This is a follow up post to …
The Goal of Winning vs the Goal of Not Losing – by Vladimir P
If one cannot embrace or believe in a particular approach they will not trade/invest well consistently over time. If one is not willing to lose and has no tolerance for risk, they will not win.
Most traders will begin doubting after 3 losing trades in a row and look for something new and different. Trading is a game of probabilities and money management. Many search for the method that allows them not to lose. Many traders come into this game with unrealistic expectations.
Aaron W did have a 19.64% gain from May 4th to June 22nd with a win rate of 62.5%. Most traders would settle for this type of return if it can be duplicated with consistency and over time.
Not to take away from Aaron’s trades but this achievement has been duplicated many times in Spike. We have several Spikers and Spike Members that have demonstrated these types of results each and every quarter. We have seen results of 40% gains in weeks. To my knowledge all achieved with various types of technical analysis. We have all the records since SpikeTrade’s inception and keep great records, which happens to be a trait of a successful trader/investor. We see on average 5 – 7 traders doing 20% or better in a 3 month period. The key is having an ability to minimize your losses when you experience the draw-down periods and this is where most lose the game.
Dr. Elder talks extensively about the 3 M’s.
Regardless of what Method one chooses to use, it is the last M of importance.
- Mind
- Money
- Method
If number 1 or 2 is lacking it will not matter what Method you use. When one begins to experience loss the mind is affected and the mind controls the decisions we make with our money. It is all interconnected and creates action and re-action. No matter how much information we may think we have, we can never have certainty of the reaction the masses may take. It is certainty that many chase, but certainty does not exist, only probabilities.
Everyone is looking for a fool proof guaranteed way to make money. It is why Infomercials run on TV, there are folks that will buy a promise that leads to nowhere only for the hope that we can fulfill our greed.
Personally, my method of late has not worked so well, yet I am still profitable for the year. Why? Money Management and the Mind to willingly embrace what has worked for me for several years. It is imperative to understand the draw-downs that are inevitable in this game of probabilities and understanding precisely what our risk is. We can then begin to accept and embrace whatever Method that appeals to us. It is why one cannot simply go read a book and duplicate results in hopes to achieve our dreams. The Method is at best 20% of the equation. The other two M’s make up 80%. Risk tolerance (Money) and Mind is vastly different with each person.
I have a question….
If the BIG Institutions have such an edge and supposedly know so much more than the typical trader/investor, why do so many go Bust?
The brightest minds of our world have lost billions, even though they were in the KNOW so the speak. Think about…
Even those we honor and put into the Investing Hall of Fame, have lost millions/billions and many bust out. Did they lose their method? Did they lose their ability to Sleuth information?