Well trading is 30% strategy, 70% psychology. My advice- try analyzing the trades on which you have lost money. You will get your answers. Its easy to read and understand strategy- Its difficult to apply.
I will give you an example- Lets assume a novice entering a trade without analysis but what he does is place equal S/L and T/P. Now its not difficult to guess that if he is not risking too much capital on a single trade (following 2% risk per trade) there is good chance that he will always be at break even. Profits would be equal to losses.
Strategy gives an advantage here, every % increment in win % decreases lose % by equal number. Your chances of winning increasing by 1 % puts you 51:49 win lose bracket, good enough to make money, Right. But there is a catch there- Human psychology (remember 70%
). We tend to close winning trades at a slightest of profit and let our loses go big thinking price will come back. What we are looking for is a 100% win record which is not possible. We should be ready to accept losses. Quoting " Take care of your losses, profit will take care for themselves automatically", well if you are not loosing too much- YOU ARE WINNING
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