PHOTOSHOP SAMPLE

PHOTOSHOP WALLPAPER

Trading Psychology – Taking a loss

As strange as it may sound, one of the key ingredients in becoming a professional trader is learning how to lose money. As with so much in trading, taking losses does not come naturally to the human psyche, and so mastering it requires both teaching and experience. Students of our Trading Floor Training programme develop the necessary discipline early on, and quickly come to realise its importance; after all, wouldn’t you rather exit a losing trade on your own terms and not the market’s?

Every time we enter a trade we should be clear in advance about what we expect to get out of it, and about what we will do when confronted with a range of possible scenarios. It is fine to run the position, but there should always be an area where we are looking to take profits on at least some of it. Given this, we should also be clear about where we will exit the trade if our original reasons for entry are not confirmed. Any trader who is not absolutely clear about these two things before taking a position is trading blind, and ultimately the law of averages will catch up with him or her.

As discretionary traders, we often trade at high frequency and in extremely volatile markets. Being able to take a loss professionally and without emotion is key to being profitable in such markets. As with so many areas of the Trading Floor Training programme, mental discipline and self confidence are essential. The first thing we must come to understand is that losses are an essential part of trading- no one ever has been able to, or ever will be able to, predict with 100% accuracy where the market is about to go. We think and trade in probabilities, which necessitates an understanding that anything can happen. It is no reflection on the trader whether a trade is ‘right’ or ‘wrong’, and as the professional trader has the confidence to know that his edge will mean he reads the market correctly more often than not, he has no hang-ups about a trade that loses money. There is after all no place for an ego when half the battle comes from within the trader.

Perfecting careful and disciplined risk management keeps us in the game when we’re ‘wrong’, and enables us to take maximum profits when we’re ‘right’. A lucrative career as a Futex professional trader awaits readers who can rise to the challenge.

Futex Investment & Trading Academy

“The Ultimate Futures Trading Education”