One of the most important aspects of trading is the ability to accept losses. As we all know, trading in financial markets is a very risky business. And often, people just can not do this job and leave. The main reason for failure, as you already understood, is the inability to accept losses. If in a simple way, losses are unprofitable transactions, this is the receipt of stop losses (stop loss - a protective order). Nobody likes to lose money, I understand that very well, but losses in modern trading are an integral part of the trader's work. No losses in trade can not do. And therefore, in order to consistently make money in the market, you need to learn how to accept losses and move on.
In trading, it is not the one who loses the least who makes money, but the one who knows how to cope with losses and trade further. A good mood and the ability to lose will give you immunity in the future, which will help you in future earnings. Therefore, let's take a look at 3 steps with which you can cope with your losses.
The first step is to reduce losses
Whoever says anything, but one of the most effective tools against losses is to reduce profits. The first step is the key, and if you make informed decisions, you won’t have to use the second and third steps at all. Well, this is like a kind of early symptoms of the disease that are best treated immediately so that you don’t get sick later.
The first step includes 3 key points you should do:
Reduce losses:
Speaking of reducing the number of losses, I do not mean to remove all losses as such, since this is impossible. Just focus on your trading strategy and work clearly on the system. Discipline and a cold head are all you need. As you know, many traders in the course of their work, very often open extra trades (spontaneous). They need to be avoided, because, firstly, they spoil the statistics, and secondly, in most cases, such transactions are unprofitable.
Loss trades that you receive as a result of your trading in the system are nothing more than a planned oversight, and left-handed trades that are open to feeling are bad trades. Simply put, do not be silly - work on your own algorithm and everything will be fine.
Reduce your total loss:
Large losses greatly affect the overall result, agree. Often, traders, having received a series of unsuccessful transactions, try to recoup and open new adventurous transactions, which in most cases finish off traders. Therefore, never increase the size of a trading lot, just follow your system and follow the rules of money management, that is, money management.
Less emotion, more work.
Emotions are mental processes that reflect a subjective attitude to current situations. There are 6 main types of emotions:
Positive
Negative;
Neutral
Non-traditional;
Static
And dynamic.
Trading is a world of moods and emotions. If the mood is bullish, the market will grow if the bearish fall. The reaction to profit and loss, each person is different. Professionals who have been working on the market for more than 10 years have been trading almost without emotions, but beginners still succumb to them. Therefore, everything depends on the trader in the market, how he will react to the situation, and his trade will develop.
The second step is the response to the loss.
The ability to lose is one of the most important qualities of successful traders. It’s very difficult to put up with losses, everyone understands this very well. This is how the world works, such is human nature. Greed, a sense of fear and anger impede trade greatly. And the essence of trading is to control emotions during trading and to discipline, without this you will never learn to trade.
To control your emotions, you can use the Indian technique of crossing fingers. This is one of the simplest techniques, even Vladimir Vladimirovich Putin himself uses it. This technique allows you to keep calm and healthy thinking.
At the moment when the transaction is at a loss, usually traders have the thought: “Again, lose or again the market goes against me.” You can’t think like that, as Napoleon Hill said in his book “Think and Grow Rich” - thoughts are material.
Reduce your total loss:
Large losses greatly affect the overall result, agree. Often, traders, having received a series of unsuccessful transactions, try to recoup and open new adventurous transactions, which in most cases finish off traders. Therefore, never increase the size of a trading lot, just follow your system and follow the rules of money management, that is, money management.
Less emotion, more work.
Emotions are mental processes that reflect a subjective attitude to current situations. There are 6 main types of emotions:
Positive
Negative;
Neutral
Non-traditional;
Static
And dynamic.
Trading is a world of moods and emotions. If the mood is bullish, the market will grow if the bearish fall. The reaction to profit and loss, each person is different. Professionals who have been working on the market for more than 10 years have been trading almost without emotions, but beginners still succumb to them. Therefore, everything depends on the trader in the market, how he will react to the situation, and his trade will develop.
The second step is the response to the loss.
The ability to lose is one of the most important qualities of successful traders. It’s very difficult to put up with losses, everyone understands this very well. This is how the world works, such is human nature. Greed, a sense of fear and anger impede trade greatly. And the essence of trading is to control emotions during trading and to discipline, without this you will never learn to trade.
To control your emotions, you can use the Indian technique of crossing fingers. This is one of the simplest techniques, even Vladimir Vladimirovich Putin himself uses it. This technique allows you to keep calm and healthy thinking.
At the moment when the transaction is at a loss, usually traders have the thought: “Again, lose or again the market goes against me.” You can’t think like that, as Napoleon Hill said in his book “Think and Grow Rich” - thoughts are material.