Trade like the house
It’s widely accepted that in Las Vegas, the house always wins. Not necessarily every time, but in the long run it always wins because the odds are stacked in its favour. When we travel to Vegas to gamble, we ‘hope’ that we will leave the black jack table a winner – we are either going to get lucky or not. However, trading the markets is not gambling if done correctly. If you trade with a plan, you have an edge that you know will win over time as long as you have the discipline to follow it. Just as the ‘house’ knows it will win over time in Vegas, a trader knows they will win by sticking to their trading plan.
Professional traders do not ‘hope’ they are going to win like a person going to Vegas, yes they will take losses, but ultimately they know the odds are on their side. Having a trading plan set out with your specific rules for entering and exiting trades, money management and regular reviews ensures that the ego is suppressed and that hope does not factor into the equation.
Have a look at your last 20 trades. Were they executed flawlessly within the remits of a trading plan? Were profits taken at a logical point or did greed take over? Of those trades that lost, could you have recognised the warning signs earlier or should you have even taken the trade in the first place? A plan will ensure all variables are covered. It won’t stop losing trades, but it will enforce discipline which ultimately will give you consistent trading profits.