Trading Failure

If you have read my blog posts from 15 March (Bearish), 19 March (Short Dow Futures), 19 March (Short Dollar Yen) and follow the market you will know that the last two trades I took (short USD Yen and short Dow Jones Futures) were both losing trades.

So let’s call a spade a spade – I failed in both of these trades.

My intention was to make money, and instead I lost money. I failed. But am I concerned? No!

Failure is a good thing.

You might wonder how I can say that, but every Failure is simply a stepping stone to success.

In my most successful trading year ever I achieved an annual return of 210.33% but my win-lose ratio was 187 losing trades verses 155 winning trades. I failed more times than I succeeded.

So why did I have such a good year, that year?

Because I cut my losers quickly and I let my gains run – as simple as that.

In these two recent losing trades, the total combined loss was less than 1% of my trading capital. I don’t need to be concerned about my small failures. You and I actually only need to be concerend about two things:

- big losing trades, and

- big winning trades (and how to hold on to the gains).

In life and in trading you fail over and over again. In fact the more you fail, the more you will win in the end. Let me show you what I mean:

Last summer our family went camping by a river with a big swimming hole and a long high rope swing. Most people swung out and dropped feet first into the river. But I was determined to do a full back flip. I failed over and over while I tried different techniques. I landed on my back, my ear (that hurt) and countless undignified big ugly splashes. But finally on the third day I mastered it. People even clapped when I did it. But it was only because I had failed again and again.

Do not be afraid of Trading Failure. It is simply a part of being a successful trader. More importantly every single losing trade is a learning opportunity.

If you want to do one thing TODAY that will radically improve your trading, look back over your last 20 losing trades and study them to see how and why you failed. Odds are that you will see a pattern or a reason you had not seen before. Imagine your profitability if you could eliminate the worst 10% of your trades!

Here are two links you should check out:

1. In my opinion the greatest trader alive today Paul Tudor Jones talks about Failure:


2. On my Lifestyle website I have a video and a webpage on Failure:


Yours for more successful trades, and less failures,

Oli Hille


“Creating the Perfect Trade”

No Comments »

RSS feed for comments on this post. TrackBack URL

Leave a Reply