USA
Experience: Master
Platform: NinjaTrader
Posts: 155 since Jul 2009
Thanks Given: 45
Thanks Received: 114
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I was reading something the other day that made me think about this enough to want to share with you.
If you are playing Roulette and you always bet on black then your chance of winning is about 47%, assuming numbers 1 to 36 and double zero.
If you bet on black one time then red the next, and then maybe black a few times, then try red again here and there, do you think your odds increase or decrease?
I would say the odds diminish heavily. Because you are no longer consistent. Without consistency you do not stand a chance of coming out ahead.
Take Blackjack as another analogy. Do you hit on 16 or stay? If you only hit sometimes on 16 then your odds will be much lower than if you consistently hit on 16.
In trading there are similarities with this. If you are in a position but you exit the position in a non-consistent way then you lower your chances of success. Maybe you lose one or two trades but if you start altering your strategy then instead of winning the next several, you probably turn those into losers as well.
There is nothing more important than a good solid trading plan. I've said before the trading plan needs to be simple so you can hold yourself to it and not use it as a loophole when something goes wrong, namely when you screwed up you can't blame it. You can't change the plan midstream meaning you can't change your strategy in the middle of a day or middle of a trade. Your strategy needs to be consistent.
In trading what separates winners from losers are consistency, well thought out trading plans and methodologies. Winners exhibit these qualities while losers are always changing their plans, their charts and playing with new indicators.
"Let us be thankful for the fools. But for them the rest of us could not succeed." - Mark Twain
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