Have you ever felt that the market was out to get you? You had a winning position. The stock was acting just as you had predicted. Then suddenly the position turned to crap when the stock price experienced a large gap at the opening. The good profit disappeared and you were the proud owner of a losing trade.
Did you take that personally? I suspect you already know better than to blame the market. We are involved in a big probability game.
Tyler offers a simple explanation of why you should not blame the market (Tyler’s Trading).
The financial market is no respecter of persons. Each trader rises or falls based on merit and merit alone…
After getting hosed a few times or treated unfairly by Mr. Market I too am tempted to bellow, “Hey! Do you know who I am?” But, alas, such an exclamation falls on deaf ears. No, the market doesn’t know, nor does it care who I am. It doesn’t care about the size of my bank account, my voluminous library of trading books, the time and effort I’ve put forth or years of experience. My shins will get kicked in just as swiftly as the next guy. The market doesn’t care about my family name, my background, my connections, or my social status. It simply provides a playing field which rewards or punishes based on skill.
I’m just one of millions of nameless, faceless traders.
It’s our job to manage risk. Sometimes we are going to be unprepared for the unlikely event. However, as a risk manager, if we take care of our trader persona and monitor position size carefully, then out trader persona will be spared the agony of blowing up a trading account.