Obviously I'd prefer a profitable trade rather than a losing trade, but my comfort and confidence comes from the philosophy of my trading style and how consistently I apply it. To put it simply, I focus on making what I think are good trades, and trust that results will follow.
I think Redneck hit upon the progression a trader goes through. It is the same with any business. In any business your thrilled with the first sale (profit) and you post your first dollar bill (or what ever denomination) in a frame on the wall or under the counter with great joy. Then the repetition starts; the thrill of making the dollar bill wears off as expenses (losses) seen to be eating up income (profits). But things stabilize and eventually you just try to keep the business running. At that point in your business, income (profits) and expense (losses) do not move you to emotion either way. Having done both they are very similar.
Trading is "easier" after that first (or big) big $$ winning trade http://www.amazon.com/dp/0307395774/?tag=yahhyd-20&hvadid=49101236511&ref=pd_sl_47w73oy0yw_e http://www.businesspundit.com/t-boone-pickens-loses-2-billion/
Here's the thing. Do you have an edge? Are you completely sure (at least as completely as possible) that you have an edge? That's the first and most important step in trading, or gambling, or in life for that matter. Secondly, do you have a sufficient bankroll to be able to apply your edge? By apply, I mean the ability to continually expose your self to risk in an attempt to "work" your edge and weeather the normal statistical deviations inherent to your method. I have been a floor trader and also I used to play Limit Hold'em professionally. As a Holdem player I looked for the proverbial 1 bet an hour, and had to become comfortable with the swings involved with earning that bet. I had to also continuosly monitor both my game, mental state, and quality of compettition. There are easier ways to make a living. Unfortunately, trading isn't one of them. As a floor trader and now swing trader, I need to constantly reevaluate my method during changing market conditions. I am constantly determing levels, watching the market react to those levels, while trying to hold my emotions in check. Of course wins take take the pressure off, but they really shouldn't. It is all about confidence, objectivity, and developing a method that really does have that elusive edge. I ask you, if someone said they would flip coins against you and pay you two to one if you guessed correctly, would you ever be nervous? Of course not, you would absolutely "know" that you are going to eventually get the money. That is of course assuming that you had a bankroll large enough to withstand the natural swings of the game. That is the "Holy Grail" of any speculative endeavor. Guys who trade mechanical systems are able to sleep a little better than us discretionary types, because the believe they have a proven method of extracting edge. To ask that kind of trader if losing the first 2-1 coin flip would make him feel bad is laughable. Shit, maybe I should write a system so all my wins and losses seem less personal!
Now is Now & Rabbitone Thank You kindly Interesting â as I read through the replys - weâre all basically saying the same thing â just in a different way (which figures) btw - setups = edges to me Increasenow, You have the answer (that was the easy part) â now for the hard part How you going to get there/ (here) - Itâs rhetorical so no need to respond directly Good Luck on your Journey Sir Redneck
Thanks for the compliment jem, but I don't really know if "I know". That's the rub. His question, although laughable to many, strikes at the core of the psychological aspects of trading. Let's spin a scenario all discretinary traders (and I suspect many system traders as well) have been through. You are trading for a living, you just paid some bills or blew some cash on nonsense. Maybe you are trading just a smidgen too big for your account. That trusty pattern recogintion method you have used to milk the market for food, housing, cars, sharp clothes, hookers and blow, has just been stopped out three times in a row. No biggie, that's within expectation, I am pro, no problem, work the edge brother. 4, 5,6 stop outs. Fuck this is a bad day, being the pro that I am going to pull a one day "stop equity loss" move and hit the links. Tommorow, book a winner, then 2...3...4 losers. Do I suck, have I been just lucky. Well I have all this data showing positive expectation for the last 12 years.......... But so what, maybe I have been an outlier............Technical Analysis is bunk anyway maybe........ I went to Northwestern University, if I tried to explain pattern recognition to my proffs, they would look at me patronizingly and sigh........... What if the market has fundamentally changed? What am I going to do? Have I just been lucky? Is it over? I trade, therefor I am. If I cease to trade do I cease to exist? And the sick thing is I am an experienced professional with years of ups and downs under my belt. I consider myself stable and have sent a kid through private college, make six figs, by battling this thing. It is hard, really hard. Increasenow has no idea, and it's a shame, because he is not ready for this shit. FJMcC