The folks at EWI (Elliott Wave International) released a provoking new article today entitled:
“Blaming Market Manipulation for Losses is a Huge Obstacle to Success.”
The article encourages traders to take responsibility for losses instead of finding scape-goats to blame.
Losses may have just been the result of a bad outcome from a high-probability trade… or might have been the result of a bad trading habit like doubling down on losers or chasing a fast price move.
Mr. Prechter makes the point that “Losses are part of the game” and should be used as learning experiences.
You won’t learn if your loss was a result of random probability or a bad trading behavior if you do not analyze the loss, and instead sweep it under the rug as a painful memory.
I particularly liked the quote:
“You don’t have to be perfect to win in the markets, either; you “merely” have to be better than almost everybody else, and that’s hard enough.”
The article is actually the 4th Point in an article published years ago (not during the current market melt-up!) by Robert Prechter on what it takes to be a successful trader.
It’s brief, but thought-provoking!
Today more and more investors are warming to the fact that psychology moves markets and therefore fundamental analysis, which fails to properly measure mass investor psychology, must be flawed.