Would You Have Taken This Trade if it Was The Only Trade You Could Take (One Trade Only)
by: Colibri Trader
So, Would You Have Taken This Trade if it Was The Only Trade You Could Take (One Trade Only)? That is a sentence I seldom remind myself. Since I started asking it, my trading has improved significantly.
If you think about it, the idea about the majority setting the pattern and the trends of social, economic and political life is a common fallacy. History reveals quite the opposite: the majority copies, or imitates the minority and this establishes the long-run developments and socio-economic evolutions.
How Can You Beat the Majority in Trading?
Impossible. If you are a beginner it is very hard. Not because you are not as smart, but because you probably don’t know yourself that well… especially in trading.
So, it is not really impossible, but I prefer to set the bar so very high that newcomers don’t quit too soon… sooner than they should.
I have written about the 10,000 hour rule. I have written about trading discipline. I have shared my vision and approach to trading. I have been generous enough to share my trading analysis, as well. Is that enough?
What Can You Do?
That is the logical question a lot of you will be asking by now. The reality is that there is no simple answer to that. No matter how hard you try, there is always the possibility of failing.
What if my system is profitable over 80% of the time?
Find a system that works only 30% of the time, but can maximise your winnings. Find a system that helps you to stay away from overtrading, taking winners too quickly and cutting losers too late.
80% sounds a bit unrealistic.
What if I have tried and failed?
Move on. Maybe trading is more of an addiction to you. If you cannot run it as a business, you’d be better of finding another passion that brings you a consistent revenue stream.
You will be happier and feel more self-fulfilled. Trading should not be a goal. Trading could be a profession only if it can pay the bills consistently.
What if I am so close to breaking-even? Should I continue trying?
Maybe yes. Hopefully trading pays back, but don’t let “hope” dictate your choices.
Trading is a binary discipline. It either works for you, or it doesn’t. You could probably do a few tricks to improve, but if you don’t have the discipline, you might be better off in another undertaking.
Where the f$%^ are you going with those random thoughts?
Let’s go back to where I started.
Would you have taken this trade if it was the only trade you could take? Probably not.
So, you were asking how to become a better trader, weren’t you?
Imagine you had just one trade to take per day. Imagine you are only risking 2% of your capital on this trade. Which one would the trade be?
Exactly right- you would probably wait for a while before you take it. Is this trade matching all your criteria? Is this trade too boring to take? Does the pattern look familiar?
You could be a way better trader if you had only one chance per day. Think of all those times that you ended up over-trading just to finish the day much worse than where it started.
But, I am so sure this second trade will be a winner!
Walk away! No matter how sure you are, this will break your discipline. Do not turn into one of those addicts in front of a casino, waiting for it to open! Move away and you are already a better trader!
Be the patient hunter. Be wise! Be the trader you will be proud to be when you look in the mirror in 10 years time.
In trading, it is foolish to do just what other people are doing, because there are almost sure to be too many doing the same thing.
Just like- when everyone ignores a vital subject, it is likely to be important to everybody. Do not trust even the trader with the best track record in the world (whoever that is 🙂 )
There is no way you can be in his/her head and see the market they see it. There is no way he/she could be in your head and see it the way you perceive it.
In this sense- trading is a lonely game! Take this for granted and be more like the hunter and not the prey!
What if I miss the only one?
There is always another Monday. As long as you can preserve your capital, missing a trade or two will not make any difference.
As I like to say- look at the next 1,000 trades!
The More Advanced St@#ff
One trade could lead to another. If you are trading the way I trade and if you have been around for a while, you will know what I mean. Although, it might seem confusing for the newcomer, you can always add to a profitable trade.
Avoid scaling up when you are on the losing side of the trade. Try to protect your capital, because that is as far as you could get. If you are curious what I am talking about, check out one of my posts about the One Perfect Trade that I took and see my steps.
What Matters in the End
It is all about having your rules carved in a stone and not breaking them.
Yes, it does and I can’t stress enough how important it is to be patient. I can’t stress enough how important it is to do the simple things right.
Think about just one trade only. Nothing else matters if you master this rule. This will save you so many problems down the line. From overtrading, to losing your capital too fast.
50% of all mistakes new traders make won’t matter to you anymore! As long as you are strong enough to resist the temptation 🙂
Take action today!
What is the next step?
…don’t take this second trade!
Check out my article on How to Fight Overtrading
Also, check out how to build a better Money Management System (Free Risk Calculator Included)
For anything else, give me a shout at: [email protected]