You’ve lost a trade. So what.

You’ve lost a trade. So what.

This is how we deal with losing trades, and it works every time.

Ever seen a fighter right before they hit the mat? The moment their brains realize they’ve been beaten, their bodies literally freak out. Adrenaline floods the bloodstream to prepare for the submission. Once it’s all over, their brains release a ton of cortisol, a chemical that actually makes them feel worried and unsafe.

Losing is never easy. It’s a biological fact.


But we’re not going to waste a blog telling you that losing sucks, physically and mentally. We all know that—no matter how often your parents and teachers drilled it into you as a kid that it’s not winning or losing that matters, but how you play the game.

Instead, we’re going to tell you two things that will change your trading psychology forever by helping you shake off the guilt and rethink losing.


Number one: winning is never easy either.

It was Halloween 2003 and the waves in Kauai, Hawaii, were perfect. 13-year-old Bethany Hamilton and her family took their boards out for a morning surf. In minutes, Bethany was in serious trouble. A nasty, 14-foot tiger shark ripped off her left arm completely at the shoulder.


Losing is never easy. It’s a biological fact.


Bethany lost over half her blood that day and was this close to dying. In a month, she was back on her board. Today, Bethany Hamilton is a name in competitive surfing.

Losing is hard, but winning is harder.

The next time you lose a trade, don’t wallow in defeat. Disengage, recharge and hit the market again, determined to make better, smarter trades tomorrow.


Number two: It’s not all about you.

Egos aren’t all bad. They give you your competitive drive and unique identity. But for traders, egos can be toxic, because when everything is about you, nothing is about the trade. To be a successful trader, you need to turn that equation around and make everything about the trade.

First thing, don’t sweat it if you do lose a trade. Colonel Sanders went broke before he landed on the recipe for success. Steve Jobs got fired from Apple. Bethany Hamilton lost an arm. Don’t freak out if you lose one trade. Actually, as we’ll see below, you should expect to.


The next time you lose a trade, don’t wallow in defeat. Disengage, recharge and hit the market again.


Two, trading is a business. Businesses have overhead, like electricity, equipment, and personnel. Does paying electricity every month put you in a funk? Probably not. So learn to rethink last week’s losing trade as an investment in tomorrow’s winning trades.

And never forget that losing is always relative. A 40/60 win-loss ratio may feel like paying a €200 water bill, but if you’re hitting a 70/30 profit-loss ratio, your losses are just minor operating expenses. The quality of your wins far outweighs your losses.

That’s how we think about it and we sleep easy at night.

Three, the market is wildly unpredictable. Unexpected fluctuations in the market and in the world are par for the course and you can never plan for them. So stop dumping on yourself for failing to catch them and keep focused on your algos, because it’s your algos that are going to pull you through.

At the end of the day, what separates the Steve Jobses and Bethany Hamiltons of the world from the rest of us is their daily dedication. No matter how hard they got hit, they went back to it.

What makes their stories so inspiring is that anyone with the same enthusiasm, discipline and focus can get there too.


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