[ this message comes from David C, one of our high-performing Members ]

In the profession of trading or stock speculation nothing is guaranteed – there are only probabilities. A primary key to having a winning trade is picking the correct direction of the overall market. Nearly all stocks move with the market. Make an error at this point and a positive trade becomes much more difficult to manage while a losing trade becomes a much higher probability.

I am seeing a disturbing trend among traders these days. It is a core problem that will eventually lead to an equity blowup and an end of their trading career. I am talking about not admitting when you are wrong.

What we have to remember is that it is okay to be wrong, it is part of the trade so to speak. Even if you are a phenomenal trader, you will still be wrong -perhaps one-third of the time. Again, this is okay.

What is not okay, is NOT admitted that you were wrong and taking the loss. Letting the loss get bigger and bigger because you want so badly to be RIGHT. If you do this, you will not be a professional trader for long.

Do not let your ego get in the way of trading. Do not let any personal bias get in the way of trading. Do not double down on a losing trade. Do not lower your stops on a losing trade. Trading is, in my opinion, the most difficult profession to master. The “Mind” part of trading or controlling your mind and emotions, and that is what makes trading so difficult.

Keep it simple – when you are wrong, Get Out. You have virtually no chance at success if you do not follow rule #1.

David C