Today is the perfect opportunity to remind ourselves of the big picture and practice mindfulness!
Today the market is down big. We took a net of 6 losses this morning. That's a bruiser of a day!
But you know what: if I could go back in time, I'd do the exact same thing again and take those same trades. The reason is because our trades are based on a statistical historical edge. So I would keep trading with that edge as often as possible, especially given that no one can predict the future.
Here's another way to think of things. At casinos with slot machines, the house has the edge. Casinos make great profits when people play their slot machines, because they have a statistical edge. If the gambler wins, it's just a stroke of luck. The house comes out ahead in the big picture, and that's why so many casinos are thriving and successful.
But every once in a while, a gambler playing the slots does win a big payday. It's bound to happen every once in a while, and sometimes it might even happen multiple days in a row. Those days aren't fun for the casinos financially! But in the big picture, it's not enough to disrupt their overall path to prosperity. It's just one bad day along the way.
Since we're using a statistical historical edge with our trading, similar in a way to the edge that the casinos have, I like to think of us like we're the house. Every single trade I alert has a historical quantitative edge. Over the long haul we should come out profitable. But there will be short term drawdowns that we have to take.
Just imagine if Caesar's Palace in Las Vegas called it quits because one guy had a spectacular day on the slots and they therefore had one really unprofitable day. They'd miss out on all the incredible long term success they had. I don't want to make the mistake of jumping ship just because of one bad day, that's for sure. I want to get in as many trades as possible using my edge, so I just keep stepping to the plate over and over when the edge-based trading strategies set up.
And actually that's the real test and where so many traders fail: knowing that these trades have edge, can you withstand a drawdown and be able to come back to trade another day? It's a long term game with my trade alerts and if you want to benefit from the edge, then one day or week shouldn't make or break your trading approach.
If you have any questions or feedback, I'd love to hear from you.