This thread is all about losing and I hope what I and other traders write here will help some people learn to embrace losing and reach their goal of being consistently profitable, that much sooner. You need 11 vouches to post here, until then, please absorb and learn.
Forums and web sites across the Internet are all focused on winning in trading. Whilst we all seek ultimately to be profitable, embedded in the process of reaching those net profits, are losses.
The inexperienced poke fun at those who lose a trade and the losing trader reports their losing trade as a great failure on their part. Self-proclaimed trading gurus will only speak about how they are right and look for opportunities to tell other traders how 'they are wrong'.
In his book “Technical Analysis of the Financial Markets”, John Murphy explains that professional traders on average, lose about 60% of their trades. So they win just 40% and yet are profitable. These win/loss figures will of course differ dramatically for every trader and the edges they trade with. So why do so many unprofitable traders expect to produce so much better results than the worlds' best traders who make a fortune?
Many people who are in the early stages of their trading careers are hell-bent on ‘being right’ as opposed to being consistently profitable. Advice from more seasoned traders about accepting losses is often ignored as the newcomer 'thinks they know better'. They search in vain for ‘The System’ that will help them win all their trades and quickly abandon any edge they try that encounters a string of losses. “I lost 3 trades in a row trading like that – it’s a useless system” are typical rookie remarks that I used to make myself.
Traders must learn to embrace their losses as a part of their business and not as a personal failure. We must accept that we will often be proven wrong by the market. I win and lose trades all the time but the important thing for me is the net profit. Again, the same principle applies in every business and trading MUST be approached as a business. How many sales professionals convert 100% of prospects into clients?
When I 'catch myself' trying to be right, and perhaps deviating from my trading plan, I have a good talk with myself and get myself back on track.
The are 1000s of edges that can make a trader profitable on all time frames, if they trade well. But EVERY one of those edges involves taking responsible losses and treating those losses as an integral and normal part of a trading business.
Unfortunately, few traders are aware of the above when they start out and find it very difficult to truly accept being wrong and losing. So like I and so many others have, they travel the grueling journey of learning the hard way.
Too many people are trading to be right, instead of trading to be profitable.
Stop trying so hard to be right and clever with analysis.
Stop trying to prove to others how you 'knew' where price was going.
Only then can any struggle you are experiencing, be allowed to diminish.
Rob
Forums and web sites across the Internet are all focused on winning in trading. Whilst we all seek ultimately to be profitable, embedded in the process of reaching those net profits, are losses.
The inexperienced poke fun at those who lose a trade and the losing trader reports their losing trade as a great failure on their part. Self-proclaimed trading gurus will only speak about how they are right and look for opportunities to tell other traders how 'they are wrong'.
In his book “Technical Analysis of the Financial Markets”, John Murphy explains that professional traders on average, lose about 60% of their trades. So they win just 40% and yet are profitable. These win/loss figures will of course differ dramatically for every trader and the edges they trade with. So why do so many unprofitable traders expect to produce so much better results than the worlds' best traders who make a fortune?
Many people who are in the early stages of their trading careers are hell-bent on ‘being right’ as opposed to being consistently profitable. Advice from more seasoned traders about accepting losses is often ignored as the newcomer 'thinks they know better'. They search in vain for ‘The System’ that will help them win all their trades and quickly abandon any edge they try that encounters a string of losses. “I lost 3 trades in a row trading like that – it’s a useless system” are typical rookie remarks that I used to make myself.
Traders must learn to embrace their losses as a part of their business and not as a personal failure. We must accept that we will often be proven wrong by the market. I win and lose trades all the time but the important thing for me is the net profit. Again, the same principle applies in every business and trading MUST be approached as a business. How many sales professionals convert 100% of prospects into clients?
When I 'catch myself' trying to be right, and perhaps deviating from my trading plan, I have a good talk with myself and get myself back on track.
The are 1000s of edges that can make a trader profitable on all time frames, if they trade well. But EVERY one of those edges involves taking responsible losses and treating those losses as an integral and normal part of a trading business.
Unfortunately, few traders are aware of the above when they start out and find it very difficult to truly accept being wrong and losing. So like I and so many others have, they travel the grueling journey of learning the hard way.
Too many people are trading to be right, instead of trading to be profitable.
Stop trying so hard to be right and clever with analysis.
Stop trying to prove to others how you 'knew' where price was going.
Only then can any struggle you are experiencing, be allowed to diminish.
Rob