It’s finally nice to see some dip buyers get their assets handed to them. A strategy that has worked well the past six months is not playing out so far and I’ve seen a few seasoned traders take some losses. Who can blame them? Taking that risk for the potential reward is what trading is all about. You exploit what’s working until it doesn’t work anymore. The key is that they are small losses and that’s necessary to be successful in this business. It’s called managing risk.
In Schwager’s book “Market Wizards” he asks Steve Cohen what he looks for when he hires new traders. Cohen said that he looks for people who aren’t afraid to take risks. Now I doubt he’s looking for someone who has no problem betting it all on black or some other gamble. He’s looking for those that aren’t afraid to test themselves to learn and grow. Those that aren’t willing to take risks are those still standing on the sidelines searching for the perfect entry that will never arrive or back-testing a strategy that reaches 90% accuracy. The point is that they are not trading and each day is a missed opportunity for both personal growth and profits.
That fear of stepping off the curb hinders growth as a trader. As Dr. Kiev puts it, fear that keeps one out of the market is considered a personal flaw which impedes progress and personal growth. Start small and build confidence as you progress and become familiar with market participation. Don’t sit there and watch in awe as a highly probable setup appears. Trade it!