The Coin Flip

A losing trade can have a very adverse effect on a trader’s mood, because the trader thinks that the losing trade reflects how well he “feels” the market. A loss results in sadness, whereas a win brings joy.  This emotional rollercoaster can drive the trader to “burn out” in a matter of 5-8 years. But consider this:

The result of any single trade is no different to the result of a coin flip, and it has absolutely nothing to do with one’s intellectual abilities.

What is really important is that after 100 coin flips (or financial trades) you have a net gain rather than a loss.