A Good Trade Defined

“Black and white photo of the street sign for Wall St in New York City” by Rick Tap on Unsplash

Good Trade Defined — When making trades and reviewing your positions, it is important to remember that the results of any 1 trade can be somewhat random.

I know that may seem crazy to some of you but there is simply no way any of us can know exactly which trades are going to be winners ahead of time…otherwise, we would never make the losing trades!

The important thing to remember is the analysis and the execution of your trades over time.

Nobody has all winners…how you handle the losers make a big difference in your performance.

Ideally, when taking a loss it not only frees up your cash, but it also frees your mind to move on to much better opportunities. Sometimes, we just need to move on and get the loser off the screen.

When taking a loss, it can still be a good trade…defined as: solid analysis and good execution (remember, they can’t all be winners…selling at a small loss can be a great trade…saving you from further losses and allowing you to re-deploy the capital in better ideas.

From now on…Change your definition of a good trade from “winner” to “solid analysis and execution.”

Jeff Farley

Trade in the Zone