3 Things that my losses have taught me

I have been a consistently profitable trader for many years. I have gained countless experiences during my trading career. Now I make an effort in sharing the knowledge I have gained with those who are still learning the ropes of this unique career path. Trading has taught me many lessons. Even though I have seen great success in trading, making losses is part of the game, and regardless of how successful a trader is, there is not a single trader that is not making losses. As a matter of fact, the losses I have made taught me some of the most valuable lessons.

Get rid of emotions

Trading can be an exciting game. Naturally we feel good when we win, and bad when we lose. In trading, you need to be able to not feel anything when winning or losing. Whenever emotions get involved, such as feeling good when you win, you will ride a high that is unsustainable, and spiral into a depressive mood when losing. When your decision making process is based on your emotional feelings, you will quickly fall into a gamblers mindset, and make decisions without rationalizing your thoughts. This is a quick route to losing money faster than earning money.

Do not get greedy

After a winning streak, it is easy to fall in a similar mind trap. You will likely think  that you understand, and can play the game. As a result you will start to take on more risk. At some point you will take a loss unavoidably, and trade a much larger size then usual, or not place stop losses out of overconfidence, which can evaporate all your profits that you made with hard work and effort in one moment.

Risk management

Before you enter into any kind of position, you are probably thinking about how much money you might make of this to make the trade successful. But did you also thought about how much you will lose if your trade does not work out the way you anticipate? This is maybe even more important to consider when you think about the fact that with every loss you take, the risk you need to put on to make the same amount of money as you initially had in mind goes up. If you think about your potential loss first, this will help mitigate the damages, should you be wrong.

And a bonus one!

Stay Humble

Never assume you know everything. There is always something new to learn, seek inspiration from others, and support where ever you can. Everybody has started at the beginning, just like you once did. In the end, what is it all worth if there is no one to share it with?

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