Don't Be A Cry Baby

I'm going to touch briefly on the "elephant in the room". Yes people, I understand that it hurts and it's frustrating to lose money, especially when confidence is high. Just as your trade starts to move in the desired direction something unthinkable happens; the darn thing reverses and hits your stop and you're left thinking... "why me?" or "what happened?" or even "this method doesn't work and I've got to change it." It's true that every time you make money at any specific time, another trader is losing money ...and vice versa. Trading is simply a game, it's a competition. You are competing against other people. Like I said, when you win, someone loses. No one wins all the time and no one loses all the time (although it feels like the losses never end at times). The name of the game is making more than you lose. Everyone knows this intellectually but we humans tend to get emotional at times and that's when we typically fail in the game of the financial markets. You need to get it out of your head that you have to win all the time or that losses are bad. It's just apart of the game. Michael Jordan, arguably the greatest basketball player of all time, had a career shooting percentage of 49.7%. Sure we can round up but he barely missed more shots than he made and look what he was able to to accomplish in his career. Babe Ruth finished his career with a batting average of .342. Meaning for every hit he had, he struck out two times. Hell, in baseball, a batter has multiple chances to hit the ball, and if he/she fouls the ball on the third try, they can stay alive and keep fouling the ball until he/she makes a hit and sometimes, that hit wins the entire game. Imagine if these athletes simply gave up because they missed the mark. Imagine how different their lives would have been. In every game in the world, no one wins all the time and we know this. Money tends to complicate things but if you play to simply take more from the market than you give back, you can really change your life.

Stay calm, relax when you lose. Have a method that reduces those losses and lets you know when you're wrong. None of us have a crystal ball and no one can tell the future. Just do your best to minimize your losses and maximize your gains. I'll close with this... I've had many losing weeks and once I had a losing month, but it's not about that. If you're looking to make the same income from month to month in trading, don't be a trader and go to work for someone instead. At the end of the day I've made money and I will continue to do so when looking at my wins and compare them to my losses. The market can take away all of my profits in one month to where I'm taking a slight dip in my capital, and then literally in the first three or four days of the following month, double my entire account. The market moves in phases kind of like seasons. Just keep at it and be patient. When trend following, it's not so much about the number of wins vs losers. It's all about the value of those losses vs the value of the winners over the long term. If you're losses amount to $50,000 and your winners amount to $70,000, things aren't so bad. It's just hard to "feel" good when you're in the thick of things.