There Is No Perfection In Trading
http://www.edgewonk.com/there-is-no-perfection-in-trading/
Excerpts
To make it short and painful: there is no perfect trading strategy. You will have to deal with losses. Yes, there are HFT outfits that have been posting winning day after winning day for the last 5 years, but let me tell you a secret: you are not a HFT outfit. Plus, even if such strategies should exist, the chances of coming across one of those during your lifetime would be extremely small.
So stop hoping, and start accepting the fact that you will lose. A perfect trading system is one that makes money in the long run, not a system that makes money with every trade – that is utopia.
You may already have a profitable trading system in your hands, you just don’t know it because after every losing trade you want to adjust so that the loss you just took could have been avoided. However, this means changing your system and opening it up to other potential losses.
“Most traders take a good system and destroy it by trying to make it into a perfect system.” – Robert Prechter
Excellence! It is your job to make sure to follow your system 100%. Not even the slightest deviation is allowed. Make sure you are always trading at the peak of your performance. Strive for excellence and make every trade count!
Every trade that you take outside of your trading system is an insult to yourself, to the time and effort you put into trading, and to your self-respect.
If you encounter a losing streak, research whether you executed all the trades flawlessly and if yes, did the market conditions change, or did anything else happen?
It’s fairly simple, really: Once you followed your system for a while (let’s say 50 trades) with the utmost excellence and you are still losing money, you can say with very high certainty that the system is the problem. You can then adjust, but you will never know if your system is a winning or losing one if you don’t follow it in the first place.
However, if suddenly you are winning over a sample of 50 trades – wow. This could be it! You may have a winning system. Why change it now? You are making money. Trade the system until you can do it blindly, day in, day out and execute with excellence.
f you get bored, that’s great! The hallmark of excellent trading is monotony. You have mastered your setup, congratulations. You can now, in order to smooth your equity curve and diversify your income streams, develop another setup following the same process.
Over time you may learn 3-5 setups to find trades in every market condition and your equity curve will look almost perfect, although there will still be a lot of losers among your winners!
“Multiple systems, traded over a wide variety of markets are necessary to smooth out the equity curve.” Joe DiNapoli
If you manage to follow your plan, will help you to turn a losing system into a winning system and it will help you keep a winning system just the way it is – winning. Don’t be greedy, don’t be a perfectionist. Be an excellent trader that knows that losing is part of the game.
http://www.edgewonk.com/there-is-no-perfection-in-trading/
Excerpts
To make it short and painful: there is no perfect trading strategy. You will have to deal with losses. Yes, there are HFT outfits that have been posting winning day after winning day for the last 5 years, but let me tell you a secret: you are not a HFT outfit. Plus, even if such strategies should exist, the chances of coming across one of those during your lifetime would be extremely small.
So stop hoping, and start accepting the fact that you will lose. A perfect trading system is one that makes money in the long run, not a system that makes money with every trade – that is utopia.
You may already have a profitable trading system in your hands, you just don’t know it because after every losing trade you want to adjust so that the loss you just took could have been avoided. However, this means changing your system and opening it up to other potential losses.
“Most traders take a good system and destroy it by trying to make it into a perfect system.” – Robert Prechter
Excellence! It is your job to make sure to follow your system 100%. Not even the slightest deviation is allowed. Make sure you are always trading at the peak of your performance. Strive for excellence and make every trade count!
Every trade that you take outside of your trading system is an insult to yourself, to the time and effort you put into trading, and to your self-respect.
If you encounter a losing streak, research whether you executed all the trades flawlessly and if yes, did the market conditions change, or did anything else happen?
It’s fairly simple, really: Once you followed your system for a while (let’s say 50 trades) with the utmost excellence and you are still losing money, you can say with very high certainty that the system is the problem. You can then adjust, but you will never know if your system is a winning or losing one if you don’t follow it in the first place.
However, if suddenly you are winning over a sample of 50 trades – wow. This could be it! You may have a winning system. Why change it now? You are making money. Trade the system until you can do it blindly, day in, day out and execute with excellence.
f you get bored, that’s great! The hallmark of excellent trading is monotony. You have mastered your setup, congratulations. You can now, in order to smooth your equity curve and diversify your income streams, develop another setup following the same process.
Over time you may learn 3-5 setups to find trades in every market condition and your equity curve will look almost perfect, although there will still be a lot of losers among your winners!
“Multiple systems, traded over a wide variety of markets are necessary to smooth out the equity curve.” Joe DiNapoli
If you manage to follow your plan, will help you to turn a losing system into a winning system and it will help you keep a winning system just the way it is – winning. Don’t be greedy, don’t be a perfectionist. Be an excellent trader that knows that losing is part of the game.
