovery and Learning​

  • Phase: Best time in trading—new, exciting, and making small money.
  • Focus: Learning market fundamentals, how and why they move, and making a lot of mistakes.
  • Outcome: Lost the initial small trading capital (£500), but viewed it as a necessary cost for self-education, or buying a "course" for himself.

Years 2 & 3: The Hardest Years (Stagnation)​

  • Phase: The roughest period, characterised by knowing the strategy should work (seeing his mentor succeed), but being unable to make it work personally.
  • The Problem (Small Accounts): Trading with a small personal account (e.g., £500) creates the pressure to turn it into a salary or a living, which is unsustainable and ruins expectations.
  • The Mistakes: Overconfidence after a few months of small gains, leading to over-risking and trying to "flip" the account for substantial figures (e.g., turning £2,000 into £20,000) . The worst mistake was growing an account for three months, only to blow it all in one day.

Tips for this Phase​

The speaker suggests accelerating past this phase by:

  1. Journaling: Journaling on pen and paper, maintaining a daily report card, a to-do list, and a playbook
  2. Using Prop Firms: Prop firms provide strict rules (drawdown limits) and severe consequences for breaking them (losing the fee), which forces a trader to take risk management seriously—rules absent in a personal account.

Year 4: The Revelation (Profitable)​

  • Phase: Breakthrough moment and a focus on the Compound Effect.
  • The "Aha" Click: The idea that if he could consistently make just £5 or $5 a day, even if it took one win and two losses in a session, it would be enough over the long run.
  • The Result: Consistently applying this strategy led to growth over the first three months. Over the entire year, the speaker had 10 winning months and only two losing months, but was net up overall.

Final Message​

Profitability is not about being profitable today or this week; it's about being profitable in your career and over the long run. The struggle is part of the process that builds the required skill set for long-term success.