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Winning Streaks vs. Losing Streaks

All traders who last long enough will go through periods of winning and losing streaks.Mathematicians refer to the process as the theory or run known to gamblers as a “streak.”Games of chance  such as roulette ,craps and blackjack are predicated that the house has an edge over the player.Trading  has  a distinct advantage because the trader has the ability to be the house.A mathematical edge is all that is all that is needed by the trader to increase his probability of success.Sound money management advantage begins to work.What happiness in real time trading is that after a series of losing trades the trader will begin to question the system or his ability to execute the system properly.

Tow things are necessary to get though the bad losing times !Belief in your system is very important but it ranks second to the sound money management system.Mediocre trading systems can have positive results with the use of a good money management system.The rule of thumb is to reduce your risk on any trade to 2% of working capital.This should prevent a meltdown but remember trading is about probability not certainty !

Conquering your emotions

When a trader experiences the emotional roller coaster associated with real time trading, he soon learns that, no matter how good his system is, he will need to conquer his emotions if he is going to be able to follow it. But, a master trader is also a master of his emotions. Again, this means that he must be willing to address any issues he has that create emotional states that cause sabotaging behaviors.
Working on conquering emotions can be done on one’s own if the trader is well balanced and does not have moderate to serious emotional issues to address. But, if not, he must find an outside resource to help him resolve his emotional issues.