Taking a loss is one of the coolest thing in Trading!!

Yes! You read that right. You must have probably read that heading a couple of times just to make sure you read it right. There are a few axioms associated with Successful Boring Trading and Taking a loss and being cool about it is one of them.

At the outset let me make it amply clear (you already know this) that you are going to have a loss at some point of time in your trading. Now this could be once in a while (depending on how good your trading system/approach is) or it could be a string of losses (I will address how to handle a losing streak in a separate article). Either ways YOU WILL HAVE A LOSS AND YOU HAVE TO DEAL WITH IT. PERIOD.

How you deal with a loss determines what kind of a trader you are. The great ones just love taking a loss. They love it because they understand, appreciate and realise that they or their system have gone wrong and the predetermined loss point has hit. They take the loss and move on to the next trade. Almost with robot like precision. And it has to be robotlike. You can’t harp on a losing trade cause you would lose the next money making opportunity which presents itself.

As a Boring Trader, I think taking a loss is the coolest thing. It makes me realise, rather quickly, that I have made a mistake and lets me get out with MINIMUM DAMAGE. How cool is that? This is possible by having a predetermined Stop Loss. I will address various Stop Loss techniques in a separate post. But seriously, think about it. You are in the midst of a trade which you are reasonably confident about, yet it goes the other way and hits your stop loss. You take the loss, think for a moment or two if the reverse position needs to be taken and move on. Cool as a Cucumber. It’s that easy…..You think so? Nah, it is not that easy because it involves losing MONEY and nothing is easy when money is involved, especially losing it.

Taking a loss

So how am I so cool about losing. Easy..Remember Discipline??? YOU have to inculcate the DISCIPLINE of cutting your losses short and let your profits run (I might add).

So the next time you put on a trade and it goes the other way and hits your stop..be cool about it..know that it could have gone much worse..think if a reverse trade needs to be taken and move on…This will take practise..a lot of it but trust me you will be glad you did it in the end.

Go ahead..Be Boring and Make some money!!

To your Boring Success!!!

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