Date: 3/9/2021
Author: Chris Hood
Be sure to check out new episodes of my video podcast each week, where my ace pupil Brian Jones and I talk the ins and outs of options trading- and give you insights and strategy that you can immediately put to work for you in the markets.
You just started trading.
Like most at this stage, you’re struggling just to keep your head above water.
If you’re lucky, you’ll win about 50% of your trades – no better than a coin toss.
The initial journey of the retail trader is like this.
Huge euphoric wins, followed by equally large devastating losses.
You’re on an emotional rollercoaster and a financial treadmill. If you manage to not blow up your account entirely, you’ll just break even at the end of the year.
The only person making money is your broker.
You pay commissions and fees on every trade, so if you just spin your wheels and go nowhere, it’s just fine by him.
I know this because I’ve lived it.
When I started my trading career, I made all the mistakes a person can make. Luckily, I didn’t lose everything, but there are some trades I’d prefer to forget.
There’s my 85K loss on a naked put or the seven-figure profit on silver that disappeared because I didn’t sell quickly enough.
I trade for a living, and I know what you want.
You want the perfect score. Every trade a winner.
You’ll read stories about traders with 40%, 60%, or even 70% win rates and think, “Don’t these guys know what they’re doing? I want to win all my trades!”
That’s why you got into this anyway, right?
Winning trade after winning trade. Triple-digit gains every week. All green all the time!
Forget losing 40% of the time, or even 30%. I’m here to tell you the one secret of how to never lose again.
I hope you’re ready for this.
QUIT TRADING!
That’s right, close your account and just move on to the next get-rich-quick scheme.
Losing is simply a part of playing the game.
For all the sensationalism in the movie, The Wolf of Wall Street, Matthew McConaughey’s character makes a serious point:
“Nobody – and I don’t care if you’re Warren Buffet or if you’re Jimmy Buffet – nobody knows if a stock is going to go up, down, sideways, or in circles.”
Let me qualify this.
Nobody knows for certain what a stock is going to do.
However, with a proper plan, study, and a good coach, you can become an excellent and consistently profitable trader.
You don’t have to be a rocket scientist; you just have to put in the time.
Those massive returns are real. My clients and I have seen dozens of 200-300% gains this year. But not all winners are like that.
You MUST get used to taking losses!
First, you have to be able to deal with it psychologically.
One loss or even a string of losses doesn’t necessarily make you a bad trader. What matters is your long-term profits. As long as you trade intelligently (with rules and a plan), your wins will more than compensate you.
Second, you have to learn to win big and lose small.
I tell all of my clients to forget about the winners. Winning trades take care of themselves. Learning to lose less is the name of the game. Manage your losers, and you’ll be successful.
Jiu-jitsu is such a fundamental part of my life that it always provides a ready analogy to trading.
EVERYONE taps out.
Consider legendary competitors like Saulo Ribeiro and Marcello Garcia. They’ve been submitted so many times in training no one could keep track.
They’ve lost at competitions.
Each and every time, they accepted that lost, learned from it, and moved on.
That’s why they’re great.
Sometimes they made a mistake, other times, they had a bad day, and sometimes their opponent was just the better fighter.
Failure is a necessary stepping stone to success.
You can make a incredible profits trading options and completely change your life, but you’re going to take your lumps along the way!
I want you to succeed. I know you can.
I’m here to help you do it.
Next time I’ll give my thoughts on one of the most common problems, relying on single indicators in your trading.
