If you are a retail trader, I’m sure you have read articles that basically say you’re in for some pain and suffering.
Most will tell you that 80%+ of people who attempt to trade in their own account lose money.
However, they usually don’t address the most important question … WHY?
In a time where information is freely available and trades can be executed quickly and basically for free, the vast majority of independent traders lose, while thousands of institutional traders around the world seldom do.
The pros do have advantages in terms of speed of execution and access to some information for sure, but perhaps not enough to explain the huge discrepancy.
After a decade-plus of growing my own account and nearly a ½ decade of helping others of all calibers do the same, I’ve come to the conclusion that the biggest difference between institutional and retail traders is not intelligence or analysis, nor is it necessarily speed of execution…
The biggest difference is position management, or in most cases the lack thereof.
It is not that pros never take a losing trade, but when they do, they do so as part of a plan that was devised before taking the position, not just on the spur of the moment.
They go out of their way to make sure that whatever they do, it is a product of logic, not emotion.
An early mentor of mine once told me that the two biggest enemies of good trading are pride and greed.
Pride doesn’t allow you to admit when you are wrong and leads to you running losses into the ground, while greed stops you from taking a profit when you should.
Both can be avoided by having a plan and sticking to it.
Execute your stops and profit targets even if your mind is telling you otherwise.
When you do, you will quickly realize that if you only take trades where the logical exits work in your favor, you will do better.
It isn’t about what positions you take, BUT what you do with them.
If your profit levels are consistently double your stop loss levels in terms of points away from your entry, you can make money even if you get 1/2 of your trades wrong.
You won’t get rich overnight that way, but that shouldn’t be your aim anyway.
My focus is on the long haul. Trading is a marathon, NOT a sprint.
Along the way, I’ve witnessed so many traders get in trouble because they either didn’t cut their losers short or turned winners into losers by being too greedy and not taking profits when they’re presented.
Those are amateur mistakes, and if you want to trade like a pro, you have to avoid them.
Have a plan and stick to it … your account will thank you!
If you need that positive reinforcement, reach out to me – I’d be happy to help you: Click here to learn more about my profitable trading method