I'm A Great Loser
I'm A Great Loser because to become successful as a trader, I must put myself into situations that will bring pain, suffering, and loss. I simply will never make money as a trader if I don’t understand the importance of losing properly in the market.
Last week, I recommended two set-ups:
NOTE: Price ended up breaching my demand zones.
NOTE: Price ended up breaching my demand zone.
The best traders are only right 35% - 60%. They minimize risk because they realize no matter how good a trade or investment looks, they can always be wrong and if they are absolutely wrong, they cannot, under no circumstances, risk blowing up and losing their account and be taken out of the game.
No matter the size of my painful loss, I take comfort in knowing I’m still in the game and can live to trade another day. The point is that when I lose, I cut my losses quickly to minimize the costs and I move on. When I have a winner, I let it run. It works out to be a net positive as the winners more than compensate for the losers.
Over the last several years of trading, one piece of advice to focus on is the process. If you have an edge over the Market, the profits will follow. Stay focused, be proactive and look ahead so that you are able to approach the next trade in an unbiased manner.
To manage your expectations of a trade, you simply have to understand that any one trade can be a loser and that you never can know ‘for sure’ which execution of your trading edge will be a winner and which will be a loser.
You have to shift from expecting to win every trade, to remembering that you won’t win every trade no matter what and you don’t know which ones you will win and which ones you will lose, so you must take every trade that meets your set-up within your trading plan.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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Well said, that's pretty much what I preach to everyone. Trading is just managing probabilities, finding an edge and exploiting it over time.
You summarized the post in 1 sentence very well..you comment is much appreciated.
Your post is appreciated, it's only real traders who admit they make mistakes, and not even mistakes at that, just accepting that losses are a natural part of the process.
It's what separates the fantasists from the people that can actually succeed, so kudos to you for your honesty.
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