So many novices thing (myself included) if I knew and mastered the technique of trading, we can be profitable. So just sit down, learn the best technique in the world, mastered it, and make profit. That's what every education trading site or workshop give their 'secret' and you go on your own. Is it....?
That's only of one third true. Just knowing is not enough to win in this market. It's like learning how to drive from a manual guide or text book. Can you drive after that? Sure you can, but chances to not having accident are very slim. And then you go to simulation driving and mastered it? Can you drive after that? Sure but still there's high chance to crash. Then you got to drive real car at the trainign circuit and passed? Can you drive at the real road? Sure, but again accidentrs rate still high.
Then what's trading look like? I'd like to make some analogue here, trading is like racing, competing with other professional drivers and newbies. The road is still mistery, it may rocky, smooth, or it's dirt, wet, slippy. And worse, your sight range is limited because of fog. The road may change from smooth to wet, then smooth again, rocky. How hard is it driving like that? Fortunately, you still win even you're not top three, if you touch the finish line, at least the top half. The other half may blowout his car, crushed, and never cross the finish line. If you finish last, you still lose. So the key here is driving carefully but still with hi-speed. You took the prize from betting money the other losing half.
Too much brake may slow you down (too tight stop losses). No brake is suicide (No Stop Loss). Stop your car after nearly have an accident may save you, but make money is impossible (Stop trading after stopped out). Reducing the speed after leading means losing the position(Taking Profit Too Early). Bumpy road need different technique from smooth road.
Trading is need mental preparation, open mind, accepting the worst, and thinking two steps ahead. Before entering the trade, you should think: What should I do if it doesn't work out?
Well said de'trader. If it doesn't work out, I guess we can keep trying until we find a perfect setup and we are disciplined or emotionless traders. If we have to, we must lose with the confidence that we are going to recover the loss soon and ensure ourselves that it really doesn't matter. :)
ReplyDeleteHi FFXD,
ReplyDeleteSadly there's no perfect setup, but there's great setup. But I'll tell u one secret, bad performance not just coming from losing trades, but also missing the winning trades. That's what happened to me.