Traders Not Trades Bring Wins or Losses
Wins and Losses are familiar to us all, the pain of loss and the joy of a win. There is no confusion there.
However in considering the loss of a trade, the strategy is usually sound, it is the trader that came up short.
Yes, that probably means you. But, today I'm going to talk about how to stop losing money and become a winning trader. Before you even place an order, deciding where to buy or sell is always connected to where you place your stop-loss order.
If you want to talk about position entry, it should include a comprehensive explanation of stops. Why do so many investors fail to take advantage of stop losses? It you are one of those not using them, listen up, you'll want to know this. Stop losses can spell the difference between meager late retirement and on time comfortable retirement.
Plan and place stops equals your plan to win, and you are prepared to have a loss but make it through to continue trading. A look at the traders psychology of loss taking is in order here.
Every pro trader has to have a point in their minds denoting when they will get out, before they will get in. This has to be known before hand so that when the moment comes they can get out quick. This is a down-home basic knowledge the each pro-trader has to have.
Are you able to respond to these questions?
1.) What are the indicators for staying put, or getting out?
2.) When a stock is losing, do you have a guide that lets you know when to sell?
3.) When do you move your stop so that you break-even?
If you can't answer these questions, you're not alone. And what it means is that you need to establish some rules for yourself, especially when you go to short stocks. But, all the trading rules in the world are meaningless if you don't use them. That's why you and I need to "talk turkey" about what's really going on with you when you refuse to manage your risk in a proactive and professional way.
Many investors refuse to take a loss for two basic reasons:
1. Admit they are wrong? No Way!
A realized loss is a great big unavoidable acknowledgment of wrongness. For many traders, this is just too painful to admit. It's interpreted as an allegory for a total life failure or feeds a persistent, negative self-image.
A trader like this experiences real pain from the loss, and would rather deny it than fess up to the fact that it is giving them the pain. Quite often it requires a total loss before he can begin to change. To quit trading is the only other alternative.
2. Taking that large of a hit would damage their portfolio greater than it can recover from.
The loss is a real loss, it is not solely on paper, the stock/bond option has the value of the quote, even if you don't see it.
Both of these examples are a form of self-delusion that millions of investors, both large and small, suffer from. Just look at AIG, Merrill Lynch, WAMU, Lehman, etc. ... and you can take comfort in the fact that self-delusion is no respecter of income bracket or social standing.
Are you squirming in your seat because as you read this article you feel powerless and/or angry? That is a good thing. It tells you that you are ready to make the change.
The winning trader uses a different strategy from the losing trader by regarding the pain from the loss in an impersonal way. They use the loss as a sign that something went wrong with their approach, or their execution, but NOT that something is wrong with them.
A winning trader distinguishes himself from what he does. They are aware that their worth as a human being is not linked to their skill at trading, but that they will need to increase their skill and experience to improve their approach and execution. They use the pain they feel to motivate themselves and increase their drive to be a better trader.
These are responses you learn and you can control them. Losses bring pain AND the possibility for growth. It is all in what action we take after the pain comes that is most important, not the actual losses.
Stick with my proven ETF Trend Trading system and make winning a habit. Study; ask questions and monitor your position size relative to your portfolio and you will end up on the winning side more often than not.
"Proper Stops and risks" are main points in my program and reminding you constantly of that is an important part of my mentorship program. Once you have gone through my program completely and thoroughly understand it, you will still want me to tell you "Don't move your stop" and "Be sure to take profits when my system tells you to, not earlier or later" In fact the mentorship program is probably valued higher than the course itself. - 23229
However in considering the loss of a trade, the strategy is usually sound, it is the trader that came up short.
Yes, that probably means you. But, today I'm going to talk about how to stop losing money and become a winning trader. Before you even place an order, deciding where to buy or sell is always connected to where you place your stop-loss order.
If you want to talk about position entry, it should include a comprehensive explanation of stops. Why do so many investors fail to take advantage of stop losses? It you are one of those not using them, listen up, you'll want to know this. Stop losses can spell the difference between meager late retirement and on time comfortable retirement.
Plan and place stops equals your plan to win, and you are prepared to have a loss but make it through to continue trading. A look at the traders psychology of loss taking is in order here.
Every pro trader has to have a point in their minds denoting when they will get out, before they will get in. This has to be known before hand so that when the moment comes they can get out quick. This is a down-home basic knowledge the each pro-trader has to have.
Are you able to respond to these questions?
1.) What are the indicators for staying put, or getting out?
2.) When a stock is losing, do you have a guide that lets you know when to sell?
3.) When do you move your stop so that you break-even?
If you can't answer these questions, you're not alone. And what it means is that you need to establish some rules for yourself, especially when you go to short stocks. But, all the trading rules in the world are meaningless if you don't use them. That's why you and I need to "talk turkey" about what's really going on with you when you refuse to manage your risk in a proactive and professional way.
Many investors refuse to take a loss for two basic reasons:
1. Admit they are wrong? No Way!
A realized loss is a great big unavoidable acknowledgment of wrongness. For many traders, this is just too painful to admit. It's interpreted as an allegory for a total life failure or feeds a persistent, negative self-image.
A trader like this experiences real pain from the loss, and would rather deny it than fess up to the fact that it is giving them the pain. Quite often it requires a total loss before he can begin to change. To quit trading is the only other alternative.
2. Taking that large of a hit would damage their portfolio greater than it can recover from.
The loss is a real loss, it is not solely on paper, the stock/bond option has the value of the quote, even if you don't see it.
Both of these examples are a form of self-delusion that millions of investors, both large and small, suffer from. Just look at AIG, Merrill Lynch, WAMU, Lehman, etc. ... and you can take comfort in the fact that self-delusion is no respecter of income bracket or social standing.
Are you squirming in your seat because as you read this article you feel powerless and/or angry? That is a good thing. It tells you that you are ready to make the change.
The winning trader uses a different strategy from the losing trader by regarding the pain from the loss in an impersonal way. They use the loss as a sign that something went wrong with their approach, or their execution, but NOT that something is wrong with them.
A winning trader distinguishes himself from what he does. They are aware that their worth as a human being is not linked to their skill at trading, but that they will need to increase their skill and experience to improve their approach and execution. They use the pain they feel to motivate themselves and increase their drive to be a better trader.
These are responses you learn and you can control them. Losses bring pain AND the possibility for growth. It is all in what action we take after the pain comes that is most important, not the actual losses.
Stick with my proven ETF Trend Trading system and make winning a habit. Study; ask questions and monitor your position size relative to your portfolio and you will end up on the winning side more often than not.
"Proper Stops and risks" are main points in my program and reminding you constantly of that is an important part of my mentorship program. Once you have gone through my program completely and thoroughly understand it, you will still want me to tell you "Don't move your stop" and "Be sure to take profits when my system tells you to, not earlier or later" In fact the mentorship program is probably valued higher than the course itself. - 23229
About the Author:
Learn how it's very possible to make 6% per month in your investment accounts using etf trend trading! "Big A" is a recognized expert in the world of etf trend trading system & reveals trading & investment secrets that have been kept under wraps by hedge traders for years. Give him your email & get a free report & webinar today!
posted by X - Men @ 5:53 AM
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