Today's Quote: “Experience is one thing you can't get for nothing” Oscar Wilde

There are several good books out there about trading that should be on every trader’s must read list. If you were forced to choose one and only one, the only possible pick would be “Tools and Tactics for the Master Day Trader”. We are going to run a series of excerpts from the best selling book for the next series of lessons. Now in the words of the master trader himself, Oliver L. Velez…

WHEN LOSING BECOMES UNBEARABLE

At one of our most recent trading camps, a student of mine expressed a life-long dream to me in enthusiastic tones and euphoric pitches. Her passionate desire was to become a professional trader, one who derives her entire livelihood from the market. "But," she said, somewhat saddened by a sudden realization that came over her like a dark cloud, "I'm losing, Oliver, and I'm scared," "Why?” I asked. "Because each time I lose," she continued, "it takes me one step further away from realizing my big goal. I have to stop losing; otherwise I will have to give up this grand dream of mine. Help me, Oliver. My boat is sinking and I need help." I sat there, silent for a few minutes, my mind racing, groping, and searching for just the right words to say. How could I tell my friend that what was happening to her was the best thing that she could ever experience? How could I explain, without sounding like some maniac, that in order to be a winner, one must first experience being a talented loser?

Winning is always born out of losing. How many times have we all heard of the entrepreneur who struck it big only after failing time and time again? And doesn't the infant learn how to walk by first falling frequently for a time? As perverse and preposterous as it may sound, losing is the trader's ticket to the big time. It is the bridge that eventually gets him to that realm we call trading mastery. What many people fail to understand is that the desired state we call winning, the winner's circle, comes at a cost, a high cost. And truthfully, when it boils down to it, most are not willing to pay the price. Trading is not a game meant for everyone. That is why most have failed, and will always fail. It's only the ones who persevere, who last beyond the chronic period of losing, that have good odds of making it. Have you ever wondered why most of the best traders in the world were failures or mess-ups in other parts of their lives? They are good at trading because they have learned to deal with failing. They have learned to cope with it, use it. I did not manage to come back with some profound thought for my friend, but what I should have said was "good!"

George Bernard Shaw could not have been more right when he said, "You don't learn to hold your own in the world by standing on guard, but by being attacked and getting well hammered yourself.” Life for the beginning trader is the continual story of getting well hammered. But like the mighty trees in the forest that grow strong by resisting the wind, the traders who manage to rise each time they fall will experience a day when they stand tall and command the awe and respect of those who appreciate the magnificence of a winner. We want you to know that each loss you endure only strengthens you for the next. Every time you rise, we want you to know that you do so as a more enlightened soul. We have over 20 years of trading experience between us, and all those years has led us to the same truth that Seneca the Younger discovered many centuries ago. "We become wiser by adversity; prosperity experienced too soon destroys our appreciation of what is right."