Learning to deal with the losing trades in the stock market

The novice traders don’t realize the fact, losing trades are inevitable in the trading profession. After losing a trade, they become aggressive with their actions. Some of the traders often increase their leverage factor and expect to make a big recovery. But by doing so, they impose a great threat to their trading career. If you wish to become a profitable trader, you must learn to deal with the losing trades in a structured way. Without learning the proper way to deal with the losing trades, no one can become a profitable trader in the retail trading industry.

Dealing with the losing trades is not that tough. If you maintain some key steps, you should be able to manage your risk profile even after having frequent losing trades. So, let’s get into the details.

Aim for high risk to reward ratio

You should not be trading the market with a negative risk to reward ratio. If you take the trades with a negative risk to reward ratio, chances are very high that you will be making silly mistakes. On the contrary, if you take the trades’ high risk to reward ratio, a single winner can cover up a big loss. But to find the high risk to reward ratio trade signals, you should be doing the data analysis in the daily time frame. Unless you trade in a higher time frame, you will never find reliable trade signals in the market.

Identify the major trend

Taking the trades with the major trend is very critical to your success. Read more here and you will never break the rules in the trading profession. Being a currency trader, you must realize the fact that you should be sticking to the major trend from the start. Once you learn to identify the major trend with a high level of precision, you will be making some silly mistakes in the trading profession. The novice traders often think they know a lot about the market. But after trading the market for few months, they keep on taking their trades against the existing trend. Eventually, they lose a significant portion of their trading capital.

Trade with price action confirmation

You must improve your trade execution skills to deal with the losing trades. The professional traders always suggest the rookie traders trade with price action confirmation signals. By learning about the Japanese candlestick pattern, you will find simple trade signals. But do not think that simple trading methods are weak. In reality, simple trading techniques provide the best solution when it comes to quality trade analysis. But knowing about the reliable candlestick pattern is not that easy. You must learn things in the demo trading account and only then you can expect to find the best trade setups in the market.

Trade with discipline

You must maintain proper discipline during your trade execution process. If you break the rules and try to earn more money by taking aggressive steps, you are going to blow up the trading account within a short time. Write the rules on a piece of paper so that you can maintain them properly. At times, you might have an emotional imbalance and thus you will have the urge to break the rules. But if you do so, you will never learn to deal with the losing trades. No matter what, the rules should be followed very strictly in the trading profession. Only then you can expect consistent profit in the stock trading business.

Consider it as your business cost

The professional trader considers the losing trades as their business cost. They never lose hope just because they have lost few trades in a row. They wait for the next potential opportunity. So, if you truly believe trading is the right profession for your business, you must learn to accept the losing trades as your business cost. Once you have that mind-set, the stock trading profession is going to be very easier.

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