The Lesson That Turned My Trading Around

Introduction

I was on a call recently with a new trader, and he asked me what the biggest turning point in my trading was. Without even thinking, the answer came out:

“I stopped adding to losing positions and only added to winners.”

It sounds simple, but that shift completely changed the way I trade.

The Old Habit: Adding to Losers

For a long time, I thought “averaging down” was smart. If a trade went against me, I’d add more size thinking I’d get a better average and catch the bounce. Every once in a while, it worked — which is the worst thing that can happen, because it tricks you into believing the habit is sustainable.

But over time, the damage piled up. Small red trades turned into big red trades. I’d blow up good weeks with one bad decision. And most importantly, I wasn’t respecting risk.

The Mindset Shift

The real breakthrough came when I flipped that logic on its head. Instead of rewarding bad trades, I made a rule: I only add when the trade is working.

• If I’m right, the market proves it by moving in my direction.

• That’s when I’ve earned the right to add size.

• If I’m wrong, I cut it for a small loss and move on.

This small change took me from fighting the market to flowing with it.

Why It Matters

Adding to winners builds confidence and compounds edge. Adding to losers compounds mistakes.

When you add to a loser, you’re essentially betting against your stop, against your plan, and against the market. But when you add to a winner, you’re leaning into momentum and letting the market prove you right.

The Takeaway

If there’s one thing I’d tell any new trader, it’s this: Stop digging deeper holes. Trade from strength or as I like to call it, be in the driver seat. The market will give you plenty of chances to be wrong — the key is keeping those losses small so that when you’re right, you can press and let your edge do the heavy lifting.