HOW TO LOSE LIKE A BOSS
I will get right to it - losing a trade sucks. The hardest part about this is that it is inevitable as a trader that you will eventually incur a losing trade and the moment someone shows me a trader who has never lost I will show you a liar.
So what do you do when you do lose? Obviously nobody likes to lose but there are multiple layers in losing beyond being down money. Emotions get involved especially when you make your trading very public (ie social media bragging) or other peoples money is involved (ie signal services or trade copying services). Pride can be a nasty thing and a losing trader can quickly turn into a gambler if they do not handle it properly.
In reality there should only be 3 types of trades: small losses, small wins, and big wins. Proper risk management is an obvious candidate for the best way to handle losses but humans are not robots and the market is not black and white. As objective as we try and make it the charts never behave exactly how we’d like to. Since subjectivity is something we need to get used to here are a few tips on how to lose in the forex market like a boss.
1) Realize it happens to everyone. The markets do not care what these traders portray on Instagram. They all have losing trades. What separates a gambler from a proper trader is an honest to goodness approach to these losses. If you cannot own up to your own losses you might as well flip a coin next time you decide to trade. Chalk this up to the pride comment I mentioned earlier. People hate to be seen as anything but the best because they want to stand out. What they fail to realize is the best traders on the planet have lost more trades than most others have taken. When you learn by finding out what doesn’t work you can objectively create a trading system that seeks out the same winning style every time you enter the market.
2) Find a system and stick with it. No system is perfect and just because you incur a loss doesn’t mean the system doesn’t work, it simply means you may have not followed your own rules. The reason most traders lose their shirts is because successful trading goes beyond being able to read the charts. Conquering the markets require conquering your own emotions. What most traders do year in year out is bounce from system to system trying to find that holy grail when the best system for you is the one that allows you to approach the market with confidence you will win and being content if you don’t.
3) Accountability. This is probably the BIGGEST piece of advice when it comes to losing gracefully. When you lose the only fault is on your shoulders. Stop loss hit because of news? You should have managed your trade better or stayed out of the market altogether. Missed an entry? Nobody to blame but you. The perfect trade didn’t go how you thought it would and you blew 25% of your account? That’s all you boo. The market is a reflection of global psychology at that exact time. You do not have any influence on it whatsoever so why try and control it? All you can do is pick and choose your entries to the best of your ability. If you are not a profitable trader (this doesn’t mean win rate, this means if you’re making money) then you need to look in the mirror and ask “ What am I doing that is keeping me from being a successful trader?” You should be able to take a loss exactly how you take a win. Forget about it and wait for your next one.
There are probably a million other ways to deal with losing trades just like there are a million other ways to trade the markets. However, these 3 points are what I have found to plague new traders trying to carve out their own piece of the pie. You aren’t alone, your system isn’t broken you are, and simply be able to own up to a loss because at the end of the day… nobody cares. Any negativity in the public perception of you as a trader is your own doing.
Once you can master these three points you will be able to find your peace within the markets and the freedom that comes with being a successful forex trader.