Thread: A Traders Philosophy: Finding Success in Losing Trades

Everybody enjoys the sometimes profitable commerce. Some people enjoy it so much, that we really look forward--towards just winning. We feel that our success as a trader is pending on every transactions result. That is, if we do not have a good trade, we believe ourselves a lousy trader: unsuccessful. But I challenge those who feel this way to discover success in losing transactions. It may be achieved, and it must be carried out.

Some of you may be asking yourselves what finding success in losing transactions means. It only means that a losing trade is not necessarily a bad thing, it could be turned into a positive; especially a learning experience. And every veteran will tell you that experience is essential. But what if there was a way to accelerate the procedure for gaining experience. What if we could cut through all of the nonsense and begin trading with increased achievement. There is a way, also it's extremely simple. We simply need to learn from our errors (our losing trades). If we're willing to learn from our errors, or our poor trades, we should hopefully not make the exact same mistake again.

Einstein once said there are only two things infinite: the universe, and human stupidity. Having quoted the genius, it's absolutely mathematically feasible that there's a finite number of mistakes a trader can create. Similarly, there's a limited number of bad moves, or errors, a chess player can mathematically create by moving the pieces on the game board. A trader also has a limited number of mistakes which he/she can create, and by all means, the number is not infinite. Knowing this truth, a trader can then begin to remove these errors as they occur. Every mistake a trader makes, must be corrected, along with the trader must make sure that the exact same mistake does not occur.

After a while, and after enough errors are made, a trader may start to see achievement. This is only accurate if a trader has truly learned from his mistakeshas gained expertise --wisdom.
#12288;
Insanity: doing the exact same thing over and over again and expecting different results. Einstein. Relating Einstein's quote to trading: a trader should not make the identical mistake over and over, expecting different results (good trades, or winning trades) because that's insanity. A good trader learns from his mistakes, and so they never occur again. Which limits the number of potential bad moves he can make upon entering another trade, which translates into a greater chance for success since he's nearing perfection. The quest for perfection is a continuous quest, for if we had been perfect: we would be inhuman. Imperfection defines humankind. Do not allow your imperfection, your errors dishearten your efforts at perfection. Just know that we all make errors.

I conclude by leaving the next two quotes of Einstein's for your own idea:

Human beings must have action; and they will make it if they cannot find it. Albert Einstein.

Everything should be made as simple as possible, but much easier. Albert Einstein.

Rational expectations is a theory in economics that states that agents' predictions of the future worth of economically relevant variables aren't systematically wrong in that all errors are random

That is, it assumes that people don't make systematic mistakes when calling the future, and deviations from perfect foresight are only random.
(pulled from wikipedia )

basically, regardless of what you will never reach the ideal trade with absolute zero drawdown. Yes we could time the market properly sometimes and feel that we've made a flawless trade, but in fact you can not have the ideal trade in a random market. That's why every time we trade it might feel like we've made a error, or made mistakes in our executions even in our winners. The real mistakes which we are able to learn from are those where our future price predictions were wrong... not the implementation side, but the fundamental reason for why you think the future price will wind up in this way, also the mistakes we make while handling the stop loss and t/p... I think we need to separate the mistakes into two egorys- Why was it a error at the trade management or t/p s/l, which we could learn from and fix? Or was it what seemed to be an error on the part but reality it was a result from market randomness. . Something which we can't fix...

Originally Posted by ;

You clearly completely missed point of my thread... Perhaps reread the thread and maybe you will know it is message. And incase you're to lazy to see it, I'll reevaluate my threads message for you: finding success in losing trades means that it is not the end of the world when you lose, and you find success by eliminating the mistakes you always repeat, which will allow for success.

Additionally demo training can be quite practical and beneficial training and preparation to your trading. Here is an analogy to compensate your unsuccessful logic:...

maybe he would know better if you said, finding FUTURE success in losing trades. By analyzing your losing trades you may realize your mistake and not do it again in the FUTURE which will equal victory.

Oh come on now, lets face it, lets be honest with ourselves. How many times have you put on a commerce and the second once you push the button you say out loud, OH SHIT since you just realized something that you did not take into account before making the commerce choice that you just made. Face it, you blew it because you just made a mistake. You can make several of these trades in a day or in a week and each time the error might will be an entirely new error. So, I really don't see how anyone can say you can't learn from analyzing your mistakes. A lot goes into an effective Foreign Exchange commerce.

Many variables have to be taken under consideration in creating a trade choice. You may get nine (or whatever number) of those variables right but it will be the tenth one that you forgot about or just plain failed to see that'll turn your commerce into a reduction. Sound familiar anyone?

I agree that practice makes perfect.

Correct me if I am wrong but has anyone mentioned journaling of transactions in this thread yet? How often have all of us heard how important this is? Does this activity give itself to the analyzing of transactions that will make us all better traders?

Hedging