Trading is a game of accumulation
While many call trading a “game of probabilities,” I like to see it as a “game of accumulation.” This perspective can make it clearer what you really need to do
You think “game of probabilities” means the odds of winning any one trade in front of them. This leads them to focus on wins or losses, changing strategies after a few losses and missing the big picture—a large, consistent sample size crucial for probability-based success. Focusing solely on win rates also risks ignoring critical money management
Think of the game of probabilities differently: it’s an “accumulation game” through repeated trades. Trading is about three steps, retreating two; moving forward four steps, back one, and so on. To stay positive, you need both a sample size and sound money management
Here’s how I approach it in my own trading:
In my system, my worst-case scenario on a single trade is a loss of 1% of my capital, often even less. With a simple trend-following strategy and no fixed risk-reward, sometimes I lose 0.5% or 0.25%, or even break even. And when I profit, gains range from 1%, 2%, sometimes up to 10%
To put it simply:
• Losses range from -1 to 0, with a 40% probability
• Profits range from 0.1 to 10+, with a 60% probability
I know the dice I’m rolling, & as long as I stick to my own system, I don’t worry about losing my capital. My backtesting isn’t about winning individual trades but confirming that my capital accumulates positively over a large sample with solid money management
Recognizing this as an accumulation game, I’m able to focus on the long term, repeating trades throughout the year without worrying about immediate results. The key is understanding that sample size and money management lead to sustainable accumulation
If you find yourself giving up too soon, you may still be stuck in the win-loss mindset rather than thinking in terms of accumulation.
Instead of focusing on the win-loss probability of single trade, ask yourself if you can accumulate wealth across multiple trades.
