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Trading Education Posted by Team Topstep March 4, 2021

5 Ways To Keep Your Winners From Becoming One Hit Wonders

Keyboark with Padlock

By: FairValueTrader

I found myself having a conversation with a fellow trader this week about our most memorable and profitable trades. For me, it was more than ten years ago now; I took an options trade on a stock based on the recommendation of a friend on the NYSE floor. Within two weeks, this options position had increased by 1,350%, giving me a nice boost. Since that time, I have become a more successful trader but have never come close to repeating that kind of gain, even though this NYSE friend told me how to pick the stocks and options to make those trades. 

However, that gain was an anomaly; it had me reflect on how many traders I have encountered over the years with “one-hit wonders” that never materialized into further success. 

You know how you look back to ten or twenty years ago, or even longer, and there was a popular song at the time? Reflecting backward years later, you ask, whatever happened to that group? At the moment, the song was at the top of the charts; however, the singer or group could never convert that into long-term success.

Or, sometimes, this is observed in sports. A player will suddenly rise to All-Star status having a career season only to fail ever to meet that level of athletic success again. These, we sometimes call “one-hit wonders,” and this applies to trading as well. 

An Amusing Anecdote

Here is a true story; five years ago, I knew a guy who had been working to develop his forex trading skills for a few years. All of a sudden, he hit a stroke of luck that was unbelievable. He took $200 out of his paycheck one Friday to place in his trading account. The following week, he found a sweet spot in the markets, began to place trades, and pyramid winners to the extent that he had converted that $200 into $5,000. I’ll never forget when he called me and later showed me his verified trades. He was on top of the world, thinking he had found the secrets to long-term success, and I wished him well. 

After another week, I reached out to this same trader, hoping that he had another round of good results. Instead, what I heard was disappointing. This trader had gone all-in after his big week with the $5,000 profit and managed with the confidence generated the previous week to convert that money into a zero balance. Sure, he was embarrassed and ashamed, especially when he was asking me for a loan. 

Now, years later, he is in a different circumstance in life, and we sometimes revisit those volatile two weeks he endured, and I believe he is content to know that both experiences were a “one-hit-wonder.” 

The Psychology Behind Winning Trades

Marty Schwartz, the famous “PitBull,” said that the most significant losers typically follow the biggest gainers. There are many reasons why this may be, perhaps its volatility which caused the winner, creating a vulnerability to take it back away. 

However, the real reason why I believe PitBull’s observations are valid is because of psychology. There are specific physical and emotional responses that come after a considerable winning trade. I once knew a trader in the final thirty minutes of a Friday trading session, was able to earn about $30,000, about ⅓ of what he made on an annual basis.

This trader told me that he had a physical reaction that made it difficult for his body adrenaline to settle down. He spent the entire weekend with an excitable nervousness, waiting for markets to open to make more money. To feed his physical response, he decided to gamble on sports. 

In the end, he was able to take time off to rebalance himself physically; however, not everyone is so fortunate. Some will turn around and lose their money on the next trade, while others will develop harmful habits and addictions to re-create the feelings of excitement.

5 Ways To Prevent One Hit Wonders

Today, I want to briefly outline some good reactions to having your big winning trade focusing on longevity, being able to remain in the game, and survive for the long-term.

Congratulate Yourself

There is nothing like a job that’s well done. Even if you were lucky, results are still beneficial. There is nothing wrong with being happy and celebrating in modest terms. There are many opportunities to kick yourself in trading, and if you can’t healthily process the good times, you won’t be able to work through the hard times either. 

Stay in a Routine

Successful, long-term traders have many things in common. One key attribute is a dedicated routine. When wins or losses are at levels that are outside our norm, we tend to breach our habits. However, suppose you enjoy the considerable winning trade. In that case, the worse thing you can do is break your routine, whether it be exercising differently, working less by not looking at charts, or even sleeping later.

Avoid Overconfidence

It is tempting for any of us, after the vast winner, to feel too good about ourselves and to overestimate our skills while underestimating luck. Overconfidence will ultimately kill all your confidence because it will lead to huge mistakes once you falsely believe your touch turns to gold. Perhaps the most effective way to avoid overconfidence is by analyzing your big winner critically. In other words, one question is in what ways could you have improved the trade. Another way of critical assessment is to determine what you might have done wrongly. An unusual winner may often result in an extraordinary risk taken, either in size or trading in volatile periods. If you can identify these attributes, it will help to remain humble. 

Channel Confidence Appropriately

What do I mean by this? Even though you avoid overconfidence, it is still necessary to build your confidence in healthy and appropriate ways. The practical way to do this as a trader is to analyze your success critically. In addition to determining what you could have done better, it is also evaluating what you did right, and most importantly, how to repeat this. Some trades you just can’t duplicate, while there may be principles behind others that can be repeated at other times. 

Don’t Increase Risk!

To the greedy side of humanity, perhaps the most natural instinct as a response to the big winner is to increase risk by taking on more size or widening your stop loss. Either of these breaks the second rule, but this still deserved its own category. I cannot tell you how many times I’ve seen a trader take a wonderful day and ruin it because they are guilty of this advice; in fact, I’ve been guilty of it multiple times myself. 

Another way traders add to risk after big winners are by lessening their criteria for the next trade because of some psychological response to winners. Remember, good times release endorphins into the body that act almost like a drug and cause us to feel and even think differently. It’s a brutal reality that after a successful trade, the endorphins in our body cause us to believe that it will last because we are on top of the world.


Remember, I’m using one-hit-wonder broadly; it may apply to one trade, one day, or any specific period that had produced exceptional results. From the movie “Flight of the Intruder,” one of the commanding officers tells a pilot that “half the time, it isn’t the mission you’re flying that kills you, it’s the one before.” The same is true for trading. When things go wrong, it’s not limited to the current set of trades, but there is often a pattern that could be detected, even in prosperous times, that would indicate potential harm to come. 

With these five rules, you are much more prepared to process your next big winner in a way to enjoy long-term success and not fall victim to the one-hit-wonder.

Trade well!