Being right and making money are not the same thing. A disclaimer, I love helping people and especially new traders because I was helped. I am also an entrepreneur and my trading education was expensive so I can’t give it all away so this post does contain ambiguity. If you liked something, hated something or thought I was out of my mind, extend me the common courtesy of telling me, it is much appreciated. I was inspired to write this post from eminiplayer tweet’s. One of hardest things to teach traders is you can do everything right and lose money or vice versa. It seems logical that if you know where the market is going that you make money or vice versa. For example, things look different from far away (nothing invested) than they do close up (invested). This is true about trading, life, relationships, etc. You know why it is so easy to give advice? Because most of the time you have nothing invested in the outcome. You know why it is so hard to give up on a friend or family? Because you have a lot invested. The view is different. Paper trading or being right from afar is not a bad thing. You can get 1 of the 3 rewards that trading offers (intentionally ambiguous).
Answer the following questions, the comment section or in your head if you are most comfortable: Are you in the market or out of the market when you know what is going?
If you are in the market and know what is going on:
Was it in your trading plan to stay in the market?
Are you afraid of success?
How was your timing?
If you are not in the market and know what is going on:
What stopped you from being in the market?
Did you have bullets?
Does it give you confidence, to have a successful paper trade?
If it does give you confidence, do you see how your view on the market could change once money is involved?
No one ever believes me when I tell them that my best days are not the most profitable or how my worst days are not my biggest losses. Having an idea where the market is going is important but not as important as a trading plan, the balls to execute, and of course bullets. We get caught up on dollar amounts and yes those matter because this is a business but money is not the only way to measure. On an individual trading day basis money does not mean anything unless you exceed your downside. It is way more important that I follow my trading plan, be discipline, and stay focused. Those things come first and over time so will the money. I dramatically improved and became less overwhelmed when I started focusing on the things I could control (ie trading plan, etc) and stopped focusing on the things I could not control (ie, the money).
Long story short, the reason why being right and making money are not the same thing is because the market looks different depending on what you have invested and because we can not take more money out of the market than it is willing to give.
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