The free markets do not give up profits easily. The vast majority of all traders lose money over the long term. Many studies say it is as much as 90% that are net losers after all their trading. Even investors can work very hard to end up at even after a brutal bear markets takes back all their gains that sometimes took years to accumulate. I have been fortunate to be in the minority by both making and holding nice six figure wins over the years. What helped me do this? What does the market reward?

The markets reward what is most difficult to do.

Here is what is rewarded OVER THE LONG TERM. (Not every time but the odds are in your favor).

  1. Buying at breakouts. (It is not too high, it just overcame all the selling pressure, the odds are that it keeps going in the direction of the break out.)
  2. Shorting falling knives. (Fear has gripped the shareholders, what are the odds it falls farther? Very good.)
  3. Risking small amounts of capital in each trade. (The odds are you will never go broke, so you will be around long enough to win.)
  4. Doing your homework. (Fortune favors the prepared mind.)
  5. Cutting losses short. (If you keep your losses small you will not have any huge losses.)
  6. Letting winners run. (A few huge wins a year is all you need to make money.)
  7. Trading the market action not your opinions or predictions. (When you trade the chart action the odds are in your favor.)
  8. Going primarily long in a bull market. (This puts the odds on your side.)
  9. Going primarily short in a bear market. (Ditto)
  10. Trading a proven plan not a hopeful whim. (Winning traders are running a business, losing traders are playing in a casino.)

The markets reward the same things that businesses do, discipline, focus, following trends, leadership, risk management, planning, and putting the odds on your side.

Be a business person not a gambler in your trading.