How do you deal with your losses?

I used to talk to my teacher , once I told him: I wish him permanent profit. !
His answer to me was: there is a gap in your learning, you must learn that losses are a part of this game.
In order to master this game you must learn to accept losses with open air.

How do you deal with your losses? (Before, during, after).
What do you do to accept loss?

If a trader need to deal with losses on a psychological level...

1. His trading position size is too big for him.

2. He is using a losing system, that incur net drawdown over time.

One of the above.

@TicTocTick
Bad traders place trades and feel anxiety. Good traders place trades and feel good. Great traders place trades and feel nothing

I posted in this in my journal a few days ago. Such a good quote from Tictoctick

AlastorFate is correct. One of those two things is happening. You either have an edge or you do not have an edge. If you have an edge, then you're risking too much if you feel you have to "deal" with a loss. Traders with an edge that are using the correct sizing, simply move on and do not think again about the trade.

I fully evaluate every trade. Profit or Loss. If I followed all of my rules for entry but still it turned out to lose money then there is nothing to feel bad about. The trade was valid per my rules and the markets just didn't agree with my decision.

Having confidence in your system will go a long way towards helping you deal with a trade that went against you. If you let losing trades shake that confidence then you will hesitate or even fail to take the next trade which could easily make up for the losses and then some.

If you are afraid to lose, you will never win.

" If you are afraid to lose, you will never win."
(I have already read this sentence in many times in many books)
I think : Fear is something that can not be bypassed or claimed to be nonexistent.
But I ask how can I deal with it without affecting on my business?

You cannot win a losing trade, so just end it. Why would trading be any different from anything else in life? Do you make every basket you shoot? Do you catch every ball thrown to you? Do you never sleep in a bad position? Never stub your toe? Never burn your hand? Never get blinded by the sun? Never have a shoelace come undone? Etc, etc. So, why would you be able to win every trade? That would literally mean you can read the minds of millions of traders and know what all of them are going to do next. Can you know what a single stranger at the grocery store will do next? lol. But, you think you know what all those traders will do?

You will lose. If there is a lesson to be learned from the loss, meaning YOU made a mistake, then correct it and keep pushing forward. In order to profit, some person has to be willing to pay more money than you did. If no one wants to pay more, you cannot force it. You will lose. Fact. But, that does not mean that you will lose on average. Over multiple trades, your winners can surpass your losers. Just like everything else in life. Don't put trading into some kind of "new" force of nature. It is people. You are people. If you lose at things, so does everyone else. Don't take it personal. It is just fact.

See if anything I wrote at this link helps. It is always a personal battle, so all we can do is tell you that you don't have to accept fear. Only you can defeat it.
https://www.forexfactory.com/showthr...72#post9368672

It is just the cost of doing business. Win some, lose some. As long as I did not make a mistake in my trading method there is no fault. Every trader takes a loss. Every trader has to learn that taking a loss is part of business. When I take a loss, I just move on. Forex is a business. Just like any business you will have losses. If you open a standard business, say a coffee shop, you are already down tens of thousands of dollars the day you open up. Think about that for a second. You are down 20-30K or more the day you start. You will not turn an actual, realized profit for years maybe even never.

The business of Forex gives anyone with the desire and discipline to study and work hard to start a Forex business for only a few hundred to a few thousand dollars. You will not start in the hole, but you may end up there if you did not study up, practice and treat Forex with the respect of a business not a get rich quick attitude. Done right, Forex can help supplement your income, or even replace it.

-Ric

Hi riclater211 allow me to ask you plz :
"study and work hard"
You mean what dkrock said "That would literally mean you can read the minds of millions of traders and know what all of them are going to do next" ..... ?
or something else ....?

What I mean by "study and work hard" is understand what you are doing. Know what the indicators you want to use mean and how they work. Get to know the behaviors of the pairs you intend to trade. Know what each news announcement means and how it may affect your trading plan or strategy. Learn what a money management plan is, devise one and work with it. What dkrock said is impossible, that is why he said it. He was not serious about "read the minds of millions of traders".

As simple as possible what I am saying is learn the Forex trade before you start with real money. Would you open a electrician business if you did not even know how to screw in a light bulb? I think not. Educate yourself, keep learning and keep ego at bay. I do this to make money in a way I can live with. We all trade different based on what we have learned, how we handle stress and our tolerance for risk. We are all in the market for the same reason, we just do it differently.

-Ric

Top Ten Tips for Forex Success Part 1

Details

Published on Wednesday, 17 October 2012 21:45

Have you ever wondered how the elite group of successful Forex traders got to be that way - successful and highly profitable?

Do you think you have what it takes to join the club? Can you survive the Forex apprenticeship??

Most successful traders became profitable by first earning their Forex PhD. In this case, the letters PhD stand for Phenomenally Huge Drawdown. It is often said that 95% of new traders will lose their shirts. What precisely, separates the winners from the losers? The success stories have a common theme and it is not what you might expect.

Smart traders understand the risk inherent in this market and plan to be around for the long haul from the outset. What are the keys to success? Do you have what it takes?

Strategic/Tactical

1. Respect for Risk

Forex is like an ocean liner that runs on the edge of a razor blade. It can be highly lucrative and highly damaging. Successful traders comprehend the risk inherent in a highly dynamic changeable market and adjust their perspective and trade plans accordingly. These lessons have been learned the hard way, through incurring sometimes significant losses.

Successful traders have enormous respect for risk (since they have experienced the damage this market can do first hand when they get it wrong), they are highly flexible, not rigid; they are in tune with the changing tides of sentiment and have the capacity to shift their directional bias accordingly.

2. Advantage Plus

Successful traders have two key advantages.

First, they have the best information. This consists of 5 key items

1. extensive Technical Analysis knowledge that works in the Forex market
2. lengthy market experience
3. independent/sound research capacity
4. self-motivated attention to detail
5. thorough and professional preparation

Second, they make the smallest number of mistakes. It is not a question of making no mistakes (even the best traders get it wrong sometimes) but they strive to keep the error rate as low as possible.

Successful traders obtain, and maintain their success through accessing and using reliable high quality information and by keeping their error rate low.

3. Know the Rules and Exceptions

The Forex market has 1001 different nuances that apply in different circumstances. Good traders know the rules. Great traders know the exceptions. Knowledge, experience and education matter. Longevity in the Forex market is important since it is only through this long-term familiarity with trial and error? that a good trader gains the detailed knowledge and discipline needed to be successful. Trading Forex is a little like training for neuro-surgery. Traders should avoid conducting major surgery on the patient until such time as they have sufficient knowledge, skill, training and clinical practice to be highly competent in their craft. The learning curve can be steep and costly if you venture into major operations too soon (e.g. misuse of margin, assuming positions that are too large, over-trading).

Successful traders have extensive experience under their belts. They have identified a trading system that works consistently for them and they apply it rigorously. They also know the exceptions, that is, when and under what circumstances their normal approach cannot be relied upon.

4. Timing

Timing is critical to successful trading. A core axiom in maximising success is to only trade when the market is at its most liquid. This occurs at the beginning of the European session, during the overlap of the European and U.S. sessions and as the U.S. session closes. During these times, the tides of momentum are at their peak with the greatest velocity. Momentum is like a drawn crossbow, and timing is the trigger which will release the bolt with deadly accuracy. (Sun Tzu, Art of War).

Successful traders maximise their chances of success by deliberately stacking the odds in their favour.

5. Understanding Herd Behaviour

Currencies are drawn to major support and resistance levels. Herd behaviour is rampant in this market. If new traders learn nothing else, it should be to only place trades when currencies are at established support and resistance levels and/or when there is clear confirmation that a breakout move or trend reversal is occurring. Trading within the body of a move already in progress compounds risk in an already high risk instrument.

Successful traders monitor key support and resistance levels closely.

6. Logic and the Analytical Mind

The Forex market can remain irrational longer than you can remain liquid. Highly analytical minds can find this lack of logical behaviour difficult to process. Logic and reason based on fundamentals do not always influence currency behaviour. Bias and impatience are the trader's enemies. Some traders would rather be right, than be rich. Check your ego in at the door before entering, or this market will check it in for you.

Successful traders possess humility - they acquired this the hard way.

7. Price Action (PA).

In the Forex market, zig zag price action and retracements are very common. Most moves will retrace by 50% and many moves will re-test support and resistance levels several times before deciding on direction. Successful traders avoid getting on board too soon since the market generally provides plenty of chances to recognise a move reversal levels are (nearly always) tested more than once, usually multiple times. Learning to read the signs for safe entry accurately is a major part of the apprenticeship.

Successful traders recognise the most reliable trade signals. They know when to enter and when to exit, locking in profits.

8. Less is More

Successful traders keep their finger off the trigger unless all of their pre-determined entry signals are met. Overtrading is the Number One account killer. Choose your moment of entry carefully. Plan your trade. If in doubt, stay out. Less is more. This cannot be emphasized enough.

Successful traders plan their trades and exercise the discipline to wait for price to come to them.

9. Psychological Warfare

Trading is psychological warfare with yourself first and with the market second. Trading is a catharsis, a rite of purification, a cleansing from the impurities of wrong information, lack of discipline, errors of judgement. Sometimes, when traders make the same mistake over and over, their learning is merely being taken to a deeper level on each consecutive occasion until the point is eventually made.

Constant repetition of a mistake occurs because our brains can be unknowingly programmed to prefer trading a particular directional bias (just like Pavlov's dog, we are rewarded for trading a certain long or short bias, so the reward program is set to automatic). Re-programming the brain to be able to trade both the trend and countertrend is vitally important, but it is not an easy task.

Allowing yourself to be shaped and refined? in the Forex crucible requires two key personality elements - character and fortitude. It also requires a significant cache of reserve funds, without which, your Forex trading career may be short-lived. One of the worst mistakes new traders make is to transition from demo trading to live trading with all guns blazing.

Successful traders have visited their own fallibility, they have survived the crucible and allowed it to shape them. Successful traders can trade both trend and countertrend moves with equal confidence.

10. Longevity.

Plan from the outset to be around for the long haul. Trading Forex successfully requires high levels of self discipline and emotional maturity - trading real money (unlike demo trading) carries significant pressure that can easily lead to doing the wrong thing in the heat of the moment. Learning to manage emotions, to remain patient and disciplined is perhaps the hardest of all apprenticeship hurdles. Being unable to gain mastery of this is the main cause of losses and blown accounts.

Successful traders are disciplined, smart and market savvy because they have been around long enough to have visited the raw truth regarding the causes of their failures. They have diligently applied themselves to the task of overcoming their short-comings and succeeded (where others have either given up or continued to cling relentlessly to bad habits or unrealistic objectives, and fail).

Summary

Start small. Trade a live micro account to begin with. If or when you have the runs on the board with consistent profits in a micro account, that is the time to move to a larger account and larger position sizing.

Make plenty of allowance for the steep learning curve and be well prepared - understand from the outset this is a journey you are embarking on, a journey into how this market operates and a journey into how you operate as a trader. It may take a few months or it may take years to acquire proficiency, it all depends on you, the trader. Acquiring the necessary knowledge and skill is a process, sometimes a brutal and lengthy process.

Be fully prepared. Be smart, be realistic, trade safely while you learn the craft of trading Forex successfully.

Accept them and move on to better trading opportunities.

KP

Ho can you " Accept Them "

KeenPips

Make sure any loss you take is not beyond what you can bear and that you have enough trading capital to take advantage of future trading opportunities. It is also important to analyse what went wrong and keep improving your trading skills.

Trade safe and prosper.

KP

I was referring to the fact that what happens in a trade is unknown and always will be. That doesn't mean you cannot make a profit. It just means the unexpected can happen at any time. It is like planning a picnic for next Saturday and it rains. It is not your fault. You just reschedule it. Tell yourself that trade rained on me, and then prepare for the next one. One thing for sure...there is always another trade.

For me study and work hard is much the same as riclater211 wrote. There are many, many, many ways to trade. Some profitable. Some not. Somewhere in FF I discussed figuring out your niche, but I don't remember where now. Basically, only you can decide how you want to trade. The first decision should be the time frame. Do you have to watch trades, or can you set-and-forget? This will determine your sleep cycle. Then determine what skills you possess that can be applied to the market. Do you have any training? If not, you might have to learn some things. I had never seen C++ before, so I had to learn it enough to be dangerous, lol. If you have a math background, perhaps you will want to use oscillating indicators. If you like to read, perhaps you will trade news. If you just want to scalp for a few pips every now and then, perhaps you will use support/resistance methods.

I won't get too detailed because it is all up to you. For this thread you wanted to know how to accept losses. Maybe you never will, but if you have ever played sports, or a board game, then it is likely you lost. Just because trading uses money does not mean it has any more significance as losing at anything else. Don't let the money affect your emotions. Concentrate on the process you use to place trades. As Marcus Lemonis likes to say, business is made up of people, products, and processes. You are the people. Your Forex graph is the product. All that is left is the trading process you use. There is no money until you accomplish these three things. Money is just a by-product. If the money bothers you too much, be sure it is money you do not need for survival. The best thing is probably to only demo trade until you are confident. Anyway, sorry for the novel. Don't take losses personal, and don't let individual ones bother you. On my spreadsheets where I track money, wins, and losses, it is all done on a weekly basis, not daily. This makes all my data accumulative in order to show that over time, the results of winning trades surpass the results of losing trades. It changes the focus of winning and losing to an overall result. Just like during a basketball game the lead can change often. The winner is not known until the end of the game. Each missed shot has less impact than the overall result. If you try to trade for an overall result, rather than focusing on winning every time, then individual losses might not matter so much. Good Luck.

An old trader told me one time in his old scruffy smokers voice when I made a really bad trade and just couldn’t get out of the rut. I asked him what I could do I knew I was a good trader. He said Anthony, Always remember this, an education is never free you have to pay for it. Right now you are paying for it. Now, you have to make sure that education was worth the payment. Don’t let the education be for nothing. That wisdom has kept me balanced in my trading. I have made mistakes since then, but I use those lessons to better my trading and the education has paid off.

Happy Trading Everyone!

Lower your dreams significantly.
In all cases, stop watching 'James Bond' forex videos.
All this does is motivate you to also lose your pant.

Again, understand that none of us would be here if we had the actual answer to your question.
___
Wiered 'DOG-eat-dog' world.

Wao! Great thought

I like what you said.

Wao! That was awesome!!

Thanks a million for this insightful comments