Any way you slice it, losing is part of trading. A big part. If you do not master learning how to lose like a pro, you are not going to be in the game for very long.
There are two ways to lose on a trade: Lose like a loser, or learning to lose like a professional
Which do you think you’d prefer? Of course, if you can learn how to lose, you can learn how to win.
Pros never go into a trade without a predetermined “uncle” or exit point. Even if you don’t consider yourself one, act like one and you’ll see better results.
Set a predetermined stop-loss point or market level at which you will close the trade, period. If the market hits your stop-loss or gets to your exit point, get out.
While this may sound simple, it is simply amazing how many traders and investors cannot follow this very simple rule.
Never risk more than one to two percent of your account value on a single trade. By keeping your per-trade risk to a minimum, you can help ensure that even with a string of losers you will still be in the game.
Professionals recognize that losing streaks are part of the game. They further recognize that losers are part of the game, and with every loss you may potentially be that much closer to your next big winner. That’s it.
Losing like a professional entails these two simple rules. These rules are so simple, that you could even train a five year old to follow them.
Yes, your emotions may get in the way. The key is to manage them and treat losses as part of trading, as in learning to lose like a pro. You’re not always going to win, so get used to that now before it’s too late.
Stop losing like a loser and start losing like a pro!
