Losses in financial trading and how to cope with them?
Like with any other “professionally” run business, Financial Traders are also prone to losses. While many businesses face more losses due to external reasons, failure in the business of financial trading is largely due to internal reasons, that is reasons confined to the concerned individual and his trading attitude. This is the reason why, traders haven’t been able to achieve consistent success in financial trading.
As I Said earlier, losses are inevitable to financial trader. But there are always ways to cope up with this. I can even go a step further and say that, losses arising out of a bad trade will be far lesser than a loss arising out of emotions like fear and greed to a certainty. Now we will see how to cope up with losses in financial trading.
A Single Isolated Event
Most people will construe a trade in a wrong manner. A Trade is a single unique entity and not a part of a larger event and if that culminates in a loss, be generous to embrace the loss and “move on”. Instead of trying to make a quick comeback.
I tell you, these quick comebacks hardly happen. But ensure that you are financially able to withstand the losses. I have come across many people, with the urge to make good of the losses, take many unnecessary loosing trades. Be wise.
Not a mint
Many misunderstand the financial markets as an easy and quick way to make big bucks. I advise against having any misconceptions like these when trading the markets. They think more trades translate to more money, it is not only that it is not the case, the opposite of the conception I true. It doesn’t matter have many trades you do, what really matters is how many successful trades you do. George Soros, A successful trader himself and a mentor to many once quipped ” It doesn’t matter how many trades you win or lose, what is more important is how much you make when you win and how much money you lose, when you lose. Be judicious and don’t be over greedy.
Even the experienced and professionals face loses, but they will have the resources and methods to tackle them, If you are a beginner, always keep your trading expenditure within the limits you can bear, don’t go for a trade on which you cannot take loses on. Understand that loosing is part of the game, try to mitigate it by knowing your limits and defining trades better!.