you may have thought it was going to be something similar to not picking the trend or putting too much money on a single trade or one of twelve other stuff. But I'll assure you, from sour experience, this one perspective causes more issues than most other stuff you may do as a trader . Your fogeys rewarded you when you're right and told you off when you were "wrong". From your earliest days in class you are taught that being right is the most vital thing. Because, as everyone knows, it will occur pretty constantly. Don't Beat Yourself Up or the Market Will join In. As we here at forex trading would say, faint heart never won fair woman, yet look before you jump. Often , what looks like a mean trade starts to run away as the market climbs, and you finish up wishing you had taken a big position. And inversely, if you get this wrong, you can finish up banging your head against your PC screen and wishing forlornly you had been a bit more 'prudent' in your trading size. You'll need to have done some trades before, and have the stats handy ( the proportion of your winners to losers, and the scale of those winners and losers ). Lets say that 'WP' means 'Winning Percentage' and 'WL' means 'Historical Average Win Size divided by Historic Average Loss Size'. To appreciate this formula, we'll take an example, primarily based on a sequence of 15 trades. Replacing the figures into the formula, we have:-.
a mean win size of $200, a standard loss size of $100, so that the 'WL' number is two. My golfing was miles better after I stopped getting annoyed at myself for each crappy shot. You can not bear to be wrong, so you excuse your call to oneself. And you can miss getting additional profits from a trade as you were sure that "it really could not go any higher".
By being aware of this "need" you can beat it - over a period. You want to get to the point at which you "want what the market wants".
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