Trade with the mind, not the heart
If there is one thing that can crush a trader, it is his heart. Emotions are the number one reason why traders fail and the rock solid institutions collect more and more money.
Unfortunately for the full-time investor, what you eat depends on how you do. In so many jobs performance isn’t nearly as important as what it is to a trader. When your next meal depends on the outcome of the non-farm payroll report its no wonder you’re a nervous wreck.
No matter how much you beg or plead or need a good trade, the market is a market and moves on its own. Worrying over an investment won’t make you any money, nor will cancelling an investment before it even begins. If it has worked before it will work again but you have to give it the opportunity.
With that said, it is important to place your faith in odds and money management to win out in the end. While it may be hard to hold onto positions that are deep in the red, sometimes you just have to because the odds are in your favor. You’re not out there to win every trade, Warren, you’re out there to win more than you lose and to do so consistently. Too often are traders emotionally wrecked after one bad trade that they give up and go back to the “establishment” doing the dirty work for someone else’s benefit.
Winning strategies will always be winning strategies, it is just that simple. Most strategies that stand the test of time do not win every time, all the time; they win more than they lose over the long run. That is what investing is about. Winning more than you lose and doing it regularly.
I always focus on trading “like a rock” no emotions and complete faith in my strategy and my ability to trade. Sometimes I have to remember that strategies work out in the long run and that a loss is just one more step to a winning trade.
Don’t get down on losers, good strategies mathematically always win out in the end and will continue to do so. One loss is just a drop in the bucket, get out there and trade.