Learn to Love your Losses

[Jack Francisco]

yes maybe you are right. we will get the experience of our defeat. maybe we will find the location of our mistakes and try to fix it using a demo account. after we get good results, we will be confident to apply them in real trading.

 

[jonelle]

thanks for your encouragement. I will wait when the time is ripe for me to start trading.

 

[pobednik]

this is easier to say then to do, especially when you come from a third world country like myself and dont have much funds

 

[jonelle]

Sometimes loss makes us realize where we are. Loss tells us if we are still babes or experts. Loss helps us to straighten our hands and make plans to avoid them. Nobody prays to lose, but when it does happen, you should just smile and say "I'll make sure you don't come my way again"

Thanks for your encouragement

 

[Incerto]

After some experience in day trading, and some mistakes, in preparing myself to begin again I am convinced that the psychological side of the matter is absolutely the crucial one to master.

During my previous experience, early 2009, I begun with £1000, after a month I hade £1400 and I was very glad. In the following 40 - 50 days I lost the entire £1400. I know what went wrong:
- complacency, being less cautious before entering a position;
- desire to recover losses: that made me slowly augment my trading frequency, until I ended up doing even more than 10 round trips a day. During the first month it was 1, no more than 2 round trips per day;
- anxiety to demonstrate to myself that day-trading was a viable option. Losses are awful not for the money it inself, but because they raise anxiety about the viability of day-trading as an habit, especially in a beginner.
- also, my long-term bullish bias and my general fundamentalist bias did not fit with the unbelievable crash of february-march 2009, when the stock exchanges reached ridiculous valuations. Even when I entered short, within my mind I was bullish and at the least loss I would "turn around" and go long.

My strategy for the new trading experience is totally different: no more staring at the monitor; no more asking myself what is the market doing; No more telling myself that the market is right and I am wrong (which is wrong, emotional reasoning).

I will now place the "bet", place the Stop-Loss and the Take-Profit, and walk away. From time to time I will check the position. If the SL was triggered, the firm rule is: no more operations for the entire day, no matter what the graph says. That's because I came to the conclusion that the damage the loss makes is not the loss itself, but all the train of wrong thoughts that it engenders. One ends up seeing opportunities everywhere, feeling anxious to go even.
No more than a loss per day is my rule now.
Tomorrow the mind will be calm and "detached" from the loss of yesterday.

I cannot psychologically "manage" losses so that the mind is "equal" after a loss. I will not even try to convince myself that it is possible. I give up attempts to control my emotions. A loss will work as a circuit-breaker which gives me the time to cool down. Tomorrow the analysis will be performed with a clear, undistorted mind, which is impossible (to me) after a loss.
Beware of the loss.
Learn to distrust your losses, I say

 

[Keysha]

A professional video gamer once told me that it's better to lose and learn something from it, than win and learn nothing at all. ._.

 

[Ituglobal]

Are market wizards (generals of the markets) achieving 90% - 100 % probabilities consistently? If we analyze their trading performances since the beginning of their various careers, we’d see that this is far from being true. Most have an accuracy which is less than 40% and yet they move ahead.

 

[resistance]

I do not think that the masters are even getting 90% probabilities right. I have seen one getting around 82% which is very good infact and I guess they accept the losses and know how to recover these things.

 

[malaguti]

I do not think that the masters are even getting 90% probabilities right. I have seen one getting around 82% which is very good infact and I guess they accept the losses and know how to recover these things.

nobody is getting 90% and i dont believe 82% either

 

[wackypete2]

nobody is getting 90% and i dont believe 82% either

Haven't you read about those few nice fellas with the 100% success threads here?

Peter

 

[wackypete2]

Are market wizards (generals of the markets) achieving 90% - 100 % probabilities consistently? If we analyze their trading performances since the beginning of their various careers, we’d see that this is far from being true. Most have an accuracy which is less than 40% and yet they move ahead.

I heard General Mills and Colonel Sanders are killing it in wheat futures.

Peter

 

[neil]

I heard General Mills and Colonel Sanders are killing it in wheat futures.

Peter

Pah! Chickenfeed.

 

[Babyblush]

We should always learn to rectify the mistakes which we made when we are losing money in the forex market so that the same can be corrected next time.