In Trading, Expectation Can Be a Dangerous Word


If a trader expects to win all the time-or even the large majority of the time-he's setting himself up for a lot of heartache, so Frank Kollar of suggests several important things for newbies to remember, such as the fact that trading is the war they are trying to win, not the current battle.

Why do most traders lose most of the time?

Why is it so many investors will stay with a position as it loses, hoping it will bounce back, instead of cutting their losses? And why do those same investors, when they have a winning position, take quick profits instead of letting the trend play out?

It is all about emotions. Not wanting to lose. Wanting to feel good about a profitable position. But unable to make consistent profits.

It's Not the Battle, It's the War

Too many market timers believe their last trade is a reflection of just how good a timer they are (or how good their timing service is).

This boils down to one word.expectation.

If you expect to win all the time-or even the large majority of the time-you're setting yourself up for a lot of heartache.

And the sad fact is, if you believe market timing is about winning all the time, you are also setting yourself up to be one of those many thousands of losing investors.

To win as a market timer, you must focus on the war, not the battle.

The fact of the matter is, this is to a large degree a game of odds and should be played over a long period of time.