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How do we handle a series of winning trades? This may not be a question that you have thought about, but it warrants some serious thinking, as a professional trader.
It is of course a nice "problem" to have, a set of winning trades. Suddenly you are checking the price of the Ferrari you always wanted, maybe a luxury trip somewhere? You can't lose, right? The money just keeps rolling in and very soon you can retire to a tropical island without a care in the world.... The reality, of course, is somewhat different! Professional traders always respect the law of statistics and understand that a cluster of winning trades can easily and probably will be followed by a losing period. We must remember each time we place a new trade, is that the outcome is largely random in the overall number of trades placed during our trading career. Although it feels great at the time, it is important to understand that every trade stands alone. The outcome of one winning trade had no bearing or relevance to the next one and so on. That is why mastering emotional control as a trader is vital. We shouldn't get too excited by winning trades and conversely not be bothered by the inevitable losing ones either. Treat each trade as a separate event and allow the statistics of your method to play out over time. That way it becomes easier to maintain a balanced state of mind, whether you win or lose. When we experience a streak of either winning or losing trades, it comes down to luck, pure and simple, as trade distribution cannot be predicted. Stay balanced about each trade outcome and don't order that Ferrari just yet!
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AuthorJohn Morris is a professional financial trader, this site shows you the setups and results achieved, using the simple methods described. Archives
June 2023
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