"Trading is not a favorable game in most circumstances and that is what we must use as our assumption in trading. The big mistake made by traders is thinking and expecting trading to be a favorable game.
You have execution costs or slippage when getting in and out of a position as well as commissions as a cost factor to be subtracted from your winnings or added to your losses. The market spends much time in an unpredictable mode. Trends both short and long term do exist but not one hundred percent of the time.
The correct way to control positions is to only hold them once they prove to be correct. Let the market tell you your position is proven correct but never let the market tell you that your position is wrong. You as a good trader must always be in command of knowing and telling yourself when your position is bad.
The market will tell you when your position is a good one to hold. Most trader do the opposite of what is correct by removing positions only when proven wrong. Think about that. Your exposure and risk is much higher if you let the market prove you wrong instead of your actions removing positions systematically unless or until the market proves your position correct. "
Phantom of the Pits
