Traders Not Trades Bring Wins or Losses
To win or lose a trade is a familiar thing. We have experienced bot the joys and pains of it.
However in considering the loss of a trade, the strategy is usually sound, it is the trader that came up short.
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.
No discussion of position entry is complete without a thorough explanation of stops. But I'm left to wonder why so few investors use stop-losses. If you're guilty of not using stops, you need this information. It might just mean the difference between retiring on time with a healthy nest egg or retiring later and still just "scraping by."
Plan and place stops equals your plan to win, and you are prepared to have a loss but make it through to continue trading. A look at the traders psychology of loss taking is in order 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.) When a stock is losing, do you have a guide that lets you know when to sell?
3.) Do you have a rule of when to move your stop to break-even?
If the answers to these questions elude you, you are not unique. What it says though, is that you need to get some regulations set for yourself, particularly when going to short stocks. But these trading rules won't amount to a hill of beans if they aren't used. If you aren't using them you need discover why it is you don't manage your risks in a professional and non passive style.
There are 2 base reasons why Investors won't take a loss:
1. Admit they are wrong? No Way!
Though not really avoidable, a loss is seen as a personal failure. This is a painful thing to admit for a large portion of traders, like it illustrates failure at life. It also takes away from their positive self image.
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.
Losses aren't just on paper, they are real. The loss is what it is and the quoted price is it's value.
Both of these examples are a form of self-delusion that millions of investors, both large and small, suffer from. Just look at AIG, Merrill Lynch, WAMU, Lehman, etc. ... and you can take comfort in the fact that self-delusion is no respecter of income bracket or social standing.
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.
Winning and losing traders have a different view of the pain from a loss, winners don't take it personally. They look at the loss and see that they need to change their approach or execution not that they are personally flawed.
Winning traders separate who they are from what they do. They know, or learn, that their trading faults lies in their approach or their skill level but not in their fundamental worth as a person. The pain they feel is quickly transmuted into motivation, which fuels their desire and determination to become a better trader.
These are responses you learn and you can control them. Losses bring pain AND the possibility for growth. It is all in what action we take after the pain comes that is most important, not the actual losses.
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. - 23167
However in considering the loss of a trade, the strategy is usually sound, it is the trader that came up short.
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.
No discussion of position entry is complete without a thorough explanation of stops. But I'm left to wonder why so few investors use stop-losses. If you're guilty of not using stops, you need this information. It might just mean the difference between retiring on time with a healthy nest egg or retiring later and still just "scraping by."
Plan and place stops equals your plan to win, and you are prepared to have a loss but make it through to continue trading. A look at the traders psychology of loss taking is in order 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.) When a stock is losing, do you have a guide that lets you know when to sell?
3.) Do you have a rule of when to move your stop to break-even?
If the answers to these questions elude you, you are not unique. What it says though, is that you need to get some regulations set for yourself, particularly when going to short stocks. But these trading rules won't amount to a hill of beans if they aren't used. If you aren't using them you need discover why it is you don't manage your risks in a professional and non passive style.
There are 2 base reasons why Investors won't take a loss:
1. Admit they are wrong? No Way!
Though not really avoidable, a loss is seen as a personal failure. This is a painful thing to admit for a large portion of traders, like it illustrates failure at life. It also takes away from their positive self image.
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.
Losses aren't just on paper, they are real. The loss is what it is and the quoted price is it's value.
Both of these examples are a form of self-delusion that millions of investors, both large and small, suffer from. Just look at AIG, Merrill Lynch, WAMU, Lehman, etc. ... and you can take comfort in the fact that self-delusion is no respecter of income bracket or social standing.
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.
Winning and losing traders have a different view of the pain from a loss, winners don't take it personally. They look at the loss and see that they need to change their approach or execution not that they are personally flawed.
Winning traders separate who they are from what they do. They know, or learn, that their trading faults lies in their approach or their skill level but not in their fundamental worth as a person. The pain they feel is quickly transmuted into motivation, which fuels their desire and determination to become a better trader.
These are responses you learn and you can control them. Losses bring pain AND the possibility for growth. It is all in what action we take after the pain comes that is most important, not the actual losses.
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. - 23167
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 X - Men @ 5:58 AM
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