Strategy Video: Expect Losing Trades and Learn from Them
• There is no 'Holy Grail' in trading, all traders and strategies eventually face a loss
• How we deal with a trading loss is critical to our progress towards becoming a better trader
• We should evaluate all trades honestly - did I follow my rules or didn't I?
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On a long enough timeline, losing trades are inevitable. How a trader responds to those losses is often what dictates their long-term success in the market. For those that expect to discover the 'Holy Grail' (a fictional strategy that is profitable through all market environments over time), losing trades can be crippling and spark emotional response in the form of revenge trading or apprehension for future trades. The market participant that knows losses are inevitable as well as good opportunities for evaluation can learn, evolve and improve over time. An honest evaluation of each trade - loss or winner - is the first step. And, living by a credo of 'progress, not perfection' can make developing a successful trading strategy achievable. We discuss setting realistic expectations and making progress in this weekend Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.