That’s a great insight! Focusing on preserving capital can definitely lead to better long-term success. How do you manage the balance between protecting your capital and taking calculated risks when opportunities arise?
Hmm, that’s interesting perspective. See this is what optimism is about!!
Do you think there’s a point where focusing too much on avoiding losses could hold a trader back from taking necessary risks for larger gains?
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That sounds very logical and one would think there must be such a point.
In reality, though, maybe the people for whom that would realistically become an issue have already - effectively - been “excluded from the equation,” simply because they’re people who wouldn’t be trying to trade in the first place? Or many of them, anyway.
I don’t know, but certainly every successful trader I’ve ever known has clearly had an approach led by “avoiding losses”, never by “maximizing profits,” and I’m pretty sure that almost everyone I know who has tried and not become successful has had the opposite outlook (as most people probably do?).
That certainly seems to be the perspective of the expert authors on the subject, too (though I’d be the first to agree that that, in itself, doesn’t necessarily prove anything).
It’s an interesting subject.
I do take your point, completely, and there’s maybe something of an anomaly there, because you’d think “an optimistic outlook” can only ever help people to be successful? Maybe, in this context, “optimistic” means specifically “optimistic about not losing capital”? I don’t know!
What I know with certainty is that there are thousands of struggling traders who imagine that their difficulties and problems with trading are broadly “psychological” whereas in reality they simply don’t have a strategy with a proven edge (and I’d suggest, with almost as much confidence, that most of them probably don’t really understand what a proven edge is, or at least don’t actually know how to tell whether or not they really have one. And to be fair to them, that IS one of the hardest things for many people to learn!).
Don’t you think you are underestimating your trading abilities?
You and I joined the Babypips community during December 2017. Since then you must have improved your Forex trading and would have also acquired the required knowledge.
A good trader focuses on one market only, and understands it completely before heading to a different ones, meaning they have a decent understanding of that market and how the general mood of the market is and based on that they decide if they can engage in trading activities in that environment or not, anything else either than this is technical and mental aspects of the job which you can either learn or grow to control over time, but the real use of your experience is for the understanding that you will be gaining about that market.
That makes sense. It looks like the real challenge is in finding when the strategy is genuinely risky and not just a part of the proven strategy. I’m curious though, how do most traders evaluate if they have a proven edge or not?
I love learning from my mistakes that how i become a better trader!
cheers everyone and happy new year do have a wonder trading journey this year 
I think most traders don’t, because they don‘t really know how to. They guess. They trade on hope. They don’t really understand what “proven” means, in this context (and why would they? It’s a far from easy and very counter-intuitive subject, after all).
I think this is one of the main reasons why so very few people ever achieve steady profitability. Perhaps even the main reason.
There’s a channel on Youtube relatively well-known to forex traders in which multiple different trading systems/methods are tested - forward-tested, really, not back-tested - over 100 trades each(!!). It’s an absolutely dreadful, ridiculous, nonsensical channel and I’m not for a moment suggesting that anyone should look at it - but thousands do, and many/most of them come away from it with something that appeared to work well over 100 trades. Some of them imagine that that’s proof that “it works”. Some know slightly better than that and imagine that it’s “evidence” that it works. Some know slightly better again and think it’s “evidence” that it may work. Some don’t even attempt to distinguish between any of those categories but come away thinking something like “Well, it’s better to be trying something that appeared to work well over 100 trades than something that didn’t, isn’t it.”
It’s really difficult to help any of these people.
The said thing is that some/many do either the same thing or some kind of equivalent to that over and over and over again, and inevitably, eventually, come away thinking something like “Nothing really works. It’s all a scam.”
There’s a big, long, successful, interesting thread here at Babypips in which one of the methods used was one of those things tested over 100 trades by that Youtube channel and “shown“ to have an edge. Which indeed it may have done, over those 100 specific trades. It was also separately, independently, tested by a different Youtube channel which demonstrated pretty clearly over 10,000 trades that it (and some variations of it) actually had no edge at all.
No surprise. There are thousands of method like that. I’m not exaggerating. I really do mean thousands; not hundreds.
There are also huge numbers of forex traders who, while continuing to experiment and trade using stuff like this, are feverishly studying “psychology” in the belief that that’s what really makes the difference between the winners and the losers. These are mostly (not entirely - I’m not claiming that!) people who genuinely don’t quite appreciate, in the ways that matter, that however good their “psychology” is, if the system they’re using doesn’t have a genuine, proven edge to start with, they’re gradually going to lose money in the forex markets, just like almost everyone else.
The entire industry (I’m talking here about forex specifically, not trading in general!) is set up in such a way that most people lose most of their money, but slowly.
The big problem is that people don’t know how to tell whether or not they have an edge, and therefore don’t know whether or not they have an edge. And part of the reason for that is that they think that what really matters is (as claimed in the original post of this thread) that “ an identity comes a set of behaviors and perspectives that shape how you interact with the world” and loads of other such irrelevant nonsense. And as long as they carry on thinking that, and getting that and similar messages reinforced (and I don’t mean just at Babypips: it’s the same in other forums and in most places online), nobody can really help them much.
The only way to change that would be to try to re-educate a large proportion of them and get them to stop watching Youtube (after all, nobody who could actually trade with steady successes would be posting videos on Youtube!!) and start reading textbooks like Michael Harris’s Profitability and Systematic Trading. That would give them a chance. But rather you than I, in trying to persuade people to do that!
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Well explained, thanks!
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A good trader = Strategy + Sticking to it + Optimizing it.
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The real challenge is sticking to your strategy, especially when emotions and market noise get in the way, even if having a strategy is one thing. Success comes from trusting your plan and staying consistent!
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I hope I don’t sound dreadfully argumentative, but I really disagree with this perspective, and about as strongly as anyone can, really.
I think that the fact that so many people believe that is part of the problem, not part of the solution.
I think success comes from developing the ability to tell whether or not a plan has an edge (and that’s much, much more difficult to do than most people imagine). Most traders never actually do that, and that’s why most never become successful, in my opinion.
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I get your point,but for me ,success comes from sticking to a solid strategy,even when emotions or market noise get in the way. Having an edge is important,but consistency and trust in your plan are what really make the difference over time
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I don’t mean it rudely, John, but frankly this belief is just delusional.
It isn’t even debatable: it’s just factual that no matter how much “consistency” and “trust” you have in your plan, it can’t possibly ever make you profitable if it has no edge!! 
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I get what you’re saying and yeah,having an edge matters ,but even the best strategy won’t work if you don’t stick to it😉.
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Okay,so I thought trading was just about finding a good strategy and making money but it’s not .I’m realizing there’s a lot more to it. Do you guys agree?
Difficult question, actually, in a way!
I want to agree, and you could even perhaps say that it would be difficult to disagree, and yet … and yet … and yet … the problem, here, is that agreeing with it tends to lead to a discussion about the “lot more to it”.
And that can be really misleading for people who are learning, because in practice it necessarily focuses their attention on the less important aspects (with which they tend to be more comfortable), rather than helping them a little more actively and realistically by repeatedly drilling into them - even more or less to the exclusion of everything else at first - that they MUST start from a strategy that has a proven edge.
And that means knowing what a proven edge is, and how to tell whether or not what you’re doing has one.
And that’s really difficult for most people to learn!
But - especially in the early stages - anything else is just a distraction from that. And if people don’t focus on that first, and master it first, they’re just not going to be able to trade profitably for the long term.
And the long term is all that matters, in this game, isn’t it?
So this issue and how you approach it, and what you emphasize, are actually a pretty Big Deal in the overall scheme of things, you know?
Don’t lose sight of how right, and how important, what the Herring and our pink-hatted friend are saying is. Even though there’s a lot more to it, too.
Shifting your attention to the “whole lot more” without first mastering the edge components (no mean feat!) is a huge and very common mistake from which, in practice, very few people ever recover.
These things really do matter! 
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Okay, wow, that really makes sense! So, when I was thinking about all the other things in trading, it sounds like the first thing I need to figure out is a strategy that actually has a real shot at winning. And it sounds like that’s the big hurdle for newbies like us. Gotta focus on finding that “edge” first, and all the other stuff can wait. Thanks for the reality check!
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I agree that without a real edge, no amount of discipline or consistency will make a strategy profitable. Even traders can outperform their setups if they don’t manage risk properly. Risk management is part of the edge itself. And access to tools like backtesting can help not only develop an edge, but stick to it and refine it as conditions change.
@Fa_rees, totally agree! Risk management is a key part of having an edge. Even a good strategy can fail if you don’t manage your risks right. And yeah, playing around with backtesting tools really helps you find that edge and also makes it easier to trust your plan when things get rough.