Have you ever wondered how there can be so many different styles of traders and they follow their method sometimes with a religious fervor? Many believe that only their way is the right way. A weird thing is that many seem to make money in the long term even though they disagree with each other. There are Swing traders, Trend Followers, Can Slimmers, Fibonacci traders, Gann traders, Elliot Wavers, day traders, chart pattern traders, etc. and there are representatives from all these camps that are profitable and swear by their style. It has amazed me that sometimes we are all taking the same positions but from different signals from our own methods, we are letting the winner run, but for different reasons. We all make money, but follow different trading plans.
How can this be?
The real secret to making money in the markets is simply by having bigger winners than losses. A robust system may only have a 50/50 win rate but the half that are winners are much bigger than the other half that are losers. That is the key to winning at trading, not stock picking, not some secret formula that will get you in at the bottom and out at the top. Winning traders simply have small losses when they are wrong and big wins when they are right. They don’t have to be right every time they just have to be right big and wrong small. It makes no difference what method you use to achieve this you just have to be consistent in your method once you have found a winning one.