In trading, success is never due to one thing, but failure often is.
Have too large a stop loss? You end up losing more capital than you gain.
Have too small a stop loss? You end up taking too many losing trades.
Have too big a profit target? You end up with too few winning trades.
Have too small a profit target? Your profits won’t be enough to cover your losses.
Trade without an edge? Losing is only a matter of time.
Trade too large? You end up losing even if you have a winning strategy.
Trade too small? Your returns aren’t worth the effort.
Can’t stick to your trading rules? Losing is inevitable.
Don’t know when to break the rules? One unlucky event can kill your account.
Didn’t notice a change in market conditions? Your winning strategy becomes a losing one.
The list goes on and on.
All failure requires is a single weak point.
With so many ways to lose, the default outcome of trading is, unsurprisingly, failure.
Success is the exception, not the norm.
So how do we win?
We win by failing so many times that we become a master of failure.
Once we understand all the different ways we can lose, the only paths that remain are the winning ones.