I've been rummaging through that Market Wizards book again (as I'm sure we all traders do from time to time) and came across the Larry Hite interview. A couple of sentences seemed to jump out at me a couple of nights ago.
"There are really four kinds of bets: good bets, bad bets, winning bets and losing bets. Most people think that a losing trade was a bad bet, That is absolutely wrong. You can lose money even on a good bet. If the odds on a bet are 50/50 and the pay off is $2 vesus a $1 risk, that is a good bet even if you lose".
It goes on a but this covers the gist of this particular Hite monologue. To me the most interesting sentences in this group were.
"There are really four kinds of bets: good bets, bad bets, winning bets and losing bets".
"You can lose money even on a good bet".
I of course know this but its the way in which he phrases it that it particularly pleasing (it's crudeness). In my head when I read these sentences back together I wanted to add to end "the only bet you need to avoid is the bad bet". On further thought I thought this could probably replace "you can lose money even on a good bet" So it reads...
"There are really four kinds of bets: good bets, bad bets, winning bets and losing bets. The only bet you need to avoid is the bad bet".
I actually haven't been taking terrible trades this week (one porker) and this quote helped remind me that I'm not doing as badly as I thought and even helped confirm/point to what I need to work on. My entries are okay. My trade management/discipline and reading price need work. And this is what I'm working on.
"There are really four kinds of bets: good bets, bad bets, winning bets and losing bets. Most people think that a losing trade was a bad bet, That is absolutely wrong. You can lose money even on a good bet. If the odds on a bet are 50/50 and the pay off is $2 vesus a $1 risk, that is a good bet even if you lose".
It goes on a but this covers the gist of this particular Hite monologue. To me the most interesting sentences in this group were.
"There are really four kinds of bets: good bets, bad bets, winning bets and losing bets".
"You can lose money even on a good bet".
I of course know this but its the way in which he phrases it that it particularly pleasing (it's crudeness). In my head when I read these sentences back together I wanted to add to end "the only bet you need to avoid is the bad bet". On further thought I thought this could probably replace "you can lose money even on a good bet" So it reads...
"There are really four kinds of bets: good bets, bad bets, winning bets and losing bets. The only bet you need to avoid is the bad bet".
I actually haven't been taking terrible trades this week (one porker) and this quote helped remind me that I'm not doing as badly as I thought and even helped confirm/point to what I need to work on. My entries are okay. My trade management/discipline and reading price need work. And this is what I'm working on.
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