iCharts Discussions

[svkum]

a post by MR poddar of invest-mint
more relevent today and always.(reproduced )
Don't try to make a profit on a bad trade. Just find the best way to get out.

We are taught from young age that "winning isn't everything; it's the only thing." When we lose, we feel ashamed and humiliated- which is why we do everything possible to prove to our families and the world that we are winners. This type of thinking shows up in every area of our lives, including our jobs, relationships
and trading.
The bottom line is this: We all want to win and succeed because it is ingrained in our collective psyches.

If we are winning, we are "on a roll" and give ourselves positive messages to keep winning. If we are losing, we try harder and harder, but a subtle shift occurs. We move from trying to win to trying not to lose. Ironically, the more we try not to lose and tell ourselves that we must stop losing, the more we lose.

Winning traders feel happy, confident and good about themselves. Contrast this with the losing trader who is constantly trying not to lose. These traders have a tendency to dig themselves deeper into losses because they do not yet understand a fundamental tenet of trading success: It is both necessary and natural to lose

The beginning trader believes every trade must be a winner.

Trading is a game of probabilities; thus, it is paramount to understand that is it perfectly natural to lose. Successful traders always make more money than they lose. One major reason for this is that they understand the game they are playing. They also do one critical thing that losing traders do not do -- they embrace and manage risk. In other words, they identify the risk involved in every trade and they quickly cut losses when the ratio of risk to reward is no longer favorable. At the same time, they hold on to profits and may even increase position size if the risk/reward remains favorable. Winning traders do less of what is not working and more of what is working. They are trying to win, rather than trying not to lose.

The more you resist taking a loss, the larger the loss becomes and more desperate you become not to lose. Once you totally relax into the trade, let your rational brain take over from the grasping, clutching emotional brain, you see that the best way to win is to let go.

The takeaway from this is simple. Winning is not the same as trying not to lose. Great traders may struggle, but not to the point where they are in the vise of the Chinese Finger Cuffs. They know and understand completely that losing is often the only way to win. They have learned to surrender, accept and move on. Once you practice doing this with your own trading, you will find a new sense of freedom and a new happiness. Moreover, you will preserve your capital to play the game another day.

[bharatpatel]

[saumya12]

Yes, it is a difficult task to get rid of a loosing trade.
But we must get rid of it, otherwise most of the time, the loss will keep on increasing.
Thanks for the post

[Exness Official]

Frustration may be an occupational hazard for forex traders, as losses and even huge drawdowns can happen every now and then. This can result to self-doubt and a lack of confidence in one’s trading plan, which can then lead to overtrading or poor decision-making in an effort to make up for one’s mistakes.

Reflect on your trading experience for a moment and think of an instance wherein you felt frustrated with your performance. Were you able to think clearly with your next trades? Did you take your losses personally and start questioning if trading is really for you?

Traders are competitive by nature and it is precisely this characteristic that makes us vulnerable to being extremely frustrated with losing trades. The good news though is that it is possible to deal with this negative emotion and prevent it from affecting your trading decisions.