One common adage

One common adage on this subject that is completely wrongheaded is: you can’t go broke taking profits. That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chance of gain. The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance. – William Eckhardt

One common adage

Igor Marinkovic

Electronic engineer, futures trader and property investor and total beginner in making good web sites

2 Comments

  1. That’s an interesting one Igor; I’m looking to improve my system by reducing the number of losing trades, which I don’t think is a bad thing overall. I think it becomes a problem when taken to extremes?

  2. Hi Brent thank you for your comment. To me this is one of the best wisdom ever posted on this site.
    Everything boils down to: “human nature does not operate to maximize gain but rather to maximize the chance of gain” we would always take many small winners rather than few big one. Over long run will over trade and start taking more trades.
    Losing trades will be with you till you trade, so don’t stress about them. Best results are achieved while we focus on what we do the best, not on what we do the worst.

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