Let’s face it, trading losses can be tough. Nobody likes to lose money. As all traders will learn sooner or later, trading losses are a routine part of the game. However, many traders find it difficult to accept inescapable trading losses.

When we cannot accept a loss

It is the ability to accept the occasional trading loss that can be a key factor in becoming a profitable trader or not. I’m not saying trading losses are encouraged; But how you handle losses can significantly affect your degree of trading success.

Refusing to tolerate and properly handle trades that don’t work leads directly to trading mistakes. It is the inability to deal with the inevitable trade loss that causes traders to interrupt winning trades, stop in the middle of a trade, hold on to losing trades, average down, and fail to pull the trigger on trades. solid business setups.

Learning to accept and deal with trading losses can be just as important as making good trades.

survival tips

Here are seven steps you can take to survive and even thrive when you experience loss:

  1. Record the operation as it occurred: Don’t sweep the loss under the rug! You need to learn from the loss (that’s its value), so write it down. Include how you viewed the market at the time and how the market action and its indicators seemed to meet the criteria for a strong trade setup.
  2. Evaluate trade: Once the trading day is over, go back to what you wrote and see what can be learned. Did you miss reading the market? Was there something you didn’t check? Did you accept the trade even though it didn’t meet your trade criteria? However, was the trade setup valid? it just didn’t work?
  3. Use loss as a learning opportunity: Ask yourself: “What can I learn from this trade?” Is there any insight into the market action to be had? Is there something in your business behavior that needs to be addressed? Whatever it is, you have a chance to pick up something new, and that’s valuable!
  4. Take immediate corrective action: Do you need to modify your commercial configuration? Is a rule needed for personal discipline? Regardless of what you have learned, take immediate action.
  5. Keep the right head and attitude: You always have a choice about attitude. You can accept loss as an inevitable part of trading and be grateful that you can learn from it, or you can go into a negative downward spiral of feeling bad, getting discouraged, and feeling even more miserable. Follow the constructive steps outlined here and stay on top of it all.
  6. Remember, trading is based on probabilities: Each trade setup has a probability of winning and a probability of loss. In a large number of trades, an advantage setup will be profitable. Any given trade is always uncertain. This is the law of trading probability.
  7. Go to the others: We all need support. Talk to your business partner, mentor, partner, or spouse. It helps to unload a bit and you can get a different perspective.