Turning Your Trading Losses into Lessons
Trading losses are nothing new to seasoned traders, as they are everyday occurrences in Forex trading. Unfortunately, mistakes are an inevitable facet of it and if you don’t acknowledge them, you won’t be capable of improving your trades or become a consistently successful trader. Losing is a challenging task for many traders, both beginners, and professionals; if you trade more productively, you can swiftly take losses, move on and recoup your losses, plus more.
Described as the world’s most successful trader, George Soros, asserts that he is wealthy solely due to acknowledging his mistakes. Humans are risk-averse creatures; they scorn defeats like no other thing and would go to nearly any extent to stop facing them. Losses definitely hurt, and there’s a deep desire to persevere pleasure for the long term while avoiding such intense grief.
Traders deal with losses in multiple ways, most notably clinging on to a losing trade and hoping it will turn around before they start acknowledging it. From the famous book – The Disciplined Trader, Mark Douglas implies that you will close out losing trades only when you intuitively perceive that trade will be a losing one. So, the best way to do this is to have a clearly defined trading plan where you predefine when and where you will enter and exit a trade. Once you have a clearly defined strategic plan, you will execute the trade without skepticism. There is no room for subjective feelings, hesitation or self-doubt. If you concentrate on handling and monitoring the trade and adhere to the plan, you’ll be able to trade with ease.
Anticipating a loss is the only way to deal with it. Don’t be surprised. If you enter a trade where you plan for a loss, you will not be embarrassed if the trading results contradict your assumptions. If you disregard the prospect of losing, you can get incredibly depressed when you are in the middle of a losing trade. Accepting that defeats are the norm as opposed to an abnormality is far more beneficial because no guaranteed trading system can give you strings of victories.
Before entering any trade, it is crucial to recognize the patterns of possible losses. In contrast with your potential reward or benefit, define your potential loss or risk. It is also imperative that you don’t not take your defeat personally as it may hinder your trading performance.
If you as a trader put your reputation alongside your capital, you are particularly more prone to encounter extreme emotions. Instead of moving with those undesirable predicaments, you should embrace defeat, take swift action and a more light hearted approach. After doing so, you’ll shift your reality, and you soon realize that your losing trades are not an issue.
Trading entails taking losses, so Face It!!
Lamenting over losing trade is not an issue; the problem is how you deal with those setbacks.
If don’t let the setbacks bother you, you’ll be able to bounce back and make trade after trade to get out of that purgatory state. If you remain confused and horrified, you will give the losing trade more prominence than it deserves. As a result, get in the habit of simply accepting losses. With that positive mindset, sooner or later, you will trade more profitably in the long run or at least for a while.
Remember it’s NEVER a LOSS, it’s ALWAYS a LESSON!!