This is perhaps the most important psychological factor that explains why most people fail in trading and unable to sustain in this business.
It is probably the proudest moment in your life if you were able to predict the market movement, make money when all your friends and the majority of the people lose money. Hence it is not surprising why most people keep searching for a “best method” that able to predict the market and higher return. The fact is even you have a winning strategy you will not know the outcome of your next trade. Unless your strategy is 100% winning rate.
Let’s face it, do you think there is a strategy that will have a 100% winning rate without losing trades with more than 10 years track record? The truth is you do not need to have a perfect strategy to make money consistently in the market. It is about having a decent strategy with the solid principle behind it.
In a series of winning trades, it makes traders feel they can predict the market thus create ego and greed. In a series of losing trades, it will create self-doubt and fear. As you can see trading is full of emotions.
Successful traders understood this and overcome this. A probability-based strategy which gives you all statistics and fact will help compare to a subjective trading strategy, which you often heard you need the experience to learn this. Hopefully, by understanding this you will not get over-excited or demotivated on your next trade and able to select a strategy that will focus on consistently and learnability rather than just high return