You might think I’m crazy when I say it, but I love it when I have a losing trade.
Of course, I don’t go out looking for losing trades in the market, but when I do have a trade where I get it wrong, it gives me an opportunity.
This is; the opportunity to learn.
Opportunity’s like this are usually wasted by other traders; they move on to the next trade (generally annoyed) and potentially make the same mistake on it!
A famous man once said,
“All men make mistakes, but only wise men learn from their mistakes.”
This quote is very true in trading, no matter what, you will experience losing trades.
There is however an exception to this, there is times you can follow your rules and do everything right, but still experience a loss.
This is because there are many contributing factors that can affect the market that you may not have been able to foresee.
This is critically important to identify so that you are not searching for something that you will never find.
If however you do make a mistake, go back and look at what you could have done better, this could save you from making the same mistake again.
Things to ask yourself after a losing trade
-Why was it a losing trade?
-Can you improve in the next trade?
-Did you risk an amount you are comfortable with?
-Are you in the right frame of mind to trade again?
The most common mistakes that I see are from things like risking more money than they should and breaking rules for entry’s and exits.
The temptation of risking more money to make more money can be very easy to do in trading, but this often leads to damaged accounts and traders.
It can also be tempting to enter into a trade early before your entry requirements have been fulfilled; this generally has minimal effects for traders.
t’s best to document your trades and why they were losing, especially if you are a repeat offender of breaking your own rules.
By doing this you can generally track if you’re making the same mistakes, or if your strategy needs improving.
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