Fast forward two years and I have a completely new perspective on how things work. I now think of everything from a businessman's point of view, meaning that winners are expected and losses are simply looked at as being the cost of doing business. I have a friend who trades that has a problem taking losses. Emotionally it's hard for him to deal with a losing streak and when a winner becomes a loser. Because of this he is focused on finding a system that has a 95% win rate. When talking to him I tried to explain to him that if trading is truly his business then he needs to stop and ask himself this question. Is there any business out there that doesn't have operating costs? It just doesn't seem possible to have only income without with no expenses. Anyway, the point is that losses don't bother me anymore because of how I look at them. I now both accept and expect them to happen, it's just business. However there is one thing that gets me heated, and that's missing opportunities.
So far this month I have indentified five trading opportunities that I missed. Three out of those five came from my day trading which I don't mind as much because of how fast the action is at that lower timeframe, but the other two really make me upset. In this particular case the two trades I missed both would have been winners but I honestly would have been just as upset if they weren't. My main goal is to take part in every trading opportunity that meets my requirement because I know that in the long run I will be profitable. I often relate this trading mindset to my days of doing sales. My boss would always tell me that the most important thing was to actually go and talk to people. Whether they bought the product or not wasn't up to me, the point was to provide them with the opportunity. I compare it to trading in the way that, when we enter a trade we have no idea whether it's going to be a winner or a loser. We may have a hunch based on our analysis, but in all honesty we can't definitively say this trade is going to win. However if we don't even enter the trade then we take away any chance of winning at all. Just as if we refuse to talk to a potential customer (not knowing if they're a buyer or not) then there is no way we can make the sale. Obviously trading is a little different because you can lose money as well, so many people have the mindset that if they miss a trade then they simply avoid a chance of losing money. Which is true, but if you have faith in your abilities then you shouldn't be entering trades thinking you're going to lose in the first place. If that's the case then I suggest you go back to back-testing not only to gain confidence, but to also make sure that you have a system that proves to be profitable over time.
Thanks for taking the time to read this and comments are welcomed.
Also if you haven't done so yet, here is the link to sign up for the FREE 2 Week FOREX Trader Boot Camp 2.0. There are plenty of free training videos that come with registering and if you can't make the actual sessions i was told that the 2 weeks will be recorded for future viewing on your own time. http://www.triplethreattrading.com/2011_live/?ref=464
Akil L. Stokes (@IambusinessTR)