May 11: Who Else Wants To Know How Experts Deal With Losing Trades

by Dave on May 11, 2006

At some point in your trading career you will be faced with a string of losses that will bring your confidence to an all-time low. Every trader hits this point at least once, and some will visit it several times. Here are some tips on how to deal with this situation.

First, I recommend that you take a break from trading. A one week break will allow you to relax and regroup. It is impossible to trade effectively when you are under extreme stress. When you have decompressed and returned to a more positive frame of mind you will be able to reaffirm your goals and think clearly when you come back to your trading room.

You should pay careful attention to your mindset. If you do not have a positive approach to your trading the best tools and strategies can be at your disposal, but they will not give you the results you want. There are a variety of meditation and visualization techniques that can help you achieve a positive mental outlook. Learn about them, and use the ones that work best for you. Once you can effectively see yourself an up-and-coming trader, sure to meet and exceed all your trading goals, you are more than half way there. Remember, your mind is the greatest asset you posses.

Next, consider your trading experience up to now. It makes sense to take stock of your trading, and ask yourself some important questions. The most important one is `Have I been following my trading plan?` Often failure in the market is caused by not following your plan. See where you departed from your plan, and consider what you need to do to not make the same mistakes. This kind of analysis will give you valuable insight into your trading, and help you attain much greater success in the future.

With your consideration of your trading past in hand, make whatever adjustments you need to your trading plan. Your trading plan should define your approach to trading, and should give you a course of action for any circumstance that might arise. Without a comprehensive trading plan, it is very difficult to be a successful trader.

Lastly, when you begin trading again, follow your plan flawlessly. You need to acknowledge the fact that this is hard to do. But commit to doing it, be disciplined. Ultimately, undisciplined behavior will be punished by the market, either by direct losses or by the loss of profits you could have made. However, the market can confuse this issue with random reinforcement. Random reinforcement is the market`s tendency to reward bad behaviour from time to time. This is one of the reasons why it can take so long for traders to understand the market. However, even with random reinforcement, it makes no sense to have a system if you are not going to follow it.

Given that it is so hard to follow a system, you should take some time to reward yourself for doing this difficult task. Celebrate even if you have more losses than winning trades. Remember, losses are just as important as winning trades, they are a part of any system, and a sign that you are following the market wisdom of cutting your losses short.

When you are up and trading again, you may want to consider finding yourself a coach. Even I have a coach. In fact, I have coaches in all areas of my life. I learnt the importance of mentors from Tiger Woods. Even he has a coach. Now why does best golfer in the world have a coach? It certainly isn`t because his coach plays a better round of golf than him. No, it`s because a coach can see things from a different view point. A good coach can be vital in helping you along your trading journey.

It isn`t easy to pick yourself up and start trading again after a long series of losses. But with these techniques, you should find yourself trading again, and making money. With the right approach and a well-designed trading system, it`s only a matter of time before you become a successful trader again.

This article has been extracted from David Jenyns` Trading Secrets Revealed Course. Unfortunately this course is currently sold out. To be notified if and when extra copies are released, please send us an email and we`ll let you know when you can purchase a copy of this highly recommended course. Click Here and send us an email. and be sure to mention you want to be on the `Trading Secrets Revealed Waiting List`.


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