A Trader's (winning) Attitude
“Losing trades do not a Loser make”.
Most novice traders and traders that give up on the market in frustration, have one very important (among other things) trait. They believe that each trade should be a winner. They want every trade to increase their portfolio. They do not subscribe to the idea that they can make a wrong judgment about the stock or the market. They cannot accept a ‘losing trade’. Personally I think they attribute a losing trade to ‘being a loser’.
As every successful trader has realized, there is no escape from losing trades. They are a given if you are in the trading business. Compare it to an actual business. Would one start a business without planning for losses? That would be a big folly. The business will have little chance of success should things start turning sour. So too in trading, losses are inevitable. In fact, there could be more losing trades than winning trades. The key is to keep the losses very small and let the profits be huge. That is the only practical way to succeed in the market.
The market will humble the trader every step of the way. The trader cannot change the market, but he/she can adapt to it. Change your colors as the market does and you will be successful. If you hold on to your judgments, while the market signals you otherwise, it is you who will pay the price with a larger loss.
It is always best to get out of a position if the market hints at that. You can always get back in. But if you don’t get out at the right time and cut your losses, you might have a hard time recovering. Not only will you lose your trading or investing capital, you will also be suffering a blow to your trading confidence.
Profitable candlestick charting recommends stop loss procedures for all the trades one gets into. Setting the stop loss levels is made very easy with candlestick charting. We will go in-depth into this topic soon.