Understanding Losing Behavior
In trading, there are times when you feel like you “should be winning based on probability,” yet losses keep piling up.
Upon reflection, I realized that I wasn’t consistently repeating the same trades. Instead, I was making entries based on vague reasoning, such as “I lost last time, so I should win this time” or “This pattern should work.” In reality, these were simply excuses driven by my desire to enter trades.
Even with a win rate around 50%, a streak of 8–10 consecutive losses is statistically possible. However, after each loss, I would approach the next entry with misplaced confidence, believing there was a 70–80% chance of winning.
While knowing when to step on the accelerator (enter a trade) and when to hit the brakes (hold back) is crucial, I realized that I often wasn’t fully aware of where I was starting from each time.
Self-Analysis
Here’s a summary of my self-analysis:
| Item | Analysis |
|---|---|
| Belief that the next trade after a loss has a 70–80% win probability. | Since I wasn’t consistently entering in the same situations, I couldn’t even determine if the entry points had a true 50% win probability. |
| Why do I lose more than probability suggests? | I tended to increase lot sizes out of frustration during losing streaks. |
| Are chart patterns truly effective? | I blindly trusted the idea that “chart patterns inherently have an edge” without verifying it myself. If the chart pattern is flipped vertically, the results could reverse. My interpretations were often conveniently biased based on outcomes. |
| Are chart patterns truly effective? | While it’s said that following higher timeframe trends creates stability, I couldn’t adapt when signals from higher timeframes contradicted each other. |
| Breakouts and Sudden Price Movements | I had an unfounded belief that jumping in during sudden price movements would lead to wins. |
| Previous Highs and Lows | I assumed, without evidence, that if I entered a trade, the price would reach the previous high or low. |