How to deal with Trading Loss

By | August 14, 2013 4:21 pm

Many traders i have trained during my training classes have confessed they were devastated by there single loss. A single loss was so deep that Market forced them out of the game.The point  i want to  traders to understand a loss should  never be so devastating to the end result that you are thrown out of market.

‘It’s not whether you get knocked down, it’s whether you get up.’  Vince Lombardi 

In trading, we all have losses. We accept it as part of the game, as trading is not a game of perfect.  But another quote from Lombardi applies:  Perfection is not attainable, but if we chase perfection we can catch excellence.  This is what we want to achieve – EXCELLENCE!

Look, a loss can certainly set you back financially or even emotionally, but if we have the right controls in place (money management, risk management and trade discipline) then any trading loss should only be a small in size.  A devastating blow is tough to overcome, but look again what Lombardi said about getting back up.  Trading is a war in which we fight battle everyday, Losing 1-2 battle will not decide whether you win or lose the war.Its when you win maximum battle you win the war.

There is no reason to fear a loss, but one major sin is allowing a profit to turn into a loss.  We’ve all done it and every one of us have regretted not pulling the trigger earlier.  Oh, why didn’t I sell it yesterday when I had a gain?  Hindsight is always 20/20, right?  Yet if you had a plan in place PRIOR to opening the trade and actually followed the plan then there might not be any regret.  How do I cut my risk of this painful feeling?  By having a trading plan and mentally prepared to stock to that plan.

While some of you may have other rules for taking profits – that’s a good thing – keep refining what makes you comfortable and satisfied.  Selling is one of the hardest but most liberating exercises, and taking profits without regret or fear of loss empowers you to be a better trader.


One thought on “How to deal with Trading Loss

  1. chitra

    Nice article. In trading there can be chances of loss but a good trader is one who overcomes it. It is very sad if the profit is turned into loss. SO want to be very careful while trading.


Leave a Reply