Our mission is to make the process as painless as possible, but there are inevitable and unpredictable hurdles that will stand in your way along the journey. How you cope with these failures is absolutely crucial; just because you fail, it doesn’t make you a failure. Being able to draw lessons from these failures and learn from them for the future will help you grow as a trader enormously. This ability alone is sufficient to differentiate winning traders from losing traders.
Every trader has losses, and there is nothing to be embarrassed or scared about. The important thing is not to get emotionally attached and accept that we all make mistakes every now and then. Similarly, if you feel like a failure because a good trade setup didn’t work it’s important to remember that losing trades are a necessary part of any trading strategy.
When you feel like a failure, remember these key rules:
1)Do not bet bigger because you are frustrated. Stick to your rules and good money management. If you are really feeling frustrated and like a failure, take some time away from the market until you can cool off.
2)Never give up! Often the biggest losing periods are followed by the best winning periods. As long as you are still in the game, you can live to trade another day. There have been many times when I have wanted to quit. There have been times when I have lost 10 trades in a row and felt utterly helpless, like the market was out to get me. However, by trading through these periods I have always come out on top and I am mentally tougher as a result.
3)Always keep perspective. In May of 2015 I had my worst month ever; a loss of 30%. It felt HORRENDOUS. I watched my account drop day by day, wondering when it was ever going to stop. However, looking back this feels all a bit pathetic. In the 3 months prior, I made +89%, + 22% and +35%, and yet this drop felt worse than all those put together. It’s much easier to get caught up by a few losing trades and lose sight of the bigger picture.
4)Resist the urge to try and take money back from the market! You will look for set-ups where there are none, trade too big, and make poor decisions.
Just remember even the most successful people in the world have losses. The difference between them and everyone else is that they can learn from them and move on.