🎯Best Loser Wins - Why Normal Thinking Never Wins the Trading Game
The Holy Grail of Trading
Hey Team,
I’m sitting on the beach reading the book Best Loser Wins, and would like to share my key takeaways with you.
The author Tom Hougaard combed through brokerage data on retail trader behavior, and his findings were as follows
The majority of retail traders had a win rate above 50%, but still managed to lose money
The majority of retail traders held losing trades longer than winning trades
The majority of retail traders added to losing positions, but rarely added to winning ones
If most retail traders lose money due to holding onto their losing trades and adding to them, then how can we become winning traders?
By cutting losers faster, and not adding to our losing trades!!!!
The biggest losing trade I had so far this year was in NVDA puts, and I doubled and even tripled down on this trade. I’m eliminating this double down strategy from my playbook 👍
Hope you all have a great week on the desk. I’ll be back in action on 8/3.
-Andrew
