How To Deal With Trading Losses!
How To Deal With Trading Losses
Trade for the right reasons:
If you trade based on fundamentals and specific reasons that are in line with a broader strategy, then when things go badly you will have the reassurance that you made the initial trade for the right reasons. Avoid trading on emotion and hype.
Learn from your mistakes:
In every failure you get to choose your response. Choose to respond by learning from your mistakes by being critical of the decisions you made.
Start small:
After a big loss your psychology might not be at its best, start with smaller positions and build back up. It might even be beneficial just to watch the market and make hypothetical trades.
Everyone makes mistakes:
Realize everyone makes mistakes, nobody can have a perfect trading record. Understand that you are human, learn and keep moving forward.
Do not lose more off emotion:
Lastly, you will often have the urge to make another trade to make your losses back. This is the worst psychology to be in because you are letting emotion govern your trading decision making.
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