As traders, we must understand that there will be losing trades for every
xx trades made. The irony is most traders cannot accept this fact!
They
are not at all tolerant of losses, which keeps them searching for strategy
after strategy. To be honest, it will be easier to trade if you can accept
the fact that losses in trading are inevitable. Because of this known
possibility, you are less likely to overtrade and will be in better control
of your fear and greed.
On this topic, it brings me to discuss stewardship and ownership with
you. Between fund managers and retail traders, who do you think will
do better? All my bets go to the fund managers. This is because the
fund manager’s role is to keep his job by trading strictly by the rules of
the trading firm. A fund manager, in this case, is a steward.
SECRETS TO SUCCESSFUL TRADING
On the other hand, most retail traders feel that they are the bosses of
their money. They want very much to control all decisions and, worst
of all, outcomes. It will be hard for them to cut loss as it is a sign that
they are wrong. They feel that losing their hard-earned money is out
of the question. This makes following rules extremely challenging for
them and breaking their own rules is the best choice.
When the market is bad, retail traders refrain from trading as they are
fearful. They fear losing their money. On the other hand, fund managers
continue trading according to rules, as that is their job. To be successful
and profitable in trading, we must change our mindset and values.
We are not the owner but stewards of money. How well you manage
this money will greatly determine your trading results. Be a steward of
money and focus on trading well instead of focusing on the dollars and
cents. I reckon a change in values is like a paradigm shift. Traders who
changed their values to the right direction are less likely to break their
trading rules and will ultimately gain success in trading.
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