Rookies Stuff 03

One of the basic problems for traders everywhere is the notion that any time that you lose money, you must have made a mistake. If you make a trade that should be profitable 90% of the time, then it must be true that the same trade will be unprofitable 10% of the time. Yet, when one of those occasional losses occurs, the trader is sure that he/she did something wrong.

We trade in a statistical world. The odds-on favorite wins most of the time. But not every time. Thus, if you cannot discover a true mistake — if you cannot find something that the evidence told you not to do but you did it anyway — then the chances are good that you were unlucky this time, and that you made no mistakes.

Here is a bit of my trade philosophy that I believe would benefit any trader who adopts it:

When the time comes to make a decision, examine the evidence and make the best decision that you are capable of making. If it does not turn out to be the winning decision, that’s okay. If you consistently make good decisions, you will be a successful trader.

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