You just have to be right 25% of the time when trading

You just have to be right 25% of the time when trading

If you are in the process of learning to trade, will become a compilation of all those who have learned from. You will become its own unique type of merchant. We all came to the table with certain expectations and beliefs. We all have some emotional baggage. All we learn from reading, study sites, and other traders. Some informal, with some paying for education in the form of trading rooms, seminars and mentors. Every time you learn something, it adds to your experience as a trader. Eventually you become the sum of all you have learned. Even if you have a mentor you have tried to emulate, will never be like your mentor. You will be unique.

But while no two traders are identical, the most successful traders share some common characteristics. Most have learned the value of a trading plan. Most of them got a need for stops. It takes a very long time to understand the subject of this article. Need to be right.

The theme is simple. However, it will in many traders. It seems only obvious that if we want to be successful, we should be right in our basic assumptions. If you want to trade stocks, we need to focus on the 'right' direction reserves are going. True? Well, not really.

Most traders focus too much on their need to be right. This can be harmful and should be addressed. The truth of all, we are dealing with the stock market. There is no system, method or model that can produce accurate results all the time. If so, it will be known at all. Everyone will be using it. Ironically, if this was the case when everyone started to use the system, it could no longer work. "Catch 22" A of sorts, but just goes to show that it is obvious that there will never be a perfect system or indicator.

The best we can do is to study each situation, collecting evidence, and make a big decision probability of proper moment. What is of primary importance is how the situation is handled when the trader is right, how the situation is handled when the trader is wrong. What is the most common reason traders fail? The answer is not by stopping. What is another top reason traders fail? The answer is not letting the winners run.

Failure to end is an example of improperly dealing with a situation where the trader is wrong about trade. Not letting trade hit order is an example of improperly dealing with a situation where the trader is right for trade. What good are 'right' if you do not get paid for it? Good traders are assumed from the outset that the trade can go bust. They know how much money they have risks. They know when they get out, and they will analyze other options, such as profit from stocks, which now moves "against the odds.

Well, also, traders know how to balance the 'right' and be timely. I know of an advisory service, which took credit for predicting the fall of the Dow. The only problem is that I started this prediction, when the Dow hit the 6000th Quite a hollow victory. Waiting too much information can make it 'right' More and more, but to what avail? It is like the merchant that finally decided the NASDAQ will be higher intra-day, because I broke the high of the day. The only problem is that on NASDAQ rallied 30 points to go back to the rest of the day high, it is so widespread, there is no room left for profit. trader can be "right", but his late decision will award him money.

Yes, we should be "right" a fair amount when we trade. However, if your average winner is three times your average loser, you only need to be right 25% of the time to be breaking even gross. Accept that this is not an exact science and never will be. We're reading peoples emotions. Accept that it will be wrong a certain amount of time to accept that gracefully. Focus on how you handle your winner and loser. Make timely, likely making great when you have enough evidence, and did so consistently and objectively.




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