FAQ Do I Have to Accept some Big Losses in the Beginning?

Jul 24, 2009
5
0
11
#31
you have to accept SOME losses, but not necessarily BIG losses. i mean, you can use a stop limit and make sure you dont lose more than a certain amount. that's all about discipline and controlling yourself. even when the trend has reversed, sometimes people still hold the stock because they're hoping the trend will go in their favor so that they can break even, and perhaps take profit.

Now here is a paragraph I like from Trading For a Living by Alexander Elder, which by the way is a greatt book

"Traders often ask me how much they need to begin trading. They want to be able to withstand a drawdown, a temporary drop in the account equity. They expect to lose a large amount of money before making any! They sound like an engineer who plans to build several bridges that collapse before erecting this masterpiece. Would a surgeon plan on killing several patients while becoming an expert at taking out an appendix?"
 
Nov 3, 2010
28
1
13
#32
Yeah, I agree, losing is a part of trading. It's how you manage your risk that determines whether your account will be able to survive those losses in the long run. Good luck!
 
Jan 10, 2012
12
0
11
#33
Part of being a trader is having the ability to accept your losses and move on. Simple

Also if you have prepared before you trade you should already know what risk you have and already come to terms with it before you place the trade. Comes in time though.
 
Last edited by a moderator:
Nov 29, 2012
32
2
18
#34
being an economist by training, i lean toward our default position of 'yes and no' :)

no, with proper limits, hedging and stop losses, you do not need to take large losses from trading before you start to see profits.

yes, it is very common to not lose because of the trade, but because of getting margin called. for example, if you have an options strategy and you suddenly get assigned on one of your options, that can change your margin requirement completely and put you in margin call.

i would recommend that for any strategy requiring margin, especially with options. that you start small for awhile to minimize the risk of bad surprises. i've seen it happen to very smart people.
 

Giovan

Active member
Apr 23, 2013
163
7
28
#35
Nope never take the huge losses. How do you do that? Place reasonable but tight SL's as you open your trades. You can only lose that much.
 
Last edited by a moderator:
Jul 28, 2011
427
1
28
#36
Huge losses are TOTALLY avoidable - absent a gap through your stop-loss.

Set your stop at a level that you feel is either technically relevant or represents a price that invalidates your thesis.

Risk 1-2% max per trade and you stand a far better chance at surviving. Even with wide stops, adjusting your lot size will keep risk at the 1-2% level or whatever level you feel is appropriate.
 
Jul 22, 2013
77
2
18
#37
Don't go for big one if you're new in trading. For God sake it's your money. Don't give your heart to rules over your head. Make sure you do research before you do live trading. The market can goes up as well as down. You can make money in falling marketing. So, open your eyes.
 
Aug 16, 2013
19
0
11
#38
No, you don't have to suffer big losses if you have good knowledge and planning about trading. Patience is the other and you should control your patience during the trade.
 

montmorencyt2w

Well-known member
May 17, 2008
2,620
294
93
#39
Big losses in the beginning are preferable to big wins in the beginning, because the latter will delude you into thinking it was your great skill and not luck.

Get burned a few times, and you may learn to be more careful in future.
 
Mar 5, 2014
48
4
18
#40
No losses are not a requirement… but they will become the prerequisite if you're using any out of the box technical studies. So user beware, 99% are historically lagging and don't tell you where the prices are going.. only where they have been. What makes it tougher is that because of this lag your losses aren't cut short until many many pips in drawdown.

When I place an entry, I don't use a stop loss that's absurdly far away from the market… you can't expect a 50 pip spike in your direction if your timing is off so why use a 25 pip or heck.. a 10 pip stop?

My stops are 2 to 5 pips and are only hit 6% of the time. But then again.. I use no historical indicators… get rid of macs, stochastics, even fibonacci numbers are junk here.. Get into real time and sweat less.
 

neil

Well-known member
Nov 19, 2001
5,169
744
173
#41
Wot !

I myself will not reduce the condition losing my money if I have it. This is because I am aware that in forex trading profit and loss are reality. I am also aware that seems I am closed to big profit
Wot are you 'kin smokin' bruv?
 
Jul 10, 2014
648
10
28
#42
Losses happen to all traders, including the occasional big loss. That said, I think it's very important to remain calm even when it happens, because a panicked reaction might lead to an even bigger loss.
 

hjg

Member
Feb 11, 2015
29
0
11
#43
Before your trade stabilises, it would be okay to make some losses. As the trade grows,economies of large scale help eliminate or at least reduce the losses
 
Dec 15, 2014
140
22
28
San Diego
#44
"Do I Have to Accept some Big Losses in the Beginning?"

Generally, Yes. -- it's like learning to ride a bike as a kid...you can kind of ...more or less...expect some scrapes or falls to happen. :-0

But you mentioned keyword 'Big'...you won't take a big loss...if you don't take a big position...

May the Farce be With You...
 
Last edited:
Apr 16, 2015
15
0
11
#45
Of course, you have to be prepared for the fact that the first trade will fail. It's like learning to walk, be sure to fall a couple of times. The question is whether you have enough strength and desire to go through a losing streak, draw conclusions and move on to your profit.