Start thinking Probabilistically!

In this blog, I am going to show you how to look at the larger picture of trading and hopefully give you a paradigm shift in your thinking!

So there is a random distribution between wins and losses in the short term but in larger sample sizes the probabilities begin to work. In the below image imagine this is a series of trades.

Now imagine if every ✔ was a +3R win And each ❌ was a -1R loss Total = +44% Return

But would you have stuck with the strategy after only 1 win in 9 trades or losing 10 in a row? Most wouldn't. Most would have given up and switched strategies by then. And this my friends are the exact reason why most fail!

__95% Just Give Up Or Switch To The Next Strategy!__

No discipline,

No trust,

No idea that every trade is random in the short term.

It's only when we put these random samples all together Do we gain a positive expectancy!

__You Have To Marry Your Strategy!__

This is why the discipline to stick to your strategy .

Through the good and the bad times are so important

Just like a good marriage, you have to work at it!

__Is This The Missing Piece Of The Puzzle?__

Imagine if you just stick with it till you have a much larger sample size?

Or if you stay with your system after 6 in a row?

Maybe your trading would look a lot different.

__Stay Focused!__

Stop thinking outcome.

Start thinking process!

Once you do your whole trading will change!

__Conclusion__

Hopefully, this visual representation can make you see trading in a different light. You need to start trading the numbers and not your emotions... Learn to think probabilistically. And realise you are a lot closer than you think.

I hope you enjoyed this post. Let me know if it helped you!

To Your Success,

Alan

The Divergent Trader

Short but very informative