Small losses and Big Profits

OK, now if we look at the 3min NQ, you can see how there was a TS3 buy later in the day (the first one was against a red STF, but this second one was on a black STF so was OK). But the important point is the size of the profit at +3.7R (ignoring slippage and commission).

So even after 3 losses on the ES, this one profit put you back into Profit overall for the day. 1 profit and 3 losses is only a 25% hit rate, but you still made money. Most amateur traders never get to fully understand that you don’t need a high winning % to be a successful trader, controlling your losses is actually far more important. This is why 95% of amateur traders end up broke in this Industry because they never learn what is important and what they have to do to get it.

Thanks, Steve

PS, as I have already said, the 15min trend was UP so not only should you have avoided the losing sells but the Advanced Traders should have been looking to “run” their long trades further. So in reality, the Advanced Traders among you should have had a very good day yesterday.

Small losses and Big Profits

Hi Everybody,

Yesterday was a brilliant example of how the use of correct position sizing can help you when a number of losses come through. If you look at the 3min ES chart, you can see that there were 3 -1R losses. On the surface this does not look good.

BUT, as we will see in the next post, all it takes is one good trade to put you back into Profit. So in reality, you do now need to have lots of profitable trades to make money trading, you just need to control you losses. This is a point that most amateur traders never seem to get or fully understand.

Thanks, Steve

PS, also please look at the Advanced Blog where you will see that the Advanced Traders among you would have avoided these losing trades anyway as they were “against” the 15min chart.