Learning Trading Success Through Failure
It is commonly know that we learn more from our failures than from our successes. Yesterday I several one of my hourly trading consulting with various traders. What came up was learning from failure as well as keeping a trading journal. The concept of the trading journal is go back and see exactly why he took a specific trade, what worked and what did not in order to be able to be more profitable in the future. The path to success is through certain failures and mistakes as long as we learn from them.
Learning from mistake provides us feedback. The difference between successful traders and non successful traders is that they learn from their mistakes and make changes and go on. Many super traders have experienced crushing loss in their early trading years. All of them picked themselves up, made adjustments, and with the sure belief that they could make it back through better trading, did just that. Failure is often a necessary stepping stone to success.
The market wizards book are full of traders that blew up only to become successful traders. They learned to be successful traders through the realizations that they can not avoid losses and to park their ego. They learned to think in terms of the next 1,000 trades that any one trade does not mean anything. They learned to keep their losses small and let their profits ride. This is the main tenant of trend following. It is such a simple statement…yet so many traders can not do this simple task of trend following…Fear… Greed..lack of trading plan…etc..
Traders who fears losses or drawdowns will either stop trading or change methods or systems only to experience the next drawdown. There is no way to avoid losses. If you want to improve your trading and need assistance with trading system development…trading psychology…money management…Lets have a conversation…I trade for a living and been trading since 1994. It is a marathon. It is never easy…It takes persistence…courage and determination to succeed in trading.