A Dozen Things I Learned From My Losing Trades

A Dozen Things I Learned From My Losing Trades

A Dozen Things I Learned From My Losing Trades

Image courtesy of 401kCalculator.org

  1. Good traders and good trading systems have losing streaks and that is just a fact of trading.

  2. Overbought and oversold can become more so, bull markets have no long term resistance and bear markets have no long term support.

  3. Sometimes losing streaks have nothing to do with how good a system is it is just the market environment at the time was not conducive to the system.

  4. Trend followers lose money when markets are range bound or choppy and swing traders lose money during trends and parabolic moves. That is just how it works.

  5. It is easiest to make money going with the flow of the market than to try to catch reversals at tops and bottoms.

  6. A personal bias can make a trader only see what they want to see and make them fight reality.

  7. When you are on the side as the majority it is time to stop and reflect on your trade.

  8. The first loss is the best loss, the hoping and the praying usually starts as you find yourself on the wrong side of a trend and the losses get bigger and bigger. Just get out ans start over when the loss is small and you have been proven wrong.

  9. Trading is a long term proposition of compounding capital it is a lot of work.

  10. Trade small and cut losses fast and your trading capital will always be safe.

  11. Limit your draw down to help your account profitable. It is very difficult to trade your way out of a hole.

  12. Only trade in those market that you have carefully studied and back tested and have signals with an edge.