Here’s why trading is so challenging:
- You can back test a system as much as you want. But we can determine the profitability of the system by market conditions, not past price history, once you start trading it. What appears to be a winning strategy on paper can turn out to be a losing strategy after a string of losses.
- When you’re waiting for a pullback to buy, it doesn’t always happen until the trend is over.
- For a long time, every momentum signal you buy may be a loser.
- Many times, the market throws you into a position you don’t understand for no apparent reason.
- Your largest position sizes are sometimes losing trades, while your smallest position sizes are winning trades.
- There is no such thing as a ‘market,’ and you are trading against a herd of people who are all making decisions for a variety of reasons that are unpredictable.
- When you’re trading in and out of straight up bull markets, it’s easy to feel foolish for underperforming buy and holders.
- Some trading lessons can’t be taught; they must be learned through practice with real money.
- Not because a trader is the smartest, but because they are the most flexible and adaptable.
- Money is made and kept based on the math of probabilities, risk, and reward.
Thanks for reading Why Trading Is So Challenging.