Focus Fridays
Focus Fridays
arty bryja
How to Handle a Loss in Trading
10 minutes Posted Aug 27, 2021 at 10:52 am.
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Leaning how to handle a loss in trading takes a lot of discipline. Being able to keep your emotions out of your day trading will help handle a loss while trading. We have all been there. We've all had that one loss that hurt and we just wanted to quit. I want to motivate you to learn how to control your emotions and be a better day trader and more consistent and Learn deep down how to handle a loss in trading.

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A large trading loss can be devastating — not only financially, but emotionally

As defeating as losses feel, how we react to loss that is more important than the loss itself. Inexperienced traders suffering a large loss can become hijacked by their emotions. Some may try to trade through the pain, denying it, often creating more turmoil for themselves. Some may withdraw, sweeping the loss under the rug to avoid thinking about it. Others may hunker down and try to “trade better,” determined to recoup the loss.

None of these reactions is constructive. In fact, they can be destructive if you don’t learn how to handle losing trades. Subsequent trading decisions are fraught with emotions that can drive erratic behavior. Depending on the individual trader, they may cut winning trades prematurely, overtrade, overstay unprofitable positions, or engage in other unrewarding actions — all done out of fear of another loss.

One major difference between successful traders and failed ones is how they handle trading losses. Successful traders treat losses as an opportunity to learn and improve their trading.

Here are seven steps successful traders take after a loss to become emotionally stronger and more disciplined:

Accept responsibility: You made the loss; be sure to own it. Don’t brush it aside, hide from it, or blame the “smart money” for your loss. When you take ownership, you control your trading — and that’s exactly where you want to be.