A Brand New Day In Trading

How can you tell the difference between the most successful traders and those who struggle to get by? It's their attitude and their willingness to accept losses. As one of the most challenging businesses, trading requires a healthy balance between confidence and risk-taking. Setbacks and losses will occur, but to be a flourishing trader you won't let these stumbling blocks bring you down. It's not easy, but if you want to thrive, forget about today and face tomorrow fresh and new it's a brand new trading day!

The winning trader knows how to take losses in stride. Jesse Livermore, a notable early 20th century stock trader, was best known for making and losing several multi-million dollar fortunes during the stock market crashes in 1907 and 1929. Reminiscences of a Stock Operator, by Edwin Lefevre, reflects many of Livermore's lessons, exemplified in this quote: "Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it over night."

Livermore left traders a working philosophy for trading securities that emphasizes increasing the size of one's position as it goes in the right direction and cutting losses quickly. Ironically, Livermore said that the main reason for his losses was his lack of adherence to his own rules. You may be thinking, 'Easier said than done.' and while it is important to learn from your mistakes, you should learn how to be objective and unemotional in your dealings. But there are many traders who hold on to losing trades as emotional baggage. Their losing trades become evidence of their personal failures and inadequacy. They lose confidence and, in the process, allow their net worth to define their self worth. It can become a self-fulfilling prophecy; and whether you think you will fail or succeed - you are right.

Let's face it, trading losses are the nature of the beast. No one is perfect; there will be times that you experience loss. The sooner you accept that fact, the better. Your job is to avoid giving into pessimism. Instead, you must continually pick yourself up after being thrown down and courageously face market challenges with a fighting spirit.

Of course, optimism and objectivity alone won't guarantee your success. You must be realistic in your trades, and understand what you will consider 'acceptable risk'. To stay on top, you'll need creative thinking and be open to creating your own rules - as Livermore did and then follow them! Maybe you'll make more trades or expect less per trade. Or move into new sectors, trading commodities or bonds. No one said it would be easy; but with effort, practice, and an objective attitude, you'll find yourself adapting your trading style to new circumstances, instead of beating yourself up over yesterday's losses.

So, next time you hear a colleague complain about their losses, don't let it shake your resolve. Whatever the issue is, don't make it your problem. Just go your own merry way and keep searching for a new set, of tools that will make you profitable. They are out there. All you have to do is persistently search until you find them.

Remember - attitudes are contagious. Is yours worth catching?

Seed Newsvine

Bookmark this article in your preferred program

Comments

Add Comment

Popular Articles in this cathegory

This article is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.