Difference Between Winning Traders And Losing Traders.

If only 10% of traders actually win.

That means they are clearly doing something that most people are not.

So, it's about how and what they are doing that is making them stand out from everybody else compared to the losing traders.

The answer is that they are thinking differently.

So how do they think differently?

I will tell you how.

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The average trader spends most of their time looking at charts, markets, patterns, and trading strategies.

They are often fixated on finding the next 'big winning trade'.

In contrast, profitable traders shift their focus to a different approach.

They prioritize their trading performance, acknowledging that having a successful strategy is not particularly challenging.

They understand that, if they apply the right strategy in the appropriate market at the correct time, profits will follow.

Profitable traders assess their past performance, constantly seeking ways to enhance it on both the trade and micro levels.

They analyze their emotions, execution quality, timing, adherence to rules, and discipline. 

They work diligently on improving their discipline, mindset, psychology, and overall trading performance, as well as reviewing their trading history in detail.

These traders consistently ask themselves questions like:

• "Am I executing trades correctly?"
• "Should I increase or decrease my position size?"
• "When should I make adjustments to my trading approach?"

Why do they do this?

Because they recognize that these aspects are vital pieces of the trading puzzle. Your next trade, which occupies most of your thoughts, is just a small part of the larger picture. 

To draw a simplistic analogy, consider a pie chart.

Your next trade is only a small segment of the entire pie. The other, larger segments represent your discipline, mindset, approach, and whether you're doing everything correctly.

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The crucial point here is that trading success isn't primarily about finding the next trade.

It's about making the RIGHT trade with the right size to maximize your profits.

When in a losing streak you adjust and manage risk so that you don't erode your capital.

These elements are far more influential in determining your overall profitability compared to simply chasing the next big winner.

Many traders make the mistake of obsessing over their next trade, whereas profitable traders understand the broader context and focus on what truly matters.

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This next point is a crucial once – PATIENCE.

There is 2 aspects to this, from a 'Trade level' and from an 'Account level'.

From a trade level, they are patient for the trades to work. 

They've got the trade on, and they let it work, let it mature, whatever it may be. 

Just sit with it.

They know that they've got to stick to the rules, let it play out.

Yes, if there's a reason on the chart that says it doesn't work after a certain period of time, they'll cut it, of course, but they're patient to let the trade and the strategy run out.

They trust themselves!

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Then, from an account level, this is probably the MORE important one.

They know that they don't focus on the next winning trade, the next two winning trades, or the next ten trades, whatever. 

They focus on doing the right thing and knowing that if they stick to the process of what they're trying to achieve, then the account growth will happen.

They'll have steady growth, and they'll have a boost where things fall into line.

• They know that they've got strategies to protect drawdown. 
• They know that over time, that account growth will happen.
• They're not looking to boost their account by a thousand percent in a month.

They know that if they work on the right things and consistently work on the right things.

And if they put effort into the things that matter they'll see the rewards.

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That brings me to my next point.

PROCESS. 

They have a distinct process they're employing. It's like having standard operating procedures for each aspect of a business. 

Whether you're running a restaurant or a recruitment firm, you have standard procedures for each part of the business. 

It's the same with traders. 

The traders who are at the top of their game have a process in place for finding new strategies.

• They have a process in place for what they do when they're in a drawdown.
• They have a process for finding actual trades to execute or filtering their trades.
• They have a process for what they do before they place their trades or a process for adjusting their position sizes.

All these things are little processes that, when built together, form a ELITE trading business.

Instead of looking at the whole thing and saying it's not working, it's not working, they can identify which part isn't working and focus on making that part better.

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The last thing I have for you is being AWARE.

You should have noticed that all these points are all very similar, and there's a synergy between them.

They are aware of which part of their trading isn't performing and which part is performing well.

• It comes back to having processes for each individual part of the trading business.
• It comes back to having patience and knowing that they have to let things play out.
• It also comes back to what they're focused on.

They're not spending time looking for the next trade; they're spending time being aware of what's causing growth in their P&L and what's causing a decline.

• Is there a pattern? 
• Is there something that can be worked on or improved?

Because next to trading, there's a part of the puzzle.

You see, you could stick with your existing trades, cut off the majority of your losses, and boost your size on your winners.

Suddenly, you'll see a turnaround in your P&L. 

These are the good things that profitable traders do in the market that losing traders don't.

So prioritize them.

I will see you at the next post.

@ionicXBT