Everyone will inevitably experience losses at some point in their trading career. The important thing is how one deals with those losses. We decided to give you some recommendations on how to tackle these problems to stay calm, encouraged, and efficient.
Step one: admission
The first and crucial thing to do is accept that losses are a part of trading. You cannot be a successful trader without having losses. If you try to avoid losses compulsively and fearfully, you only end up losing more in the long run and burning out. Acceptance of your trading failures allows you to learn from them. Perfectionism doesn’t. Take the time to analyze your trades and figure out what went wrong. That will help you to avoid the same mistakes in the future. Finally, don’t let your losses get you down. Remember that even the best traders have losing trades.
Novice traders have the same problem when they face their first trading losses. That can be a serious obstacle on your way to the top because it limits trading experience and prevents you from developing trading skills. The key is to keep learning and growing as a trader to eventually overcome your losses.
Step two: learn and ask for help
So, you admitted your loss and continued your trading path. Your trading strategy still might have some shortcomings, but it is not the reason to give up as soon as you are willing to improve your skills. Of course, the most effective way of building up your trading mastership is studying through a complex trading course. Here, we want to consider an easier way.
Find out the reason behind your loss and seek support. The source of that support is fully up to you: it can be a friend who achieved trading success, your favorite finance blog, or an online discussion board. Just ask for a piece of advice — people are generally happy to share their experiences. Of course, those people can be wrong, yet it is your choice whether to listen to them or not. Learning is also an investment regardless of the way you learn.
A good way to enhance your trading is to use trading ideas on our social media. We publish trading ideas every day and they have very high profitability.
If you want a cognitive option, check out books and interviews of famous investors. For example, read Warren Buffett’s “Lessons for Corporate America”. That is not a trading guide or handbook, though it contains precious knowledge.
Finally, in case you are confused at this point, expose your issue on our social media pages. Our experts are always there to help you.
Step three: keep your trading journal
How do skilled traders overcome trading losses and manage their risks? They keep a journal. A trading journal is a great tool to help you cope with your losses. It helps to track losses and find out the reason for your failures. Thus, a journal will also help you learn from your mistakes.
Your trading journal should include as much detail as possible. We made a list you can use for yours:
• The information about the deal (name of the instrument, deal volume, open/close time, enter/exit price, stop-loss, and take-profit).
• General analysis of the market situation.
• Your thoughts including your emotional state that influenced your decision.
Trace the reasons and patterns behind your trading results with these hints. A well-keeping trading journal helps to hone your trading technique, thus getting more profit.
A loss is a part of trading. Repeat these three steps after each failure: admit it, seek help, and review your mistakes. This way you will easily get over it and turn your losses into a greater profit.
Trade with Grand Capital! We are striving to ease your trading experience.