Isn't it amazing how many "winners" there are in the world of investing? All these people around you making gobs of money. It sort of makes you feel a bit insecure doesn't it? Well the truth is only about 10 percent of investors/traders make money long term and probably only an average of 5% actually make a large return annually. So why does everyone seem to be raking in the mullah so easily, time and time again? Well, what we have here is a culture of people/businesses who generally only advertise and share their profitable investments. They conceal their failures and embellish their successes. A great big bunch of people who do their best to look smart and successful instead of feeling shame or ridiculed.... and don't even get me started on the advertising from companies promising they have the holy grail on how to make you rich in record time. The vast majority of people/businesses are simply using ineffective methods that generally end up losing large amounts of money long term.
The truth is, if we all simply viewed the financial markets with the right eyes, we can start to accept the flow of it all and understand a few liberating truths about money, and much more importantly, good ol' mother nature.
Have you heard these before?...
When you give, you get back.
No one wins forever.
When you give you receive.
Two steps forward, one step backward.
What's yours today, will be someone else's tomorrow.
I could go on and on but the point is, there are "two sides to every coin"... the "ying and the yang". Alright I'll stop now. We know instinctively that there is a give and take with everything, polar opposites. This means every time you win, someone loses and when you lose, someone wins. You're not going to win all the time and you're not going to lose all of the time. If I told you that for every trade you make, without even knowing whether or not you will win or lose, you will average a profit of $200, I'm sure you would take every trade you could without hesitation. This is because you have complete confidence of the long term results. Even if you took five losses in a row, most would stick on the same path knowing that winners are right around the corner. That is actually the closest a person can get to executing the perfect trade method... taking trades with little to no emotion, doing the same thing over and over again.
Yesterday I had a losing day. Like I said, it's apart of the business of trading. It's the cost of doing business. It's what needs to happen, to give back parts of the profits you made previously, in order to make additional profit in the days or weeks to come. Markets are generally choppy, with spurts of quick, fast-paced price moves. Generally speaking, I have more losing days in a month than I do winning days. On occasion, I have made more money in one day, than I have after trading for half a month. Markets are completely irrational and erratic and yet there is a flow to them, kind of like white water rafting. Long term success means getting in the same flow of the market. When she says buy, you buy, and when she says sell, you sell. In relationship terms, you're going to be her "soul mate", or submissive spouse, depending on your view. In the end though, it pays off to be a good follower and it's how many traders eventually become rich.
These are the views of a trend follower. What I am and what I hope more will become. I've known some traders to be successful getting in and out of their trades, each day, and generally making money about 60-70 percent of the time. These people are in the minority and I question their long term results. Trend following, as I've personally found, is the truest and purest way to survive and prosper in any market condition, long term.
Next time you take a loss, simply say to yourself.... "NEXT!"
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