Best Loser Wins

 

I've been reading The Best Loser Wins by Tom Hougaard, and I've been applying the trading psychology that he advocates. While I won’t pretend that I’ve mastered the techniques as he does, it has undoubtedly helped me execute trades with greater confidence.

Recently, I found myself in a trade where I could have held my position longer and potentially seen greater success. However, I realized that I didn’t have the appetite for the additional risk. Hougaard makes a compelling point that everyone is an expert in technical analysis, and I couldn't agree more. Despite our knowledge, 90% of traders still incur losses. It’s not just about the entry or exit points—although those are crucial. The real difference lies in how the successful 1% think compared to the other 99%.

Here’s a simple question: What do most of us do when we enter the market and see our position showing a profit? The basic psychology kicks in, and we start feeling fear—the fear of losing those gains—so we take profits early. But what do the top 1% do? They add to their positions. They’re willing to do what the other 99% aren’t, and that’s what separates the truly successful traders from the rest.

In my recent trade, I entered at the perfect spot, right where I should have. The market moved in my favor, and initially, I wasn’t panicking because I had done my homework and was confident in my analysis. But as soon as I started seeing profits, I panicked. I forgot everything I had learned from the book and exited the position too early. While I’m disappointed with myself, I know that dwelling on the past won’t help. Instead, I’m focusing on the lessons learned to help me grow as a trader.

Trading is as much about mindset as it is about strategy, and moving forward with these insights will only make me stronger.

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