Why are trading gurus always telling us to pore over our trading tickets and analyze our trading mistakes? Bullshit! Seriously, you should have a plan and a tested hypothesis before you ever make a trade. If you gotta look back at your trades to figure out what you did wrong, the thing you did wrong was trading in the first place. Don’t be an idiot. If you’re an idiot, come to grips with it and don’t be a trader.
Someone recently asked me about an options strategy called an iron condor. My response was, since it takes four positions to construct the trade, you’re paying four times the commission, and covering the spread four times. Therefore, you have four times the costs to overcome before you ever make a dime. It’s akin to taking the worst odds on the craps table. The best odds in craps is also the most boring bet. You think maybe they built the table that way on purpose?
Have a plan, test it, be right more than you’re wrong, or make more money when you’re right than you lose when your wrong. It’s that simple. Pretty much everything else is craps.
I’ve got this stuck in my head: “Mammas don’t let your babies grow up to be brokers”, to the Waylon and Willie tune Mommas Don’t Let Your Babies Grow Up to Be Cowboys.
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