Interestingly enough, you see a lot of arrogant traders on internet trader forums. You know the kind "well, I can easily get 1000% per year...I can predict the market with exceptional accuracy...I am the greatest trader in the world..." Maybe these guys are really big winning traders. Maybe they are just delusional. Either way, the market punishes hubris over and over again. You can count on that.
Anyhow, you'll recall that I have determined that adding to winners with my contest system is a great way to juice the returns, at least from historical testing.
I think I am right in this assessment, but I like pointing out when I am wrong. It keeps me humble and grounded. Plus, I always realize who the boss is in this deal (the market, not me!).
Here is a trade I closed today. A $130 gain for one contract became a $450 loss by adding on (right at the peak!).
I'll remember this trade if, at year's end, I am 6% from winning - that's what this cost me.
By the way, I am going to stick to my plan - adding to winners. The unfavorable results of this one trade (or 2 or 5 or 10) mean nothing. Only the results of over 500 trades matter to me for this system.
Irregardless of you being humble, isn't this all just gambling?
ReplyDeleteThanks for the comment, Josh. Sure, trading is gambling. But, in my opinion, so is everything in life. Everything you do in life has an associated risk. The trick is to make it a long run winning gamble. In trading, that means coming up with a trading strategy that has a long term positive expectancy.
ReplyDeleteIf I thought I was on the "loser" end of the trading/gambling question, I would stop trading.