If you decided to become a trader, the first question you should ask yourself is: “Am I willing to lose money?”. If the answer is no, trading is not for you. If you said yes, then it’s time to serious start thinking about trading. By nature trading is an activity that involves losses and you need to be psychological prepared to deal with them. Every trader will lose money at some point and even the best traders on Wall Street they all had their bad moments. The key to success is to cut losses short and let the big winners run. Not cutting loses is one of the major causes why most people fail in trading. Instead of closing losing position and move on to the next one, many get caught in a dangerous process which will be hard to exit. As humans, it’s hard to admit we were wrong and a multitude of questions and doubts tend to invade our mind. What did I do wrong?; I am sure the market is being manipulated; the market is rigged; I should have sold when…; what if I just…; if this, if that.
Licking the wounds and blaming everything and everyone will not solve anything. Once in a while we all will be wrong, we just need to evaluate what we did wrong and move forward. Learning from our own mistakes is the best way to avoid new ones in the future. An easy way to see trading is like a house. Each trade you make is a brick, and one by one you will start compounding them in order to build the walls. Slowly and patiently with the right method(s) and tools, results will start to appear and your confidence will grow. Remember, we are here for the long run so don’t try to push things and stick to your method and rules. Patience is a virtue and will pay off one day.