How to learn to IGNORE the failure in trading.

[K-Pia]

Not always!

You can do the right thing, the right time, and still lose if you stare at the screen and watch price suddenly reverse and go against you.

The reason you lost, is simple, as you did not react to what price was doing!

Many trade thinking they will be right, but the reality is that you can never know if you will be right or wrong, and all you can do is place the trades where and when you believe the odds are high that price will go the way you think it will.

This all sounds simple, which it is, once you find out how to work out the best odds, and, depending on your time frame, set the correct stop level, be it mechanical or visual - but if you trade without identifying the correct stop level, well, you are not only gambling, you are now gambling recklessly, which is not a good thing to do in the financial markets.

Fools and their money are easily parted!

J_S

Really nice post.

You're right.
Good decisions can lead to bad outcomes.
Not every tick is the same down there.
So the right thing, the right time ...
It's still full of uncertainty.

But in average one should be rewarded.
Otherwise it's not the right thing, the right time.
Haha. Among the right thing is minimizing it's downside.
So Yeah ... Set a SL either mentally or physically.
It's way too costly to turn losers into winners.

 

[J_Smith]

Really nice post.

You're right.
Good decisions can lead to bad outcomes.
Not every tick is the same down there.
So the right thing, the right time ...
It's still full of uncertainty.

But in average one should be rewarded.
Otherwise it's not the right thing, the right time.
Haha. Among the right thing is minimizing it's downside.
So Yeah ... Set a SL either mentally or physically.
It's way too costly to turn losers into winners.

to be right..use your sight
price will go..to and fro
when stars align..that is the sign
click the mouse..become the house

now your in..will you win?
it will depend..how long you spend
for in too long..becomes a song
and danger be..it "Tragedy"

the best of time..is when the chime
do sound so clear..so nice in ear
for things to be..the way you see
you must agree..the ways but 3

J_S

 

[Maverickz]

Making money in the market is all about risk management or eliminating big losses by whatever means necessary (can be via position sized to the account, hedging, options, stop loss orders, or whatever).

When you make a trade there are only 5 possible outcomes:
1. Win big
2. Win small
3. Break even
4. Lose small
5. Lose big

Obviously break evens neither help nor hurt. Small wins and small losses over time cancel each other out. So if you can just prevent yourself from taking huge losses, what you are left with are the big winners. You only need to win big about 1/3 of the time to make money. Yet with some practice you should be able to easily be right 60-80% of the time. I think most, if not all, of the time people blow their accounts it was because they allowed too much risk at once and didn't stop big losers. I cannot think of a single person that wiped their account out slowly over hundreds of small losing trades. It's always a one to a few really big losing trades that does them in.

 

[K-Pia]

Making money in the market is all about risk management or eliminating big losses by whatever means necessary (can be via position sized to the account, hedging, options, stop loss orders, or whatever).

When you make a trade there are only 5 possible outcomes:
1. Win big
2. Win small
3. Break even
4. Lose small
5. Lose big

Obviously break evens neither help nor hurt. Small wins and small losses over time cancel each other out. So if you can just prevent yourself from taking huge losses, what you are left with are the big winners. You only need to win big about 1/3 of the time to make money. Yet with some practice you should be able to easily be right 60-80% of the time. I think most, if not all, of the time people blow their accounts it was because they allowed too much risk at once and didn't stop big losers. I cannot think of a single person that wiped their account out slowly over hundreds of small losing trades. It's always a one to a few really big losing trades that does them in.

Totally agree with you.
Shuffle these four :
1. Win big
2. Win small
3. Break even
4. Lose small

And you make a killing.
Even if odds are against you.
Of course ... Up to a point, you lose.

However if you have no clue about the underlying...
It won't work assuming you're not lucky.

My two (three) mentors in trading are :
- Antifragile, Anticipatory & Empiricism.

 

[i am nobody]

This is why a person needs to place real trade's in order to determine what level his anxieties would be, when dealing with a loss.

For me it was better to build extreme confidence. Extreme confidence will reduce the fear for failure. I replayed past data over and over again to prove myself (mentally) that I should take all the signals generated by my system and follow the rules, because a huge percentage (will not put a % anymore the avoid reaction from bashers) will be winners and losses will be very small. By repeating this over and over again my fear for losses was overruled by fear of missing profits (the biggest fear will overrule the smaller one!). I noticed that not doing what the system told costed me money each time over and over again. In the beginning I gave all the signals to my broker and each time when I missed a good trade because of fear, he called me and annoyed me over and over again. Till the day I followed (almost) all my signals. And once I followed the system, I got confirmation in every trade that following the system was the only right thing to do. I made more money and smaller losses. Once you are over this point you have (almost) no fear anymore to do what the system tells you to do.

I also remember that in the beginning I tried to enter in such a way that, even if wrong, I could exit without a (big) loss. That would give me the possibility to try for free to make good trades. These good entries are very important now as it reduces losses and buys me time. It also reduces stress and fear as most of the time my trades go quickly in open profit and don't return in open loss. I noticed that the price to pay for this comfort is very small: you have to wait till the trend is confirmed and only then you enter. So no bottom/top picking. Just miss a small part of the move to avoid losses and have confirmation of the trend.

 

[radex78]

No one likes to lose money. A failure time haunts us from time to time. And our negative emotions can affect the next steps. Therefore, we really need an effective method to form our psychological stability. To be honest, don't like the idea to back to demo account.

It's eventually back to each trader, loss usually will influenced on emotion and if trader can't control emotion properly, usually will making reckless decision on next trade, maybe not all trader like back to demo, but will break awhile and walking to stay away from the chart to refresh minds

 

[Handle123]

No one likes to lose money. A failure time haunts us from time to time. And our negative emotions can affect the next steps. Therefore, we really need an effective method to form our psychological stability. To be honest, don't like the idea to back to demo account.

You and I have different definition of failure. Having well back tested Trading Plan in place takes the frustrations away from me. The only way I have failures is quitting and walking away from trading after having a loss. Having losing trades is part of trading and so long as I did right according the Trading Plan, it is NOT a failure or error.

Using wrong words not a good thing either, brain sees or hears patterns whether they are internal patterns of that you are thinking that is negative or chart patterns, the more you fed the brain of negative, the brain will get comfy with what you fed it so when you doing something successful, brain is in uncommon place and make you think you doing wrong, cause the brain is feeling pain. How many times have you been in profitable trade and feel like throwing up? If you are use to losing, brain sees profitable trades as the enemy. Once you turn this around to where you are consistently being profitable, the brain has been taught profitable is good, and it will allow you to take more profitable trades instead of finding losing trades.

Subliminal hypnosis is great, but you play this music and with music your subconscious picks up what you trying to overcome. n playing them for years, music is usually relaxing. This is an example as there many different sites around.
http://www.chargedaudio.com/about.html

 

[i am nobody]

"How to learn to IGNORE the failure in trading." ???

By following the rules of your system. Not following the rules = failure, that's all.

Failure has nothing to do with profits or losses.
Failure is about why you did, or did not, take a trade according your system.
Profit or loss is the result of any trade. Be it by following the rules or not following the rules.

 

[Zodiac4u]

For me it was better to build extreme confidence. Extreme confidence will reduce the fear for failure. I replayed past data over and over again to prove myself (mentally) that I should take all the signals generated by my system and follow the rules, because a huge percentage (will not put a % anymore the avoid reaction from bashers) will be winners and losses will be very small. By repeating this over and over again my fear for losses was overruled by fear of missing profits (the biggest fear will overrule the smaller one!). I noticed that not doing what the system told costed me money each time over and over again. In the beginning I gave all the signals to my broker and each time when I missed a good trade because of fear, he called me and annoyed me over and over again. Till the day I followed (almost) all my signals. And once I followed the system, I got confirmation in every trade that following the system was the only right thing to do. I made more money and smaller losses. Once you are over this point you have (almost) no fear anymore to do what the system tells you to do.

I also remember that in the beginning I tried to enter in such a way that, even if wrong, I could exit without a (big) loss. That would give me the possibility to try for free to make good trades. These good entries are very important now as it reduces losses and buys me time. It also reduces stress and fear as most of the time my trades go quickly in open profit and don't return in open loss. I noticed that the price to pay for this comfort is very small: you have to wait till the trend is confirmed and only then you enter. So no bottom/top picking. Just miss a small part of the move to avoid losses and have confirmation of the trend.

not meaning to say, don't do your home work or don't practice until your comfortable. the only way to get your feet wet is by placing them in the water. Dealing with anxieties that affect our decision making process, one must hit them head on. you must put your metal to the test to see how well you do in a real environment. Its not fun, but that's how the conditioning process works. until your in, your not really in and the longer you stay in, the quicker you recover from your anxiety. Fear is not real!

Spielberg said,

"The more frightened I am, the more I have to run into what's scaring me to figure out what it is.”

Spielberg also said,

"The work that I'm proudest of is the work that I'm most afraid of."

 

[J_Smith]

Making money in the market is all about risk management or eliminating big losses by whatever means necessary (can be via position sized to the account, hedging, options, stop loss orders, or whatever).

When you make a trade there are only 5 possible outcomes:
1. Win big
2. Win small
3. Break even
4. Lose small
5. Lose big

Obviously break evens neither help nor hurt. Small wins and small losses over time cancel each other out. So if you can just prevent yourself from taking huge losses, what you are left with are the big winners. You only need to win big about 1/3 of the time to make money. Yet with some practice you should be able to easily be right 60-80% of the time. I think most, if not all, of the time people blow their accounts it was because they allowed too much risk at once and didn't stop big losers. I cannot think of a single person that wiped their account out slowly over hundreds of small losing trades. It's always a one to a few really big losing trades that does them in.

Making money, or losing money, is as a result of your actions, which means your entering and exiting your trades.

Why you enter, or exit, will depend on what you use, be it a manual or automatic decision making process.

For most it is manual.

To calculate the odds of price moving in your favor, there are but 3 things that you need to be aware of, for either decision making process.

Failure to be aware of these 3 things will invariably lead to losses.

The level (size) one decides to take it to, is a personal decision, so whatever anyone else does is totally irrelevant.

J_S