I am just wondering how some of you got over losses being painful to you emotionally. I am good about taking losses and I always predefine my loss before I enter. However, the losses still affect me psychologically. Have any of you experienced this, and if so, how did you grow where you didn't take losses personally?
Thanks in advance.
The following 2 users say Thank You to Nashville22 for this post:
The losses only affect me when I know I did a mistake: I didn't follow my strategy for example, or apply my plan as I should, etc...
Otherwise, if it is a loss despite my perfectly executed trading plan, then I don't mind it at all, I just see that as business expenses
With time, you will learn to do less and less of those mistakes, and you will thus get less affected by those trading losses.
Also, as your confidence growth, and you know that you can be profitable, then you will also know that you can recuperate that loss, and you won't stress much over it anymore... This will help too especially when the loss remains a manageable percentage of overall capital.
Successful people will do what unsuccessful people won't or can't do!
The following 6 users say Thank You to Fadi for this post:
Guys mh 2 cents. Loss should never affect the psyc if not a big loss. Now if it is a big loss means something was not correct or never corrected.
I too had a big loss once which took me a while to digest. But I knew from the start I was wrong since had become cocky about success...traded big...w/o stops. Mrkt took away 6months of profits and more in less than 3 hrs. That event was big enough for me to say a Big Bye to trading. Hands shook for a while after this which I am glad I came out of.
A post analysis lasting several days I decided that I needed to further myself and I acknowledged that it was my doing and not the markets fault. It made me look deeper into all aspects of my trading and me as a person. The lesson learnt was very hard...and if not learnt could have been very painful at a later time. It also led me to explore things which was not apparent since I was making $ and on a winners streak. I made it a point to understand mrkt direction if nothing else.
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The following 4 users say Thank You to paps for this post:
Loosing is always painful. I mean who really likes to loose anyways? However, is all part of the game since you can't win 100% of the time. From my POV you can have more loses than winners and still be profitable. But you have to learn to cut your loses before it's too late and move on so you get to live another day. It's that simple.
Then my other prespective for getting over my loses quickly goes like this: If I go down I am taking someone with me and I'll get it all back eventually.
The following 2 users say Thank You to tlopez51 for this 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.
The following 7 users say Thank You to WolfieWolf for this post:
Chances are high you(like all of us) have some limiting beliefs about money and FEAR of LOSS that is the root of your issue that must be addressed so you can think objectively in a probability based mindset about the market.
Some of the work by Rande Howell is excellent in what this looks like. He also addresses how to recognize these limiting beliefs and how to begin to move from those beliefs dominating your trading to probabilities and risk management dominating your thoughts.