Dealing With Trading Losses
Stop moving the goalposts
You’re already down on the week and the day, but this trade looks good. You see it and pull the trigger, long at market.
The market starts to tick higher and you feel a sense of euphoria and mastery.
“See, I knew this thing was going higher, maybe I am a decent trader after all”
But then the market stalls and that candle starts to turn red. Just a small red body at first, and then more and more and more.
Anger starts to swell inside of you. “Why is this happening?”
The candle closes and the next one opens, it starts building a small green body. But a few seconds later price falls lower and the candle just keeps getting deeper and deeper.
You’re eyeing up that stop, it’s getting close now…
Nothing else is on your mind except the price and how close it is to your stop. You see nothing else but that. Your whole worth as a trader seems to be staked on the outcome of this one trade.
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An instant wave of frustration, anger, and sadness flood your body
If you’re in charge of your emotions, you take that cue to walk away from the screens.
If not, you start to scan for the next deal, the next trade that might ‘get you back to break even.
That’s because all traders go through this to some extent or another. It stems from the misconception that each losing trade is moving you further and further away from your goal. Every losing trade, day, or week feels like that goal has moved further away again.
Nothing could be further from the truth!
Each trade is a chance to learn, a chance to grow and a chance to improve. Whether that trade was a winner, loser, rule breaker or prime example of perfect discipline.
It moves you closer. But only if you let it.
Frame each loser and each setback as a positive
The trade is lost, and that can’t be undone. All you can do now is get the most from it. So use it to propel you forward.
Examine the good, the bad, and the random. Then move forwards, onto the next trade with a bit more experience and a few more calluses…
The Pursuit of Happyness
Here’s something a little bit different. It’s a movie called The Pursuit of Happyness.
It’s a story of a man who lost everything, was in a real mess and yet managed to turn it around.
Motivating and inspiring. It’s also based on a true story and has a small link to the markets!