It is so easy in trading to want a “sure thing.” Often we tell ourselves that the next time we see the perfect trade, we’ll hit it hard and knock it out of the park. Perhaps you have searched for the perfect indicator or trading system which will virtually guarantee you profits if you will just stick with it. No doubt, we have all heard stories of other traders who claim to have found the “holy grail” of trading and fully expect to watch their account values skyrocket now that their search is over. However, the fact is that there are no sure things. Every trade has a risk associated with it. All profitable trades (even the home runs) started with a chance of losing money. We have no guarantee that our stocks will continue in the direction we want them to.
No matter how successful your trading becomes, you will not ever have the guarantee of having only winning trades. You must focus your efforts on two things: finding the best setups, and executing your trading plan. Your success will depend on how well you can do these two things rather than how well you can locate the next magic bullet. Take good chart patterns and hit those stocks as they begin to move. Place a stop-loss order in case you are wrong and then let the law of averages work in your favor.
Amateur traders become successful when they stop seeking the perfect indicator and begin to focus on managing their trades better. Keep stops in place, and move them up as your stocks show you a profit. Allow your losing trades to trigger your stops, don’t try to dollar cost average and hope. Your success won’t boil down to how many times you were right. Your success will depend on making as much as you can when you are right, and losing as little as possible when you are wrong (and you WILL be wrong!). Don’t expect to find the golden arrow for your trading success – it isn’t out there waiting for you! The sooner you are able to look inward at your tendencies as a trader, the sooner you will see your account getting larger.