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How do I not take losses personally?
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How do I not take losses personally?

  #11 (permalink)
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What I am about to say depends on your stop target ratios etc.... But a strat that loses 40% of the time with a decent profit factor could be considered fantastic. I even have some really good strats that lose more than 50% of the time. Point being there will be a lot of losses. It is is an unavoidable and necessary part of trading. Once you accept that you are going to lose things become much easier. So you get there by just doing it over and over till one day it clicks.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #12 (permalink)
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WolfieWolf View Post
I think it helps to think in terms of probabilities. Regardless of your method, no matter how well it works, its not going to work all the time. But if you have confidence in your method, and you really do have an edge, then you can reconcile the loss by knowing that there is a high probability that over a series of trades you will be in profit or at least break / even. Of course it's important to have your stops well defined. I strive for a 3:1 reward to risk ratio. That means that for every winning trade I expect to make at least three times what I'm willing to risk on any one given trade and that works for me. Mostly because I won't take a trade if I don't think there is a chance of 3:1. So I can clean up three losses in a row with one winning trade. And if the next trade is a winner I'm in profit. Does this mean I still don't get emotional about taking a loss? For the most part no but sometimes I do. Feeling emotions is something humans do, most of us can't just shut them off. What's more important than not feeling emotional is not letting that emotion influence your actions. This morning I made a stupid decision, had a technical issue, and took an oversized loss. I was frustrated. I wanted to get right back into the market to "make it back" but instead I went and made a coffee. The market was still there when I got back and I was feeling more rational sipping a nice, sweet, hot cup of coffee.... I hope that makes some sense.

/W

I agree, and to add something else to consider: Learn MAE and MFE, PPT. Your trading system must work! Learn to test your trading system properly.

/JLW

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  #13 (permalink)
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Decrease your size until stop losses don't affect you is my two cents. Also a popular book, "trading in the zone" helps put it into perspective as well

Sent from my Nexus 7 using Tapatalk

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  #14 (permalink)
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A few points that have really helped me.

1) focus on the process of trading, strive for a 100%, and then analyse when you screw up that process. And sure, be pissed if you broke your rules.

2) realize that you can perfectly execute a trade and it results in a loss, however that was perfect process. So the loss is completely acceptable because it is part of the process.

3) understand that probably 80% of the time (or more), trading will make you feel bad. Hindsight always shows so clearly that you could have stayed in that winner longer, or cut that loser earlier, or entered on that signal, etc.

4) write down how you feel about each loss, and then ask yourself if this is rational...

Good Trades,

Yukoner

PS. Most of successful trading isn't natural human behavior

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  #15 (permalink)
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To not take losses personally, you have to drop your expectations about the market and your trade.
You're entering because price fits your strategy. You're exiting when price no longer fits your strategy.

Psychology > Strategy ≥ Money
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  #16 (permalink)
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How can a person not feel when losing money? With so much research showing its twice as painful to lose money vs gain I find it hard to believe people can shrug off losses

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the meanest bean of all,
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  #17 (permalink)
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Most people can't, hence the reason there are not very many successful traders.
The mindset of the average person does not allow them to succeed in this endeavor.

When you're playing a strategy, it's not about money and it's not about wins or losses.
It' about execution and risk. That's the focus of the strategist.

Psychology > Strategy ≥ Money
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  #18 (permalink)
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I had heard from a trading educator/coach somewhere that said "losses should be considered expected expenses" of a self-trading business similar to taxes, bills, rent, prepaid expenses etc. Yes it stinks that adds to the expense of the platform, broker and feed etc. But what if one is just learning still? Then maybe the usual adage of "don't trade money you can't afford to lose" could seem to apply. i.e. One is a millionaire already and he just uses 10k to start an account to learn from. Or someone could have "manchurian candidate" brainwashing or NLP programming to not care about losses (jk there).


Last edited by Cloudy; January 2nd, 2014 at 11:02 PM.
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  #19 (permalink)
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You're right cloudy, losses are expenses and just a part of the game.
It's what you're willing to put down to see if the trade can go in the desired direction.

You shouldn't take it personally because the market doesn't know who you are.
It doesn't know anything about you or your situation. All you're doing is waiting
for your pattern to show its face and then putting your chips on the table.
It stays within your risk tolerance and goes or it hits your threshold and your pattern
is no longer valid and you're out. That's the game.

Psychology > Strategy ≥ Money
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But we are still all human. In my college physics class I was always bothered that we spent so much time focusing on "ideal" mechanics. We all feel gravity even if our head may be in the clouds. To suggest a person can really not treat money as money is hard for me to fathom. Money only works after all because we are trained to give it value. Is it really possible to untrain yourself and to trade under these "ideal' conditions?

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