Winston Churchill once said, "Success is walking from failure to failure with no loss of enthusiasm." Trading is no different than success with these words in mind. Any great trader or person striving for success in any field needs to be prepared for loss before growth. Traders like Shawn Lucas, Warren Buffet, George Soros, and many more started off trading with losses, not immediate wins, and that’s one of the most important things to remember when starting to trade.
Trading is not an easy skill to pick up and develop. The mindset in which you have to put yourself to trade is just that: this isn’t easy. Many who could’ve been great stopped because they got discouraged. Go into your trades knowing you could lose and knowing that is part of trading. If it were easy and winning was a not an issue, everyone would be millionaires. The best way to grow is to learn from mistakes and not dwell on them. Now, this doesn’t mean if you keep losing, keep trying for that period. There should be a set amount where if you lose that day or week, you take a break; however, you pick up again when it’s time and grow from your mistakes.
Asides from when you’re trading, making sure you’re in the mindset to trade is critical. Shawn Lucas developed the investor profile to analyze the type of trader you are and what your strengths and weaknesses are. The knowledge this grants you for trading can be used to say “yeah” or “nay” to trading at that time. Looking at how your mood affects your wins and losses will help find when you should trade in the future. All professional traders know when they should take the time off trading; now whether they do is a different story. Regardless of the choices made, knowing what mindset you’re in and how it will result in your profit or type of trading you do is a must.
One of the easiest ways to get yourself into the mindset you need to be in to trade is to go back and examine your recent wins. This is important for multiple reasons. The first is that it gives you the recent analysis of the markets you trade in and shows what you did correctly in your trading. You see average moves of recent markets and also trends to go off of. Losses can be important to look into as well, just not in as copious amounts as wins. When traders focus on their losses, they tend to be in a more revenge mindset which is a negative trading habit of many individuals. Honing in on your successes has a much more constructive consequence than fixating on your downfalls.
No matter how you choose to get into the right mindset to trade or if you decide to hold off on it for now until you’re in that proper mindset, trading under the proper conditions for yourself will make all the difference. Shawn Lucas or any other trader will tell you there’s nothing wrong with taking a day off if in your head, that day is going to result in a loss. Trade smart and come out on top.