Losses are part of trading. Nothing is bad about having lost trades; it doesn't say whether or not you're a good trader. What is important is how a trader manages their trades, and whether their win ratio is higher than their loss ratio. If you're wondering how to manage losing trades, our answer for you is to build a ‘good’ trading system that can provide consistent profit. Here are couple things that need to be considered when striving to make consistent profit.
|Finding your right trading system takes time and repeated efforts, don't give up!|
1. Finding a Good Trading System.
There are lots of trading strategies out there. It is a trader's job to find one or more strategy(ies) that suits their trader psychology and life style. Then, learn the upside and downside of the chosen system, technical analysis, market behavior etc, until the trader can implement all knowledge related to the system to form and sharpen their own trading style. Keep practicing on the system, especially in the beginning. Practice makes perfect.
2. Set Trading Rules.
Then, they have to understand and follow the rules that they have set. This is important; that way, if an unexpected event occurs a trader can execute the trade without the influence of emotion and avoid mistakes. Most of the time, a loss is the result either poor market conditions or a wrong decision made by fear or greed. A good trader allows the their trading plan to make decisions rather than any emotional responses they have to the market.
3. Money Management.
Traders should find their own comfortable percent risk, a percent level where a trader will feel okay with either a loss or profit. It should be balanced with the hours they spend on trading.
To find one good trading system that brings cash flow takes lots of time and huge effort. It is important to really understand that this is a learning process that needs time, not an instant way of making money. If one system fails, then do research and find another system, so on and so forth.