W’s & L’s

I saw a tweet yesterday posted by one of the admins of a very large stocks trading group say that yesterday was the first day in over a year that he posted a red day. His loss was over 6 times the average salary in the US, and he took it on the chin like a champ.

We boast some gains online all the time, but let’s be real.

Even if you are the best trader on the planet and allegedly have not had a red day in over a year (salute!), it’s a bit irresponsible to throw that out there. All I see is brand new traders with a fresh stimmy ready to risk it all for the sake of some of those ultra green days.

As a trader (stocks or options) your very first job is to protect your capital. This means practicing proper risk management strategies that we discuss in our private server every day.

Your second job is to take high probability setups with a high risk-to-reward ratio (RRR or simply ‘R’) that will allow your capital to grow for you.

STB said it best. Normalize cutting shit early. Manage your risk. Be quick to cut the losers.

Part of this options trading game is taking L’s along with your W’s. It would be foolish to think that you are only going to have green days. I’m not saying it’s impossible. I’m saying that you should take your L’s gracefully, and just make sure your W’s outweigh your L’s.

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