Winners and Losers: It's Not The Trades It's The Traders...
Wins and Losses are familiar to us all, the pain of loss and the joy of a win. There is no confusion there.
With trading losses, the majority of the time the shortfall comes from the trader and no the trading strategy.
Uh huh... that is most likely you! However, help is on the way.... I am going to discuss ways to stop financial losses, and begin being a winner at the trades. Prior to placing orders, you have to decide where your stop loss order will be placed.
You can't delve into the topic of position entry thoroughly without speaking of stops. The question is, "Why are stop losses used by so few investors?" If not using stops is a weakness for you then you want this info. This info could mean the difference between on time retirement with a fat nest egg or just 'getting by' at a later retirement date.
When you have a plan for placing stops, your wins will out weigh you losses, and when the losses come you will come out on top because you will still be around to trade. The traders psychology of loss taking bears looking at here.
All professional traders understand they must know where they are getting out before they get in. They have to know ahead of time what a wrong trade looks like so they can exit it quickly. This is a rudimentary fundamental that EVERY professional trader knows the answer to.
Are you able to respond to these questions?
1.) How do you know if you should sit tight or cut your losses?
2.) Do you have a rule to tell you when to sell a losing stock?
3.) When do you move your stop so that you break-even?
Are you unable to answer these questions? You aren't alone. This indicated that you should be establishing some rules, especially when going to short stocks, but trading rules don't mean a thing if they aren't used. This is why we need to have a frank discussion about why you aren't managing your risks in a hands on way, like a pro should.
There are 2 base reasons why Investors won't take a loss:
1. They can't admit they're wrong.
For many traders a realized loss is a huge admittance of being wrong and that is just too hurtful to acknowledge. To them it is linked to being a failure at life and their self image is directly affected by this perceived failure.
The loss is personalized and pulls on their emotions. It is easier to deny the loss than own up to the pain of the loss. He will either lose everything before he will seek to change or he will quit trading.
2. The losing position is too big relative to their overall portfolio value so they can't afford take the loss.
The loss is a real loss, it is not solely on paper, the stock/bond option has the value of the quote, even if you don't see it.
These 2 situations are types of self-denial this problem is common with tons and tons of investors. Observe Merrill-Lynch, AIG, WAMU, Lehman.. and on and on.... you should be comforted to know that this self denial is not limited to just one income level or social status.
Are you feeling uncomfortable with what I am saying?... or powerless, or angry? Good! That is a sign that you are capable of making the changes you need to.
The winning trader uses a different strategy from the losing trader by regarding the pain from the loss in an impersonal way. They use the loss as a sign that something went wrong with their approach, or their execution, but NOT that something is wrong with them.
Separating themselves from what they are doing is what a winning trader does. Either they know it or learn that the problem is either in their approach or their skills not in their worth as a human being. Changing the pain of a loss into a motivational factor that increases their quest to be a better trader.
You choose what to do with the losses, grow from the pain or give in and quit. Using the emotions for positive growth is what is important, not the fact that you had a loss.
Utilize faithfully my verified ETF Trend Trading System and develop winning habits. Practice the principles, keep an eye on your position size relative to your portfolio and the product will be an overall growth in your portfolio.
My constant reminders about proper stops and risks are one of the strongest parts of my one year mentorship program. Even after you understand my system 100%, it's still good to hear me tell you, "Don't move your stop" or "Be sure to take profits when the system says to, not too early and not too late." Most my students like the mentorship part as much or even more than the course itself. - 23311
With trading losses, the majority of the time the shortfall comes from the trader and no the trading strategy.
Uh huh... that is most likely you! However, help is on the way.... I am going to discuss ways to stop financial losses, and begin being a winner at the trades. Prior to placing orders, you have to decide where your stop loss order will be placed.
You can't delve into the topic of position entry thoroughly without speaking of stops. The question is, "Why are stop losses used by so few investors?" If not using stops is a weakness for you then you want this info. This info could mean the difference between on time retirement with a fat nest egg or just 'getting by' at a later retirement date.
When you have a plan for placing stops, your wins will out weigh you losses, and when the losses come you will come out on top because you will still be around to trade. The traders psychology of loss taking bears looking at here.
All professional traders understand they must know where they are getting out before they get in. They have to know ahead of time what a wrong trade looks like so they can exit it quickly. This is a rudimentary fundamental that EVERY professional trader knows the answer to.
Are you able to respond to these questions?
1.) How do you know if you should sit tight or cut your losses?
2.) Do you have a rule to tell you when to sell a losing stock?
3.) When do you move your stop so that you break-even?
Are you unable to answer these questions? You aren't alone. This indicated that you should be establishing some rules, especially when going to short stocks, but trading rules don't mean a thing if they aren't used. This is why we need to have a frank discussion about why you aren't managing your risks in a hands on way, like a pro should.
There are 2 base reasons why Investors won't take a loss:
1. They can't admit they're wrong.
For many traders a realized loss is a huge admittance of being wrong and that is just too hurtful to acknowledge. To them it is linked to being a failure at life and their self image is directly affected by this perceived failure.
The loss is personalized and pulls on their emotions. It is easier to deny the loss than own up to the pain of the loss. He will either lose everything before he will seek to change or he will quit trading.
2. The losing position is too big relative to their overall portfolio value so they can't afford take the loss.
The loss is a real loss, it is not solely on paper, the stock/bond option has the value of the quote, even if you don't see it.
These 2 situations are types of self-denial this problem is common with tons and tons of investors. Observe Merrill-Lynch, AIG, WAMU, Lehman.. and on and on.... you should be comforted to know that this self denial is not limited to just one income level or social status.
Are you feeling uncomfortable with what I am saying?... or powerless, or angry? Good! That is a sign that you are capable of making the changes you need to.
The winning trader uses a different strategy from the losing trader by regarding the pain from the loss in an impersonal way. They use the loss as a sign that something went wrong with their approach, or their execution, but NOT that something is wrong with them.
Separating themselves from what they are doing is what a winning trader does. Either they know it or learn that the problem is either in their approach or their skills not in their worth as a human being. Changing the pain of a loss into a motivational factor that increases their quest to be a better trader.
You choose what to do with the losses, grow from the pain or give in and quit. Using the emotions for positive growth is what is important, not the fact that you had a loss.
Utilize faithfully my verified ETF Trend Trading System and develop winning habits. Practice the principles, keep an eye on your position size relative to your portfolio and the product will be an overall growth in your portfolio.
My constant reminders about proper stops and risks are one of the strongest parts of my one year mentorship program. Even after you understand my system 100%, it's still good to hear me tell you, "Don't move your stop" or "Be sure to take profits when the system says to, not too early and not too late." Most my students like the mentorship part as much or even more than the course itself. - 23311
About the Author:
Learn how it's very possible to make 6% per month in your investment accounts using etf trend trading! "Big A" is a recognized expert in the world of etf trend trading system & reveals etf secrets that have been kept under wraps by hedge traders for years. Get his free report & webinar today!
posted by Mr. Forex at
6:07 AM
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