No one wins every hand at the poker table

Based on several recent queries sent by email, I want to clear up any confusion about my win/loss record as a trader.  In case there was any question, I do not win every trade.  I would guess I get stopped out or exit (at a loss), on 1 out of every 3-4 trades.

No one wins every hand at the poker table, and not even the best players expect to.  Yet despite the losses, the winners always seem to end the game ahead.  The trick is to keep the losses small by getting out a bad trade before you give too much back.  You see, unlike in a game of poker, you can not “bluff” your way out of a loser in this business.
So, one must develop one’s own strategy for setting stop losses, and for recognizing when one is “wrong”.  Seeing support breaking down at a time when one expects support to hold usually offers an early warning to exit while losses are still minimal.

Fear and greed are our constant companions.  Sometimes they are our friend, but more often they are our foe.  We can never rid our selves of them and even if we could, that would likely be self-defeating in the end.  It is a very good thing to be afraid when we are about to do something foolish.  Meanwhile, it is a surefire means of guaranteeing our failure if we fail to act on signals we receive, because we are too afraid.  It’s a catch-22.

Greed is also our friend when it pushes us to enter trades and stay in them when they are going our way.  It is our foe when we stay in a trade too long. There comes a time when anyone with a half a clue can see that trade has gone on way too long, but we decide to stay in the trade “just in case”.  Or we have a trade that is going ok, but we see a different coin has done better so we exit our trade and buy the other coin just in time to buy the top.  It happens all the time.  (Greed is more often our foe than our friend, imho.)

In the end, we have to learn a ‘system’ that we trust, that has a proven track record, and trust it enough to take the trades it offers and get out when it suggests, even if it means taking a loss.  If our system is any good, the inevitable losses, even if they occur far more often than we would like, will be overshadowed by the gains we make from our wins.  And that is the way this business works, in my experience.