I see it all the time, income traders battling a trade at any cost. Sitting there hour after hour, day after day completely stressed out; using too many resources and taking on way too much risk just so they can win. It’s as if their life depends on winning the trade.
This usually happens because the trader is attaching some sort of meaning to the trade. They’ll think something like “if I lose this trade that means I’m never going to make it as a trader” or “if I lose this trade that means I’m a loser” or “if I lose this trade then I will never be financially free”.
That is an awful lot of pressure to put on yourself, and it’s completely untrue.
If you’re a trader, losing trades is NORMAL. In fact, anyone who is successful at anything loses, and they lose often. It’s just a part of the process and losing trades is something you’ll need to embrace in order to be a successful trader.
Another reason you need to embrace losses is because being stressed out month after month, you’ll make poor decisions, break from your trading plans, jump from one trading system to another and eventually burn out, even if you’re winning. So let’s look at a way to change your perception.
Look at the big picture. Think of trading as a glorious war campaign and each trade as a mere battle toward your ultimate end.
Any great General knows that winning a war means fighting many battles. He knows how to objectively monitor his forces and look at the situation to identify when the risks of losing resources outweigh the benefits of winning the battle. He also is aware that there may be times when the battle is going perfectly fine and there is more opportunity elsewhere. When he identifies these situations, he calmly and purposefully pulls out of, or loses, the battle to conserve his resources his and redirects them to where they will be the most effective. He does this because he knows that this is the way to win wars.
This is how you must think as a trader. When you look at the big picture, you’ll find that everything fits into place. Decisions and choices become easier, losses are more easily coped with, victories don’t go to your head and the process becomes simple.
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Live with passion!