Did you know you can’t trade the markets? It’s impossible.
That’s not an original thought, by the way. In fact, I’ve never had an original thought in my life. Everything I know I’ve learned from someone else. I learned that you can’t trade the markets from Dr. Van Tharp, the author of several books on investing and trading.
And in every one of his books that I’ve read he makes the point that you can’t trade the markets, you can only trade your beliefs about the market. At first that idea didn’t mean much to me. And then it finally hit me that the fact that it’s impossible to trade anything other than your beliefs about the market is a profound idea. One that can lead to consistent profits.
For example, do you believe you need to be right when you make a trade or investment in order to make money? If so, why do you believe that? Would you rather be right or make money? If you would rather make money, you need to get rid of you belief that you need to be right.
Does it bother you to take a loss? Why? Do you know of any significantly profitable method of investing or trading that doesn’t involve losses? Let me answer that for you — you don’t. That being the case, why do losses bother you?
Winners in this business get to a point where losses don’t affect them at all. They know if they trade long enough at some point they’re going to take 10 or 20 losses in a row, but — as long as they have a methodology that gives them an edge and as long as they size positions properly — they’ll still be profitable.
So examine your beliefs. They may be holding you back.