Successful trading is not just about wining big. Successful trading is MORE about having the ability to win consistently than anything else. The successful trader wants to know that he CAN repeat that action and thought process that brought about that winning trade.
Trader A is frustrated with his system. He just lost 5 trades in a row. Not an especially bad streak but he is feeling helpless and his self talk is casting doubts on his system that has brought him considerable success over the past few months. After being stopped out again, he is eagerly looking for a way to recoup his losses. Any way at all. As he stares at the ticking charts, he has this feeling that the market is turning. No clear signal, it is just a gut feel. He rationalizes it with some excuses for this trade and sends the order. Order filled, market turned. It just happened at that instance earnings reports were announced and that pushed the market his way. He recoups all his losses plus some profit to keep.
Trader B just had 2 losing trades yesterday.
“Today is a new day and it will all be good!” He assured himself.
Market opens, and after an hour, he took another hit. He is now having doubts about his system and stares intently at the charts, chasing every tick of the price movement. He has the urge to take a gamble and take a trade based on gut feel. Just before he clicks, he stops himself and he is relieved he did not commit the sin of taking random untested trades.
Few minutes passed and a trading signal appeared. Without hesitation, he clicks and sends the order to go long. Next thing he knows, his laptop beeped and he was stopped out again.
Trader A won but he wasn’t happy. He knew he cannot duplicate this winning and it was all due to luck. On top of that, he broke his rules and allowed his emotions to rule his trading.
Trader B lost but he was pleased that he traded well. He knows that the key to be a successful trader is to be able to face his fear and take the right actions. He did what he was supposed to and he stopped himself from making a key mistake. He knows the system had been tested vigorously and it had worked very well for the past one year. He knows that the law of numbers will kick in and he will get his winning trades very soon. He knows he has probability on his side.
A successful trader is not bothered by a temporary dip in his account. He is not affected by a couple of losses. The good trader’s main objective is to do what is right when a trade comes and let his system works for him. His comfort comes from the trust he built as he saw with his own eyes how the system had served him. He knows he can repeat his winners and not leave anything to luck.