Traders love to feel like they are a genius after a winning trade.
Unfortunately, you did not win because you were so clever, you won because the market let you. Trend traders are not geniuses when they are up 10% in a month when the market was down 10%. The market was simply conducive to their system. They trade in the direction of the overall trend so they simply make money when the market trends in either direction. Growth stock investors are not geniuses when they make huge returns in bull markets, the market environment gave them those returns. Swing traders make money when the market is range bound and bouncing off support and reversing on resistance. The market chooses who wins.
This is why successful hedge fund managers can have a huge losing year after so many winning years, the market is not conducive to their style. Traders do not have crystal balls they can only play the odds and probabilities. This is why John Paulson could be so right about the sub-prime mortgage short then have losing years. Jim Cramer looked like a master of the markets as he traded through the greatest bull markets in history and now struggles to make good calls with the new environment of slow growth and massive government interferrence.
In the end it is not you that win or lose it is your style, your system, and your trading plan. So it is crucial to choose one with the best odds of success.
