Apr 3, 2017

How To Think About Trading Losses

"Even the most successful traders encounter their periods of loss. How they manage the losses — and how they manage themselves during the periods of loss - makes a huge difference in terms of their ability to come back."
—Brett Steenbarger, author of Trading Psychology 2.0

"Most studies suggest that losses are twice as powerful, psychologically, as gains."
—Daniel Kahneman, author of Thinking, Fast and Slow

"What winning traders share: they all understand that losing is part of the game, and they have all learned to lose."
—Jack D. Schwager, author of Market Wizards

When traders are in a trade, they tend to narrow their focus. The only thing a trader tends to think about is the outcome of the trade he or she is in right now. This is especially true if the trade is losing money. The trader’s instincts will try everything to keep that trade from being a loser. The trader may add up, average down the trade, temporarily remove the stop, widen the stop, or just stay away from the price action for a couple of days to give the trade some room to breathe. I have seen all these tricks among traders, both novice and experienced. But traders should not be worried about losing money. You win some; you lose some. It’s the bottom line that counts. 

Traders may lose money, but what they cannot lose is their trading discipline, as it is one of the fundamental assets of any trader. All traders must have confidence in themselves. All traders must believe in the deepest sense that they will do what is best for their own interest all the time, and that is to play according to the predefined plan.

You will follow practical steps and acquire the essential skills a successful trader must have in order to consistently win, and you'll also learn:

- how to develop a trading system
- how to utilize the best trading techniques within a trading methodology
- how to think about the psychological aspects of trading and the markets
- how vital it is to treat trading like a business

As you master this breakthrough program, you'll build yourself a distinctive trading signature.

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