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being right is not a recipe for a profit...

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being right is not a recipe for a profit...

in the beginning, most traders will be captivated by the "win loss" ratio...thinking...

 - "if i have a higher win rate than you then i am a better trader!"

we are taught, by our parents, by our teachers and even our peers that being the "best" is how you are rewarded with a better life. the truth, in trading so much of what is required to be a profitable trader is "contrary" to what we have learned. meaning so much of what we learned, before trading, will not serve us well, if our goal is to be a consistently profitable trader.

there are no ribbons, scout buttons or achievement awards that rewards you with more profits as a trader.

i've seen many traders come and go, and what i have learned is this, there's no way to achieve consistent profits while ignoring your loses. unfortunately, most do not like to talk about their loses or worse, they don't close the trade because that means they haven't loss.

it doesn't matter how great your "win rate" is, if your losses exceed your wins. even if you have a high "win rate" it doesn't mean you're right...think about this...

if you're "win rate" is 70%, 80% or more and your losses are still exceeding you wins...doesn't that mean something isn't working?


as a trader it's important to learn how to keep score in a way that makes you a "profitable trader" not a way that says "i'm right" trader.

in truth, a high rate is not as hard as one might think...the consistent profits is really the part that takes skill.



Fri, 10/26/2018 - 8:17pm

one additional thought...

"be a student first."


Thanks for these thoughts, another addition -

Analysis can be "right" but traded so poorly it can result in losses!


agreed, thanks pabergin