How The Best Loser Wins?

How The Best Loser Wins?

Judging from today’s title, you may be wondering…

Who in their right mind would want to be the Best Loser?

I prefer Wining! Don't you?

Here's the story...

Recently I've been trading. I've had great results (maybe too good?)

I was producing 10% gains — on average daily. Before I knew it, my account was up 200%.

Each week my confidence grew as I documented my trades and looked for ways to improve my strategy.

Last week, I was having another great week and Boom! — a 70% LOSS! 🤯

I went into the trade with a higher order and the market went the opposite way. I was overly confident and figured I’ll increase my position.

The market was bound to correct soon? (So I hoped!)

"Soon" never happened and before I knew it — $100's in losses grew to $1000's.

I felt awful and couldn’t watch any longer. I closed out my trades and took a long nap after that! LOL!

I was so focused on my strategy and technical analysis that I forgot the most important element? “Trading Psychology” — or in simpler terms, my "emotions".

Have you ever started a business, created a product or made an investment knowing in your mind it was a winner?

Did you know 95% of traders fail? I didn’t.

Also, 20% of new businesses fail during the first two years of being open. 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more — Source: Investopedia.

Can we both agree that the odds are not in our favor?

I was in shock for a bit but I sought information on trading psychology books. One source led me to "The Best Loser Wins — Why Normal Thinking Never Wins the Trading Game" — by Tom Hougaard.

Tom stated that the “95%” allowed their emotions and pain to control their decision making. The “reptile brain” function or “fight or flight” protects us from perceived danger. Well in trading and entrepreneurship — that can hinder us!

The 5% expect “emotions” but do not run from the pain. They’ve learned to "flip the switch". Remember this: FEAR = Face Everything And Rise.

Tom mentioned three commands to recode your philosophy:

1. I assume I am wrong — until proven otherwise. (let the market prove me right) Makes it simpler to cut losses faster.

2. I expect to be uncomfortable.

3. I add when you subtract and I subtract when you add. (maximize your gains and cut your losses)

Tom put it best: “ Maybe the market continues higher. Perhaps it doesn't. It doesn't matter because the 5% are not shaped by the outcome, they are shaped by their continuous process. They understand if they focus on the process, the outcome will take care of itself. “

I’m excited to continue the journey because now I know — “The Best Loser Wins!”

Reflection: Imagine where you will be — by managing your risk and emotions?

See you at the top!
―――

I don’t know exactly where you are on your journey, but I share words of encouragement, lessons learned, and ideas to help you grow your business.

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❤ Rudy

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Thank you for taking the time to read today's TechPreneur Newsletter. I hope the information was helpful and inspiring. As always, I'm here to support you in your business journey, so please don't hesitate to reach out to me on Twitter at @rudybanx Keep striving for success!

Until next time!

~Rudy

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