Be A Great Loser By NetPicks Trade Systems
In it to win it! Without question, every single person reading this is trading to be a winner. After all, who enjoys losing in anything?
Sure, society has turned to participation medals just for showing up and it doesn't even matter if you actually gave any effort. In the end though, being number one is what it's all about and there is only one gold medal available.
Watch the sadness on the faces of players in the NFL who come second place in the Superbowl.
Look at the body positions of NHL players who end up watching the other team parade the Stanley Cup.
Looking at trading, you will either win/lose/draw and most people will say they love their winners but hate their losers. Trading losses not only means you were wrong on a particular trade (I will get to that) but it also took away the commodity we all need to place a trade: Money. When our account runs dry, so does our trading business.
This fear of losing money causes people to do silly things like cut great trades short or worse, talk themselves out of a legitimate trading opportunity.
Trading Losses Can Lead To Trading Success
Those traders who've succeeded on levels most only dream of may have different trading methods but one thing most have in common is: They embrace their trading losses.
They actually have become great losers! They do not fear the losses and in fact, the outcome of a singular trade is not something they really care about.
Losses are part of trading and they will come in random fashion regardless of any method or style of trading you do.
Side Note: Your trading system MUST have an edge.
You never truly know if this trade is going to win. You have the probability behind you (because you do have a trading edge) but in truth, you are never 100%. Accepting you will suffer trading losses multiple times in a sequence is one huge step to moving yourself into the realm of the chosen few who survive this rough and tumble world of online trading.
Look at each loss as the cost of doing business much like any business that must buy raw materials to manufacture goods. That loss will eventually lead to profits.
Understand though that accepting the outcome of any one trade with the attitude of "don't care" doesn't mean you can slack on the other aspects of trading.
You must stick to your trading plan
You must manage the risks of what you can control
You must shed hope and fear
Here's a question for you.
Variables have lined up according to your tested trading plan that signifies a trading opportunity. You get triggered into the trade and the outcome is a losing trade. Were you wrong?
Accept The Losing Trade Quickly
Accepting losses is just one part.
Accepting your losses quickly is another part.
When your trade is going against you and what got you into the trade is no longer present, get out. While many traders live on the hope that the trade will rebound, the others don't have that word in their vocabulary.
Hope has no place in trading.
There are times that price action is clear that the market direction is not going to be in your favor. If you have worked what adverse price action looks like into your trading plan, you must abide by your rule of exiting. After all, that is part of your edge as well, right?
You can't hear it enough. Take your losses. Love the losses because that exit….that proper exit…will save your trading account.
One other great thing about getting out of trades that are not going as planned is freeing of capital. If I am in a trade that is not performing, my capital is still tied up. By exiting something that is failing, I now free the capital to engage in another trade that is setting up according to plan.
There will be times when you exit and the price rebounds. Yes, that happens. The beauty of trading is that as long as you have capital and a signal to enter a trade, you can get back on board!
It's easy to write about trading losses but as the reader, you have to truly understand what that loss means and how it serves your overall goal of trading success.
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