Am I Willing to Lose on This Trade?

[eldad 10]

Hi,

 

This week a very nice question pop into my mind while watching a stock on my list and thinking should I trade it or not, the stock was above my pivot price, it did had an uptrend but still it had some move that left me with strange feeling,

 

So I asked myself am I ready to lose money on this trade? Is this trade is a trade that if I will look in a week from now a year from now I will say yes I am willing to risk my money on it? The answer for this specific trade was no,

 

It didn’t end in this, it wasn’t just to say I am not willing to risk on this trade I said one more thing and I think it is a must when you choose to let go a trade, I am willing to accept the fact that this can be a winning trade, but I prefer to be outside,

 

In the past I did decide to pass on some trades but when I saw they reached the profits targets I thought, it ate me alive, “ahhh I just take losing trades and the winner I am too afraid to trade”, and to be sure the only ones I remember are the ones I didn’t took but made money, not the ones that saved me money or emotional costs,

 

If you are not preparing yourself to the possible outcomes you are illusioning yourself in more than a way, you must accept both possible outcomes you will give up on a winning trade or a losing trade, you should be o.k. with both options,

 

I do this to take just the best trades now days, so I will rebuild my confidence in my system and in me, I remember in “Reminiscences of stock operator” when Jessi Livermore after losing all in the third or fourth time had just one more options and he waits and says I will wait for my best idea not just any one, this is what I am trying now to do, to get back on the horse by riding the best ideas I can, not average ones, just the best.

 

So in order to eliminate the average ones I ask myself Am I willing to lose on this trade?

 

Make the odds in your favor Day Trade

 

Eldad Nahmany.

#tobecomeadaytrader

[SIUYA 11]

alternatively, work out how much you think you should make on the trade, and if its worth risking a loss multiple times on the same trade. This might give you more insight into why you want to enter in the first place.

Otherwise you will simply still take the losses and not make enough back to cover those.

[eldad 10]

Well it is not an alternative as I still need to ask if I am willing to lose this R amount, and i do use this system,

thanks,

[SIUYA 11]

Well it is not an alternative as I still need to ask if I am willing to lose this R amount, and i do use this system,

thanks,

 

only if you want to trade for losses.

I know your choices here are between taking a trade and regretting it or not..(hindisght is bitch).....but unless you thoroughly record every potential trade including those not taken (and this cant be trusted in hindsight) you have no idea about which ones becomes 'bad; or 'average' trades.

 

You say "So in order to eliminate the average ones I ask myself Am I willing to lose on this trade? "

Every trade you take you are deciding to risk a loss. That is a given.

 

As you have a 'system' and within this system a measure of discretion....ie;.you chose to take or not to take certain trades and the fact you have profit targets also indicates you have thought about what this trade might expect to make (or is this some random element?)

 

so --- as an alternative to simply asking --- am I willing to lose on this trade, you could also (or alternatively ask) is this trade good enough in its idea that i would be willing to lose multiple times, BECAUSE there is enough profitable reason for the trade.

as you say...

 

"If you are not preparing yourself to the possible outcomes you are illusioning yourself in more than a way"

[spareappeal 10]

actually nobody is willing to lose in any of the trade but it is sometimes bad luck which causes us to loose in the money . one should be enough strong to bear loosing the trade and also to improve and make some profitable trade .

[divyanshisharma 2]

USe Stoploss and Target to avoid all this emotional stuffs!

[CrazyCzarina 17]

Yes and when you think that you are not making money in the Forex Market, you should take a break from the Market.

[aimhi 10]

On 12/12/2018 at 4:50 PM, divyanshisharma said:

USe Stoploss and Target to avoid all this emotional stuffs!

Stop loss feature can help cut off loses earlier than they become too big to afford. Bad days can occur to professional traders as well however they are skilled money managers and use tight stop losses to eject from a bad trade as soon as possible.

[fxeconomist 11]

On 4/28/2022 at 12:27 AM, aimhi said:

Stop loss feature can help cut off loses earlier than they become too big to afford. Bad days can occur to professional traders as well however they are skilled money managers and use tight stop losses to eject from a bad trade as soon as possible.

Agree they mastered the art of cutting losses short and controlled drawdown is part and parcel of successful trading. 

[aimhi 10]

The professional traders are the one who actually turned out their losing trades into profitable in my opinion.

[fxeconomist 11]

On 5/10/2022 at 8:13 AM, aimhi said:

The professional traders are the one who actually turned out their losing trades into profitable in my opinion.

How is this possible bro? Do you mean they learn the lessons from their losing trades?

[aimhi 10]

Yes many lose money in forex trading and leave markets however some loses more while chasing their lost money. Those who let go off their loses and learn how to trade eventually become successful in future.

[CrazyCzarina 17]

Traders often fail because they don't take their trades seriously enough. Most inexperienced traders are looking for get-rich-quick methods and are not fully prepared for how they will enter the market. In fact, some inexperienced traders gamble without even realizing it.

[fxeconomist 11]

On 6/15/2022 at 10:45 PM, CrazyCzarina said:

Traders often fail because they don't take their trades seriously enough. Most inexperienced traders are looking for get-rich-quick methods and are not fully prepared for how they will enter the market. In fact, some inexperienced traders gamble without even realizing it.

Agree that's why I watched first Hotforex webinars to learn thoroughly emotional and psychological aspects of trading in order to avoid gambling 

[aimhi 10]

Many new traders go hunting for money in forex trading similar to gambling since they do not have the idea of whats going on in the market so they end up losing money. Better is to learn how the forex or any trading mechanism works in my opinion rather to end up wasting the time and money in this marketplace. 

[RJo 10]

Do not focus on any individual trade entry nor exit. Develop a trading strategy that is black & white with no gray areas in between. This makes the strategy quantifiable, measurable, and backtestable using historic data. It can be manually done to some extent by way of visual indicators and horizontal levels on a chart. Of course, coding an auto-trading strategy takes it to a superior extent.

The point of this is to focus 100% on following the rules of a tested profitable strategy instead on any particular trade. The ratio of winning trades to losing trades is irrelevant if the gross profit of all winners outruns the gross loss of all losers during the tested time period.

Edited November 17, 2024 by RJo

[aimhi 10]

On 5/23/2022 at 10:42 PM, fxeconomist said:

How is this possible bro? Do you mean they learn the lessons from their losing trades?

When we execute any trade, we have to pay commissions or spreads that impact our trading by leaving the profits in negative initially.