5 Ways to Learn from your Failures to Thrive in Trading

Some traders suffer a tremendous loss in Forex trading, which can be devastating mentally, financially, and emotionally. At some point in time, everyone has to deal with these losses the best they can however, the problem is that most individuals have a natural tendency to withdraw themselves from social interaction when feeling down or stressed. As a result, they seem unable to perform at their core best and are troubled by past events.

Remember, for long-term thriving traders, proper money management is essential. Now, that could mean taking small steps, such as setting a pre-planned stop loss to control an excessive amount of future losses. The most challenging thing is to determine how much risk the stop loss should allow. If you place a stop loss that is too far, you could be exposing yourself to undue risk, as well as the possibility of losing a substantial amount of money if the market reverses.

As daunting as losses can be, we need to understand how a trader should react to the loss rather than the loss itself. Losses are part of the game, and inexperienced traders who may have endured a considerable loss earlier may become emotionally hijacked and get stuck into the moment. 

Due to this behavior, one may attempt to trade through their immense feelings by denying the experience of their previous loss and creating more unnecessary turmoil. Some temporarily sweep the loss under the rug to avoid thinking about it, while others may learn from them and try to trade better in the hope of recouping the loss.

Hardly any of the responses mentioned above can guarantee future success however the results could be detrimental if the trader doesn't understand how and when to deal with existing failing trades.

To point out the main difference between great traders and crashed traders, one needs to understand how they handle trading losses and how they perceive their loss as an opportunity to learn from it and become a more skillful trader.

Pay particular attention to these '5' steps successful traders must take after a tremendous loss in order to become more emotionally more controlled and more self-disciplined:

Accept the loss

Losses are inevitable in the trading world. If you invest in stocks or forex, you will certainly lose money at some stage in the future. Losses can be traumatic, so be sure to take this into account. Sometimes losses are less painful and harder to quantify, but they do look real. Learn from it and move on, don't lament. Don't brush it aside, hide it, or condemn yourself. Take action and control of your trading; this is what you need to learn for now and where you want to be. In this field, nobody wants to suffer a loss of any kind, but the best plan of action is to forget your losses, turn them into a learning experience and move forward.

Take a break

Trading confidence and trading discipline are the most critical aspects of trading psychology which make those millionaire mindsets. Sometimes things won't go as well as we would expect and in those scenarios it's better to take a break in order to figure out what and where you went wrong. Trading is primarily a mental concept and based not only on developing better tactics but also building mental toughness. Ask yourself whether you have taken too much risk or if you were emotionally trading due to a previous losing trade.

Plan your ingredients

The fact that most people struggle to trade forex is not due to the complexity of the situation. Most of it boils down to trading because of not having a strategic plan in place. You are setting yourself up for failure if you do not build an approach. If you only prepare for your accomplishments and your trade would become erratic, your judgments would become irrational. Even the most cautious traders fall victim to this factor within a year of trading. Remember, if you fail to plan, you plan to fail. Make a detailed action plan for the things you will do differently for future trades.

Change your perspective

If you really think you lost a trade and as a result are a loser and want to accept, then you can wholeheartedly believe that if you wish. Always remember that you are more than a trade. If one fails, try the other. Don't settle! Now, if your plan still uses improper flawed techniques/lack of preparation, then we're sorry, your success won't come easily or quickly. Your exploration determines what you have learned and what works for your future strategy. Not to mention, it also enables you to examine how to avoid the deadly mistakes that most beginner traders usually make.

Be inspired by the Loss

As previously stated, regardless of how hard you try, you will never be good in future trading if you don’t use your intuition and your plan still uses flawed strategies. Remember, you're not an exception, and you need to use your failure as an opportunity or motivation to learn and perfect your skills. Even though professional traders can get complacent once they discover their flaws, these flaws help them learn and perform well. You need to use your weaknesses as a catalyst to improve your performance, get better-prepared and become mentally stronger for getting back in the game.