The Cycles of a Trading Career: Successes and Failures

As a trader with almost four decades of experience, I’ve seen my fair share of ups and downs in the market. I’ve learned that it’s not always easy to predict when you’ll hit a winning streak and when you’ll fall into a losing cycle. But, I’ve come to accept that both are just a part of the trading journey.

During my good cycles, everything seems to come together. My timing is spot on, my decisions are confident and profits seem to flow effortlessly. However, the same can’t be said for the losing cycles. Despite my preparation and analysis, I find myself making the wrong moves at the wrong time, leaving me scratching my head and wondering what went wrong.

Despite these ups and downs, I’ve learned that I’m never as good as I think I am during the good cycles, and I’m never as bad as I feel during the bad cycles. The key to my success as a trader is acknowledging my fallibility and managing my risk accordingly.

I’ve always found that the pain of losing is a crucial reminder of my limitations. It keeps my ego in check and ensures that I don’t become overconfident. That’s why I always include a stop loss or limited-risk option strategy in my trade recommendations.

Over the years, I’ve made mistakes, just like any trader. But what sets me apart is my understanding of the importance of risk management. Without embracing the reality that losing trades are a normal part of the game, a trader will never be successful in the long run.

I’ve learned that being a winning trader requires accepting that being wrong is just a part of the game. For me, that means being wrong over 40% of the time. It’s important to understand that these ups and downs are not personal, but simply a result of market fluctuations.

During both good and bad cycles, it may feel as though some external force is guiding your every move, but it’s important to not let your emotions get the best of you. Whether I’m winning or losing, I make sure to keep my ego in check. I never allow my self-worth to be affected by a losing trade or let my ego be inflated by winning trades. Laughing at losses and learning from them is essential to long-term success.

As a trader, I relish the challenge of trying to predict market movements and structure trades that break even or generate profits, even when I’m wrong. This can be accomplished through smart use of options. But one of the biggest hurdles traders face is accepting and owning up to their mistakes. This doesn’t reflect a lack of skill or competency, but rather an ability to be brutally honest with oneself – an essential quality for long-term success.

During bad cycles, it can be difficult to identify why your instincts are not working as well as they usually do. But I’ve learned to quickly recognize when my timing and feel for the markets is off, and adjust my exposures accordingly. It’s important to remain patient and have the same level of analysis and preparation, regardless of whether you’re in or out of sync with the markets.

Since it started back in 1984, my trading journey has taken me through many assets, from foreign exchange to stocks, bonds, and commodities. Despite the variety of markets I've traded in, one thing remained constant – the cyclical nature of my performance.

When I was in sync with the markets, I was unbeatable. My instincts were sharp, my timing was impeccable, and profits seemed to come effortlessly. I always followed technical rules, conducted fundamental research, and upheld strict money management principles. But despite my best efforts, making money during the down cycles was next to impossible.

The frustration of losing was tempered by the joy of winning. And I've learned to take neither too personally. I care deeply about my trading, but I don't allow my trades to damage my self-worth or inflate my ego. Instead, I find ways to laugh about my losses and see them as a necessary part of the journey to long-term success.

Interestingly, my biggest wins never brought me a sense of ego satisfaction. They instead triggered a sense of gratitude and appreciation. I felt like I had been given a special gift – the ability to trade effortlessly and make significant profits.

Through all these cycles, I've learned to be patient with myself and the markets. I know that no matter how difficult the down cycles may be, they are temporary. If I remain disciplined and stick to my analysis and risk management principles, I will eventually regain my edge and find ways to generate excellent, risk-adjusted returns.