Do you only consider your trades successful when you make money from them or is it only when you’ve followed your strategy or plan regardless of the outcome? Maybe you have other gauges that you use to identify whether your trades are successful or not?
8 Likes
Great question!
Amateur poker players often consider their ‘hand’ to be the two starting cards in front of them and, as the game plays out perhaps, the five community cards that are gradually dealt after each round of betting (using Texas Hold ‘Em as an example).
More experienced players, however, understand that their ‘hand’ is so much more than that: What position were they in? How many chips did they have? Who else was in the hand and what position were they playing from? What were the relative stack sizes? How was the betting anticipated to play out compared to how it actually played out?
It’s much the same with trading. I’m guessing that unprofitable traders probably use money as their primary scorecard when it comes to judging whether a trade was successful or not. However, I suspect that most profitable traders, like myself, judge the success of their trades more broadly.
The first thing I think about is whether the trade was consistent with my trading plan. It usually is, I am a disciplined trader, but I’m only human. Occasionally I will consciously deviate from my plan. What is important is whether there was a good and justified reason for doing so.
If there was, the trade is a success regardless of whether I ultimately won or lost. If there wasn’t, I allowed irrationality to take over and I lost despite whatever my history tab suggests.
Next, I think about my risk management of the trade. I’m usually on point but there are sometimes practical reasons to prioritise certain actions over a thorough risk-assessment. I detest that sort of impulsive trading but it is sometimes a necessary evil. Again, what is important is whether there was a good and justified reason for my actions.
Another measure of whether a trade was successful might be how aware I was of whatever else was going on in the market during the time my trade was live. I might be shorting the dollar and score a nice home run, for example, completely oblivious to the fact that it was non-farm payrolls and I got lucky after some unexpectedly bad news out of the U.S. For me, that would be a huge fail regardless of the actual monetary result.
11 Likes
A successful trade is definitely one in which you follow your strategy. The decision to make the trade is not right or wrong, the outcome of the trade is irrelevant - as long as the strategy is good and the strategy was applied. This re-emphasises that every trade is a learning opportunity, not just the losers.
11 Likes
Good question. I would personally consider a trade successful if it hits my take profit or my stop loss. This would mean I’ve stuck to my plan and the trade executed as expected and within my risk management parameters, even if it was a loss.
4 Likes
When I experience a losing trade but manage to prevent going on tilt, I view myself as SUCCESSFUL for maintaining emotional stability under challenging circumstances. Winning trades tend to occur naturally in a trending market. However, when the market is F*** up, the key to success lies in effective self-management, ensuring that i do not obliterate my account on a single trade.
6 Likes
What I get from this is that if you follow your strategy one million times and lose one billion dollars in the process you consider all those trades successful. And here I was all this time believing that success meant achieving one’s objective. It is apparent that my definition of success is terribly flawed.
1 Like
You wilfully misunderstand. A trader should only be trading with a consistently profitable (long-term) strategy in the first place. A strategy that is not evidenced to be long-term profitable is not a strategy, it is just gambling.
5 Likes
You have not disproved anything I have written there. And for your information EVERY trade is a gamble.
Gambling, the betting or staking of something of value , with consciousness of risk and hope of gain
2 Likes
All trading is gambling in the sense that the outcome is unknown and contains two possibilities - win or lose.
But not all gambling is the same. Gambling on the roulette wheel or lottery is purely chance because the player can do nothing to affect the impact of the number which the ball selects: they lose big or they lose small, but there is no way to make yourself a consistent winner no matter how many times you play.
But trading is a different kind of gambling - in which, although the outcome cannot be predicted on every trade, but in which, over a large sample of trades, the trader can use skill and knowledge to affect the impact of the series.
I do not suggest that a successful trade is one in which the trader rigorously follows the rules of an unprofitable strategy, that would be stupid.
7 Likes
Trades cans only be viewed as successful in context of the overall strategy (method, money management, etc.)
4 Likes
Please lift the level of reasoning. You keep moving the goalposts and adding provisos AFTER it has been shown that your initial premise is flawed. I tell you all trading is gambling and your response is yes but or in the sense that. Trading is gambling…full stop.
Yor definition of a successful trade when I pointed out issues with it you then add something about being consistently profitable. Had you said that from the onset it would have sounded more credible. I dont know about you but as far as I am concerned a successful trade is one where I win. When an Olympian competes at the Olympics I am sure his form and time are far less important than winning his event. And I never suggested that all gambling is the same. For the record all that technical analysis, fundamental analysis, indicators and all the other strategies do is increase the odds of you winning.
2 Likes
Note to forum users -
Well, I suppose the original mistake was mine. I admit I did think that when I said it was important to follow the rules of a strategy, I assumed that nobody on the site would have thought I meant follow just any strategy, even one that is a guaranteed loser.
This was a stupid mistake which I have made. If any traders out there, especially the newbies, have taken what I said literally, that you should just pick a random strategy and follow the rules very precisely and that would mean your trades were successful, then I must apologise. Please note however that I reject financial liability and do not undertake to meet financial losses that might have been the result.
All I can say in my defence is that is if you selected a random strategy, and used it with real money, with no evidence of whether it is profitable or not, then you are very very stupid. In fact you would have to be so stupid that whatever had been posted, you would have found a way to lose money because of it.
Anyway, better luck next time, and I hope you enjoy greater success in your next business endeavour, whatever that may be.
1 Like
Sticking to my trading plan on every trade makes my trading consistent. However, individual trades can either be successful or unsuccessful depending on the outcome.
E.g
If I take a trade based on a setup that ticks all the boxes in my trading plan and win, that is a successful trade. However, if i lose, the trade was unsuccessful. I just move on to the next trade and take the same set up over and over again.
Overall I succeed in following my trading plan regardless of either a successful or unsuccessful trade.
NB For those who are debaters by nature, this is how I personally differentiate between successful and unsuccessful trades. Not how every trader should 
2 Likes
It is important to acknowledge that the ultimate goal of trading is to generate profit. However, defining what constitutes a successful trade can be subjective and vary between traders. While it is not recommended to be reckless in one’s approach, ultimately, success in trading is determined by producing positive results and winning, regardless of whether a trader followed their plan, rules, or strategy.
It should be noted, however, that cheating (disregarding the plan) in trading is not condoned and can have serious consequences. While the market may reward a trader who cheats and wins, it is not a sustainable approach to trading.
Ultimately, the market is the arbiter of whether a trade is successful or not, and a trader’s adherence to their plan or strategy may not necessarily dictate the outcome. However, it is still important for traders to have a clear plan and follow best practices to increase their chances of success over the long term.
That was all you needed to say. I dont know why everyone is trying to sound profound with throwing in everything else that was not asked. At times I have to wonder if this is all an orchestrated plot to draw me out and have me banned like that Silver fellow.
And for the record some of what you trotted out there below as conventional wisdom is not true in all cases.
“It is important to acknowledge that the ultimate goal of trading is to generate profit.”
Last time I checked when a manufacturing company like what we have here in Jamaica trades forex the ultimate goal is not to make a profit but to acquire funds to purchase raw materials for their business.
Well, it seems like you’re onto something here. Perhaps you’re right and there’s a secret plot to ban you, just like that Silver guy. But don’t worry, I won’t be part of it. Unless, of course, you refuse to share your secret trading strategies with me. In that case, all bets are off!
1 Like
Who’s the Silver guy? what happened there?
Say what? I didn’t know people on this forum could plot against each other. I mean what would one gain from having someone they don’t even know kicked out? I am so darn confused.
I would also like to know.