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Well done SoulTrader, sound analysis and reasoning; very nice delivery.
It's a shame we have to suffer through stages 1 and 2 before the truth of money management overpowers an irrational lust for quick riches. Just as you stated, I also didn't want to believe it even when I KNEW it was true. It has taken me quite a while to come to the realization that "needing to score big to succeed" is not what defines a successful trader.
Limiting losses is in fact, the one true road to steady consistent profits. Learning to develop instinctive trade management skills in combination with an effective money management strategy is paramount. Both of course must be guided and controlled within a risk profile defined and understood by the trader. That's what keeps trading accounts solvent, and our emotions under control.
Overreaching on trades without a true understanding of the risks involved blows up accounts. Our emotions are often overpowering and harmful to our equity when we fail to develop and work our trades within a reasoned and traceable trading plan.
In my opinion, personal development of a strong and instinctive understanding of the building blocks of successful trading (i.e.. risk, leverage, lot sizing, S/L, money management, emotions), is the key-critical component for success.
Almost any indicator or trade triggering system can become profitable if a trader has the building blocks in place and his/her emotions under control. Learn to manage your trades with consideration of these basic factors, and level 5 is not too far away.
Success is yours to control.
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