Losing a trade or a row of trades is never fun. It can make you frustrated and unhappy. And who can blame you for feeling that way. A loss of capital can cripple your account making it harder to get to where you want to go.
That is definitely why you want to lose as little capital as possible when you are wrong. It is all about risk management.
But so many people forget that you trade more than just money when you trade. You are affected mentally every time you place a trade. Your confidence grows when you are on a winning streak. You feel like you can do no wrong.
However the flip side is also true. When you are on a losing streak you can feel terrible. You can feel like you never want to trade ever again. It can be hard.
The market come with surprises and can definitely get the better of you at times, no matter how good of a trader you are. They just can’t be controlled.
But even though we can’t control how the markets will move what we can control is how we react to them. If we have just been beat up we can choose to do one of two things. We can say we never should have traded in the first place and walk away or we can learn from our mistakes and use it to become a better trader.
Trading is a game that you are constantly learning how to improve on. I am confident that every year I become a better and better trader. When I make a mistake I quickly learn from it and apply what I have learned in my future trading.
If you want to be successful in trading you have to do the same. There is no way around it. Concentrating on learning from your mistakes and building your confidence are the two most important parts of mental trade management.
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