Anyone who analyzes his trading results will notice that profits always occur in clusters. The same is also true for losses. Of course, there are times when profits and losses are in balance. The trader can then be overcome by a feeling of futility in his “labor of love.” Why do profits not occur evenly: Winner - Loser - Winner - Loser - Winner - Loser, etc.?
Many traders make more profit than loss specifically at times when the market action fits well with their strategy. When this happens, it’s as if everything works by itself, and any difficulties from before are forgotten.
This phenomenon can be systematized or even exploited to some extent. Experienced traders start to work this way instinctively. When they get the feeling that the "market is good," they trade more intensively. On the other hand, when they get the opposite feeling, they reduce their number of trades or even do nothing. For a beginner this may sound a bit obscure, but this is how good trading works.
This is also an important argument against fully automated trading. The computer does not know when the market is "good." It happily continues to produce signals or accumulate losses without a second thought.
And now a second aspect comes into play, which is possibly even more important than observing market cycles: Experienced traders increase their bets "when they are good."
When they are not, they drastically reduce their position sizes. The result of this is that they may make most of their money in short periods of time. This might be in the first hour after important economic news, for example, or in very volatile times.
The Corona crash is a good example. In such periods, good traders can make a small fortune.
In such times I often have one winner after another. And not infrequently I have traded with 3 to 5 times the usual position size. Sometimes in just a couple of hours the whole profit of a week, or even a month, comes together.
The person who knows when to make big bets, but who also understands how to "keep the ball flat" at the other, less favorable times, has, in my opinion, a very good chance to succeed on the stock market.
He traded for a hedge fund and then went on his own. He specializes in scalping and fast day trading. His scalping book "Scalping Is Fun!" is an international bestseller and has been sold more than 30.000 times. His books have been translated into 11 languages.
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