Home > Beginner education > $how to make taking a loss stress free$

$how to make taking a loss stress free$

$”It’s not possible to be that disciplined, you need superhuman ability to take losses without emotion!” That was my thought process as a new trader over 14 years ago. I didn’t understand how the big time profitable traders could take a loss and move to the next trade without getting mad.

I would read book after book that talked about discipline and how it was a huge part of becoming a successful trader. Here are some thoughts from my own experience that I hope can help your trading bottom line

Discipline to hold good trades to a profit target. Everyone knows about discipline to take a loss at a preplanned stop loss. What is almost never talked about is sticking with a good trade if you see no reason to to get out. Start to focus on the information that would indicate the order flow or momentum is still valid. If you believe the idea for the trade is still intact, get out of your comfort zone and hold on for a big winner. This of course assumes you “know” what a good trade looks like.

Discipline to avoid mediocre trade scenarios. It can be very hard to do nothing. Once you read your P&L statement like a forensic accountant you will realize that the reason you are not netting money is because of all those “paper cuts” your account is suffering. It is not hard to be disciplined to wait for higher probability trades when you truly understand trading for excitement is NOT the road to getting paid consistently.

Discipline to execute losses immediately. I have found that when I hold trades that are clearly not working out my focus is on one of scarcity. I believe “I must hold this trade because it is the only opportunity I will have today to make money.” Now I don’t actually say this to myself but what else could I believe to hold on to a trade that is not confirming my scenario?

I have found that when I believe that my next big trade could be my next trade I have no good argument for holding a position not working out. Once you have this belief and a belief that you are trading to earn money instead of trading to prove yourself “right” it will be much easier to execute a loss with out any emotional baggage attached.

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