"IT ONLY TAKES ONE!"
I’m calling bull shit on this saying. Sorry. I hear it all the time and it drives me nuts. Sure, I get the point. You technically only need one good trade to make your day, week, or month. I get the premise but come on…
Saying it only takes one makes Day Trading sound easy. Guess what? It’s the opposite of easy. It’s freakin’ hard! Where have you heard that before? HERE!
How often does this really happen to the average trader? How often do you find that perfect set-up, time your entry just right and ride it up perfectly? A lot of things need to happen and all line up at the same time in order to experience one of these trades. For newer and/or struggling traders this rarely happens. Usually when it does happen, it inflates your confidence and you quickly give that money right back.
Don’t get me wrong. I have great trades frequently. IDXG, RH, WTW, and OCUL come to mind in recent history. Of course, I’m thrilled when I “make my day” by hitting a home run. However, after that trade, you’ll NEVER hear me say SEE, that’s all you needed today! Chances are that’s NOT all you needed today and not all I needed either.
Why? Because Day Trading isn’t about one trade, one day, one week or even one month. It’s cumulative. It’s about being consistently profitable over the long haul – not days, weeks or months – but YEARS. It’s about showing up for work every day ready to find and take your piece of the pie. You never know how big of a piece you're going to get.
For this reason, I don’t have a daily monetary goal. Most traders will tell you their goal is $XXX.00 per day. $400 is the number you hear most frequently since that will bring you to just about six figures per year. Now, don’t get me wrong, I do have a number that I like to hit knowing how much $$$ I need to pay the bills. That number isn’t my goal though.
My daily goal: Follow all my rules and trade well.
Yep, that’s it. That’s what works for me. If I follow all my rules and trade well, the money will follow. It’s when I break the rules and/or do something stupid (NOT trade well) when the $$$ flows the other way.
When I’m trading well, I don’t stop. I keep trading. I take EVERY trade that meets all my parameters. I must do this! Why? Tomorrow I may trade like crap and/or the market may just not give me any set-ups that fit my criteria. I may not make any $$$ tomorrow. I may even lose $$$ tomorrow. Not knowing what tomorrow will bring, why should I stop today? Today things are working and the money is flowing IN. Today I’m taking a little bit bigger piece of that pie.
My thought process is I must give myself a cushion today because I have no idea what will happen tomorrow, or the next day… For all I know the entire pie is going to be thrown in my face tomorrow and then somehow punch me in the gut too. You never know. By the way and I’m going to talk about this in a future blog article, I think it’s exactly this thought process that can take a trader to the next level. This combined with a few other key things can take a trader from being consistently profitable to highly profitable. Stay tuned for that... Hint: one of the other things is consistency.
There are two other reason I dislike the phrase It Only Takes One:
1) It encourages trading too BIG.
2) It encourages UNDER trading.
Trading too BIG: If you have the mindset that all you need is that one trade today, you’re more than likely to size up too big. You’re looking for that home run so you take the next trade with way more shares than you’re comfortable with and should be trading. IF the trade works, congrats but you just taught yourself a bad habit. If the trade doesn’t work, you just lost a chunk of change and now it’s definitely going to take more than one trade just to get you back to even.
UNDER trading: This is something we talk about in our course but it doesn’t get discussed enough. When giving feedback on trade trackers, I find myself telling traders to trade MORE about three times as often as telling others to trade LESS. Too many traders are afraid to pull the trigger. They take a couple of trades every day but they don’t have the confidence to really go after it. Hearing it only takes one just reinforces under trading. You THINK it should only take one trade (ok maybe 2) to make $$$ so you’re afraid to trade more. You’ve convinced yourself you’re doing some wrong if you trade more.
Note: Please don’t get me wrong on this point. I do think many traders need to trade MORE, but not just any trades and any set-ups. You still must stick to your A+ Set-Ups and your rules 100% of the time. Trading more does NOT mean throwing your rules out the window and start playing darts. Stick to your process.
So, if you’re a newer and/or struggling trader or even a consistently profitable trader and you hear IT ONLY TAKES ONE, don’t buy the hype. You and I are going to need way more than one trade on any given day.
Before I go, there is one time I actually agree with this statement 110%. When someone states IT ONLY TAKES ONE to blow up your account. YES! In a split second, you can throw all your rules out the window, size up on a trade and have a WTF moment. That will do it! If you missed our webinar on this topic, please watch it here: $WTF!
Thanks for reading!
Questions? Comments? Reach out and/or leave a comment below!