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I have just finished ‘The Heretics of Finance“. It has struck me that there are so many approaches to making money in this trading game. Even among technicians the difference of opinion is rampant:

• Astrology doesn’t work - Yes it does!
• I wouldn’t pay a penny for Gann (Elliott) - I didn’t make money until I started using Gann (Elliott) .
• Traders make money in spite of their oscillators not because of them - Oscillators, used properly, are a great tool! etc, etc.

From what I have read of great traders and from my own observations, trading success depends less on the method you use and more on:

a consistent execution of your risk management and trade management plans.

Great traders know how to cut losses, know how to press the gas pedal when they believe they are right about a position, and know how to dig themselves out of a hole. Soros, Tudor Jones, etc have this quality.

This means as a newbie i.e. one who has not had at least two consecutive years of profitability, you’d be better off focusing your attention on learning to manage your position size and learning to consistently execute your strategies. This is easier said than done.

The old adage that good traders are unaffected by multiple losses has been shown by Armanesco to be incorrect. Multiple losses will affect our emotions - the trick is to not let the losses affect our behaviour. Between the stimulus and the response, there is a space. Use that space to accept and feel our emotions before acting.

This suggests, of course, that you should stop looking for that system, newsletter etc that promise few losses and guaranteed profits. Even if true, unless you learn consistent execution, and risk management, you will not succeed in the long run. The corollary is equally true: if you learn to execute consistently, and if you learn to manage your risk, success will be yours sooner than you expect.

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