Most of us plan to implement the same from the next trade.
Why It's Hard To Run Profits And Limit Your Losses-
A thread-
Most of us plan to implement the same from the next trade.
When we take the trade, If the trade goes in profit we panic more then we would have panicked if the trade would have gone wrong.
Strange right, why would someone panic if the trade is going in profit.
Let’s name this little experienced trader Rahul.
He is ready to “ FOLLOW THE PLAN” of holding the profit and exit if trade goes wrong.
Now, Reliance goes to 2010, Rahul is happy, panicked, Feared.
Well, he is getting these feelings because he can't believe that his trade is going in the right direction after a lot of wrong trades.
What if like all the previous trades this trade also goes into loss, this feeling is going to make some trouble for Rahul now.
After thinking all this, Rahul exited the trade at 2010.
This was not only Rahul, but we all went through the same emotions.
So, let's come to the main point now,
HOW TO HOLD THE WINNERS and win over these emotions ??
First we should know why we get these emotions.
1. CONFIDENCE-
Most of the unsuccessful Traders have this quality in common they are under-confident.
Note, that Confidence doesn't mean that one starts to bet too much on a single trade or anything like that.
SO, HOW TO BE CONFIDENT-
You may think that we can build confidence by gaining more knowledge, but I can tell from my experience that more knowledge does not help in this case.
Because it shows you, whether you have any edge or not.
So, how to take trades when you are under-confident?
FIRST, thing you can do is reduce your Risk size to ¼ levels of what you are risking now.
Second, You really have to trust yourself, and take a leap of faith if the first step is not working for you.
Sometimes, What we fear is just an illusion.
We should all learn to embrace risk rather than fear it. It is one of our greatest learning tools
We often hear, “Scared money never wins”
We all love our money, And we don't want to lose it.
But, in Markets we have to give something in order to get something in return.
Scared money is the money that you may need for your Bills, Rent, food, etc.
Though, There are exceptions everywhere.
So, If you could , Just use the money which you don't need for your immediate needs.
I don't know anyone till now who doesn't mind losing money.
I say that don’t use money which you may need in near time, just because it will make you more emotional.
We all love winning 100% of the time.
But Markets are different here; one can make fortune Even by only being Right 30-40% of the time.
Though most people can't digest this, 2-3 LOSERS in row, and their confidence comes crashing down.
Though we all know that one trade is not connected to another trade, and its outcome is purely Random.
So, Focus on the outcome of large number of trades and not a single trade.
