For many of us, acceptance is a hard thing to swallow. Especially when things go against us. Yet when it comes to trading, accepting the outcomes of all your trades, not just the good ones, is going to be key to your longevity.
There will always be situations out of our control that are going to see us giving back some profits. Or taking a loss. Yet just as we are happy to give ourselves a pat on the back for our wins, we also need to accept responsibility for our losses. After all it was us that pulled the trigger.
Here are a few tips and reality checks towards accepting everything that we do in our trading. Whether the outcomes end up being in our favour or not.
1. Failure can follow success / Success can follow failure
It’s easy to get over confident when you have a few winning trades in a row. It’s also easy to get down on yourself following a few losses. Yet this is the name of the game. Accept that there are ups and down in this business. So long as you have a solid methodology, don’t allow your psychology to second guess it.
2. Understand that there are risks in every trade
Everything in life is a risk. You can wrap yourself in cotton wool and never go outside the house to lower your risk of failure. Yet that is not what life is about. After you have taken a trade, if you are constantly looking at your phone and swearing at it when your trade goes against you, then you have not accepted the consequences of risk. When you do accept these consequences, sure you might swear about your loss. Yet you’ll get over it quickly and move onto the next trade.
3. Markets WILL move against you
Even your best trades will spend time back filling before moving forward again. It is the nature of the market. Accept the process and don’t panic yourself out of perfectly executed trades.
4. No one knows what the markets are going to do at any given moment
We say this a lot, yet as soon as we accept this fact as traders, life suddenly becomes a whole lot easier. Add this one to your affirmations and a weight will be lifted off your shoulders. Ego is about thinking that you know. Trading is about processes. And the discipline to follow those processes no matter what so called experts are yelling at you.
5. You are going to be wrong – A LOT
Accepting that trading is different to nearly every other profession is important. For one, you don’t have to be right most of the time to keep your job. Some of the most profitable and successful traders only win half the time.