It’s probably going to be a while until I post any actual trading posts, so I thought I would have a look at some of the topics that traders will no doubt come across in their trading journey, and how I’ve personally been able to deal with these. The first one I thought I’d look at is losses – and how I have tried to overcome the perils that come with experiencing a trading loss.

If you’re a trader, losses are going to be part and parcel of the game. That’s a fact. If you can’t deal with losses then trading is not the game for you. You’re never going to win every trade, so you need to get used to experiencing losses. And the earlier you do, the quicker you’ll be on to the winning path. I’ve recently experienced a bit of a losing streak in my trading, as documented via this blog. So how did I cope? Well personally, I thought I had done alright. Certainly a lot better than I would have done in the past. Previously, when I was in a losing position, I played a few risky trades and this has cost me massively. Below I’ve outlined a scenario that I have previously found myself in, and what I did to try and get out of it:

For a particular football match, out of all the pre-match correct score predictions I had selected to trade, the 2-1 scoreline was the only one remaining due to the score at the time being 2-0 (a scoreline that I did not have), and time was running out. Rather than trade out for a small loss, I tried to lower my liability on the 2-0 scoreline. This involved putting significant amounts of money on 2-0 whilst the odds on this scoreline came in, therefore reducing my liability. What happened next, was that the scoreline that I didn’t want to happen, actually happened! So in this given scenario, it was the home team scoring another goal to make it 3-0. So not only did I lose the money I was using to reduce my liability on the 2-0 scoreline, my 2-1 trade was blown out of the water too! By trying to ‘win’ this trade, I lost more than I should have done. What I should have done was just accepted the small loss and lived on to fight another day.

I will say that it was after a similar trade to the one outlined above that I was tempted to give up on trying to make it as a football trader. I was split 50-50 on whether to give it up or not. Luckily I was in a positive mindset and this tipped the balance ever so slightly in the ‘give trading one more go’ camp, and here I am.

So what’s changed? Well firstly I’ve decided to evaluate my trades more honestly, and if I ever feel as though I’m hoping beyond hope that my trades come good, then it’s probably time to trade out. And that’s what I’ve looked at trying to do in my trades documented in this blog. If my trades don’t look likely that they will happen, then I get out and accept the small loss. By doing this, I believe I’m getting into a good behaviour that will serve me well in the future. If, for example, in the scenario given above, the third goal was not scored and the scoreline remained 2-0, this might have taught me that what I was doing was the correct thing to do through positive reinforcement. When the reality was far from this. I have looked back on some of my trades where I have taken the smaller loss, as opposed to experiencing the larger loss, and the time taken to make up the smaller loss was significantly shorter (as you’d imagine). It’s not rocket science that this would be the case, so you do wonder why people don’t just take the smaller loss and try to make it back (and more) another day. But it’s easier said than done. We as humans don’t like to be wrong. We like to be right. And as to not wanting to accept a small loss, I have been there and done that. And in all honesty I’ll probably do it again at some point as I’m still not there yet in terms of having a professional traders mindset, but hopefully the readers of this blog will see signs of me getting there as my posts on this blog continue.

I’ve probably only scratched the surface on the topic of dealing with losses, so I’ll probably explore it in a bit more detail at a later date in my blog. Hopefully I won’t be speaking too much from personal experience, if you catch my drift. This is my first go at posting something about a topic surrounding trading, as opposed to my actual trades. I hope you’ve taken something from this and it has come across as being helpful. I hope to write a few more posts like this, so please stay tuned.

And may the Lord be with you. Always!