This single question seems to be at the heart of both success and failure as a trader. I'm curious as to what others use as their measuring rod for success. Is it accuracy, net ROI per trade, a positive MFE/MAE ratio, not getting stopped out, leaving a certain % of pips on the table in each position held, etc. etc., etc. How do you define it? When you look in the mirror in the morning and say to yourself: 'You know something, you are a successful trader," what does that mean exactly? Define: Successful Trader.
being true to oneself..... trading the plan honoring stops taking profits being a market participant.
Surprised this is a question. Even more surprised at the answers.. There is only one ultimate scorecard. The truth about your trading is reflected in that. Any other definition of 'success' is not good enough!!
Interesting question! My own personal definition of a successful trade can refer to either a winning trade or a losing trade. The actual amount I make or lose on a single trade is not as important to me as the following characteristics to determine whether I think the trade was a success: 1. Before opening the trade, I must have carefully considered both the technical and fundamental factors that could impact the price. 2. If the trade turned out to be a losing trade, then the loss was within my predefined risk parameters (usually less than 2% of my equity). 3. If the trade was a winning trade, the profit taken justified the risk that I took on the trade (at least double the amount I was willing to lose on the trade). 4. From beginning to end, I was able to stick with the trading plan I initially set out, because I had prepared for the possible scenarios that could play out while the trade was open and how to react to them. Jason
I am an automated trader, so my criteria for a successful trade is purely quantitative. Specifically, I am aiming to maximize this quantity: Success = (AverageTrade / StandardDeviation(All Trades)) * (probabilityOfWin - (1 - probabilityOfWin) / winLossRatio) * NetProfit * sqrt(AverageTradeDuration)
Get in when the conditions are favorable. Get out when the conditions are unfavorable. These conditions are all determined by each individual traders, there it will be different for everyone. It could be fundamentals for some, and technicals for others. When the trade is favorable, hold on for a long time, put it to BE stop if you can and walk away. And after all of the trades P/L are combined, you better be making money. Making money is the ultimate gauge of success, there are no moral victories.