This past Saturday, I attended a trading event
here in Chicago put on by TD Ameritrade.
The event was about a mile away from where I live.
One thing I’ve learned is that you need to be
humble and willing to keep learning no matter what
level you’re at.
While walking around the event, I heard one of the
experts tell one of the investors, “it’s about
limiting your bad trades” in response to his
It was tough to bite my tongue, but I did.
While this may sound like good advice and
something you’ve heard before, I don’t think the
guy explained it well enough.
Of course, we would all love to erase our bad
trades or investments.
If we knew they would lose money after the fact,
we would have avoided them.
However, life doesn’t work that way.
So many teach investors to focus on eliminating
the losing trades, which is entirely the wrong
thing to focus on.
It’s like telling a professional basketball, don’t
miss the basket.
No shit, Sherlock!
I refer to this as playing not to lose instead of
playing to win, which so many traders and
As I said before, I can show you how you can have
90% winning options trades.
I can also show you how to have high reward
options trades with only 10% chance of success.
However, that doesn’t mean you’ll be able to make
Probabilities don’t equal profitability.
It’s part of the equation, but it’s about being
strategic, disciplined and managing risk before
and after entry.
When you’re not consistent with your approach, you
will see inconsistent results which are due to
Losing trades are not avoidable; they should be
That is why focusing on predetermined outcomes can
provide context on expectations, which means you
have an idea on the probability of success a trade
could have and also an expectation of a possible
You manage your max loss before entry, not during.
It’s easy to have a high winning percentage
trading options, but it’s hard to keep your ego in
check and stay consistent to avoid the mistakes
that end up costing you big time.
I wrote a book that focuses on this very topic
with specifics on how you can start to become more
consistent and predictable with results.
If you haven’t picked it up yet, what are you
To your wealth, freedom and options!