The Secret to Trading is Same as Dieting 🤫

🎓 TRADER PSYCHOLOGY

The Secret to Trading is Same as Dieting 🤫

Trading and dieting are more similar than you think - both enjoy a 95% rate of failure. Both have millions of gurus trying to sell you their “secret” solution, and both are multi-billion dollar industries based on hope rather than results. 📉🍏

But there is an even deeper connection between the two. Just as there is no “diet” that will help you lose weight in the long run, there is no trading strategy that will make you money for life. This explains why books on some of the world’s greatest traders sound like interviews with idiot-savants. That’s because there is no “secret” strategy there. 🤔📚

When you read accounts of the greatest traders, you always walk away amazed at the variety of their approaches. Some trade trends, some are pure mean reversion traders, and some are momentum riders often on the opposite side of the trade from the other guys. 📈🔄⚡

Furthermore, they will often contradict themselves in an interview and talk about how they’ve switched their approaches mid-stream to adjust to market conditions. 🔄🗣️

What becomes clear is that all great traders are consistent at only one thing—execution. ✅

Just as with “dieting,” the only thing that really matters is portion control and natural, non-processed ingredients, so too with trading there are two or three things that will determine long-term success. 🍽️💡

1. Take a stop. This is always the hardest thing to do—ALWAYS. You can stop out once, twice, or even three times, but eventually, you get stubborn or angry or both and fight the move. That’s why the most important execution skill for winning over the long term is to lose over the short one. 🚫🔄

2. Position size. This is actually exactly the same as portion control in dieting. The bigger your size, the greater your chance of dying (metaphorically speaking). Position size in levered markets can also be highly deceptive. Five simultaneous positions at a 3:1 leverage factor are equivalent to 15:1 gearing for your account. So know your true leverage risk. ⚖️📉

3. Let the trade come to you. It doesn’t matter if you trade momentum or mean reversion; every great trader trades only when the setup manifests itself. Chasing price for the sake of action is perhaps the greatest difference between amateurs and professionals, and the less you chase, the better you will become. ⏳🎯

That’s it. Good dieting is very simple, and so is most trading success. Strategies change, but tactics are forever. 💪📊.