It's not an easy task but without it, you will not be able to survive!
By Markets Chimp
10/5/18 9:25 PM
Ramy Rashad, CMT
If you are a trader or trying to be, you have to prepare yourself for dealing with losses! One of the truths in the trading world is that YOU WILL DEFINITELY LOSE from time to time, you will do your analysis and you feel that you got the winning trade, you will execute it perfectly and wait to reap your profits, but the market always has a different opinion and he will slaps you on face telling you SORRY YOU ARE WRONG this time!
If you take it personally, if you start fighting the market and fighting yourself and if you start losing confidence, then the trading is not for you my friend! You have to learn how to deal with losses because losses will happen A LOT!
You must know that:
1. Losses are normal in trading because it's a zero-sum game; one trader is buying and the other is selling, so intuitively, one trader will be wrong!
2. You did your analysis but once you place your order in the market, the odds of success become 50/50, because no one knows what is going to happen next!
3. You must not be happy after making a win and also, most important, you should not be sad after making a loss! Teach yourself to completely take your emotions (all of them) out of the trading.
4. Making a loss must not affect your trading psychology (i.e., you should not blame yourself and you should not regret) because if that happens, these negative emotions will affect your next trade decision and if that happens you will make a loss again and again until you become a continuous loser! Making a loss is normal and will happen so face it with a smile :)
Instead of blaming yourself, learn from your past trades (bad before good ones) and always remember, if you have a trader's mind-set, if you are psychologically stable, only one trade will make a difference and get you back to the game, keep searching for it because it's out there waiting for the trader who is mentally strong!