Learn to Take Losses- Find Your Trading Edge
You did all your calculations, analyzed everything, and then analyzed it some more. You invested in the stock market and put yourself in a position where you’re sure you absolutely cannot lose—or so you thought.
Sadly, we live in an uncertain world, where dreams hardly do come true.
“What the heck” you sighed in disbelief, the next day. The numbers from stock market is exactly the opposite of what you had imagined. Now, as it stands, the trade that looked so favorable has left big holes in your pocket.
Not Every Trade Is Going To Be Successful
Sadly, this is something that many people don’t understand. Not every stock investment is going to leave you with big profits. There will be losses—plenty of losses if you’re a serious trader with a long-term approach. Ask this to anyone who invest in financial market, they are going to agree. In fact, winning percentage is the least important statistic as a trader—or at least that’s how it should be.
Don’t Care About Winning Percentage
Your 10 bad trades leave you short of $1000. But that one single investment made you $5000. Although you lost 10 times and won only once, you still managed to earn a big profit.
Instead of trying to make money from every trade, you should focus more on the amount of return you enjoy when you hit the bullseye. You must trade with confidence even when market conditions aren’t favorable and you’re suffering losses. How do you become more confident? By knowing your trading edge!
Find Your Trading Edge
People who know their trading edge don’t flinch and panic when taking big losses. One, they know that not every day is going to be bright and shinning. Second, they have their strategies and analysis well documented that ensure, in the extended period of time, they are going to get profited.
Trading edge is a personal approach that keeps a trader ahead from the crowd—an edge that gives her/him an advantage over other. It’s something that separates market sharks from small fishes, something that draws a line between trading and gambling.
You must have a well-defined trading edge that gives you the confidence—that tells you to take the small losses because you have put yourself in a favorable situation where there lies big profits ahead. It’s no surprise that confidence is a component to succeed in the stock market.
Keep your emotions at a bay when your trades are costing you, have a trading edge, be more confident, have a long-term perspective, and enjoy grand returns.