Turn Your Losses Around
{Among the} things I find myself repeating endlessly is {a thing that} you all {have to} hear {again and again} {to help keep} you going, {specifically for} my upcoming trading challenge students. EVERY trader…even the greatest…experiences loss and it’s SO {vital that you} {study from} your losses! {In the event that you} haven’t lost, you haven’t learned. The hardest {section of} trading is {understanding how to} deal and {deal with} the losses, learning {from their website}, and turning those lessons {in to the} foundation {that will help|which will help} you achieve major wins.
Download a PDF version {of the} post as PDF.
I’ve called my program for my most dedicated students The Millionaire Trading Challenge because it’s {a classic} ‘challenge.’ And {challenging} is…well, challenging. This isn’t a walk in the park, 90% of traders lose so it’s my job {to greatly help} people turn their losses around…and if you’re still having {trouble} {coping with} the losses {that may|which will} eventually {cause you to} the trader {you intend to} be, then maybe the story {of 1} of my newer students, John Papa will restore {one to} your senses and keep you from throwing in the towel prematurely.
You {figure out how to} lose and manage your losses, you’re not failing. {You merely} fail {in the event that you} can’t accept losses and cut and run when it doesn’t all click {immediately}.
Remember, I only win roughly 70% {of that time period}, {but nonetheless}, I’ve turned thousands into millions, {a spot} I {make an effort to} hit home to my students on a weekly basis {in my own} live trading webinars here.**
John recently wrote {to speak about} his struggles during his first {half a year} of trading. {Throughout that} time, he kept thinking “I’ve finally got this,” {but} {he’d} get hit with {a large} loss {watching} his account plummet:
“I lost {a little} under $16k after 6 {. 5} months of trading and was left with just $8000 {in my own} account. Then it finally all clicked together. I’m on a tear {within the last} 5 weeks. {I’ve} had only 3 losing trading days since November 15 th (27 total trading days, 24 green), with the worst total loss for {each day} being $272. {Altogether}, I’ve made back $11,179 since November 15 th . That’s 140% account growth from my low point and $4,472 {from} being breakeven overall. Today was actually my best day ever, with $3,020 profit between two trades. I narrowed down my focus to strictly playing multi-day breakouts {in fact it is} working so well. My stats over {this time around} period are {wherever} {I’d like} them to be, with a 71% win percentage and {the average} gain of 11%.” (Sykes note: by {enough time} I even {surely got to} publishing this guest {post}, John has made another $10,000+ {and contains} now profited $6,000+ overall as his hot streak continues, {as you can plainly see} here)**
{Given that} things have finally clicked for John, he was {ready to} share the 6 key things he’s learned in the ‘struggle’:
Direct from the keyboard of John, {focus on} his persistence and willingness {to help keep} moving forward {regardless of the} losses:
#1 {Figure out how to} accept failure
{This is} {a difficult} concept {for me personally} but became {essential} to my turnaround. {Initially}, I always {wished to} be right and {that could} often lead me to the hold and hope “strategy” {whenever a} play would {not in favor of} me, just {therefore i} wouldn’t {need to} {have a} loss. Or {I’d} {stay static in} a trade {to avoid} “wasting” {each day} trade on a losing trade. {Both these} behaviors turned potential small losses into {a great deal larger} losses. I had {to improve} my mindset {to understand} that {I possibly could} have {an excellent} losing trade, {so long as|provided that} I followed my plan {and much more} importantly, learned from any mistakes I made.
#2 Manage your risk
‘Cut losses quickly’ is rule {number 1} for {grounds}. {I usually} struggled with how exactly {to get this done}. {Initially}, I used set percentages as my maximum loss, {despite the fact that} I hardly followed through with cutting a loss when it hit my mental stop level. I eventually switched to risking {from} specific levels in the charts, {but nonetheless} didn’t {understand how to|learn how to} correctly choose those levels, often risking {from} midday consolidation levels. Well, when those levels fail {it is almost always} {associated with} quick, massive drawdowns. So {even though} I knew where {I needed} to cut my loss, I often couldn’t {escape} until {lower}, {resulting in} bigger losses than I anticipated.
Then something Roland said at the Traders and Investors Summit in Orlando changed everything {for me personally}. He {discussed} {just how much} he loved Trading Tickers but was mainly going long, so he turned the short plays in Trading Tickers {ugly}. This was {the truth} as Tim Grittani mostly risks his short positions {from the} {most of} day {as well as} {the prior} day’s highs, {they are} key technical levels. Now, when I go long {I’m} usually risking {from the} low of {your day} or {when there is} {a large} morning spike, risking {from the} low point {following the} pullback from the spike. Since {achieving this} I haven’t had a trade where {I’ve} lost {a lot more than} I was {ready to} risk when initially entering the trade. {The particular level} you risk {from} {changes} with {the sort of} setup {you’re} playing, just {be sure you} {work with a} key technical level.
#3 Track every play
{I have already been} doing this {right away} but wasn’t tracking everything I {would have to be} tracking {to create} myself up for success. {The fundamental} part I was missing was tracking the setup {for each and every|for each} trade and what time I entered the trade. Once I started tracking my setups, this allowed me to {breakdown} my stats {for each and every|for each} {kind of} play {and discover} where I excelled and where I was struggling. I thought {I’d} find my edge with morning panic dip buys, {and although} I was winning {a lot more than} 70% {of that time period}, my average loss was four times {larger than} my average win. {That’s not} a recipe for success. I also {pointed out that} I had {lots of|plenty of} trades where my notes in the setup column of my spreadsheet said {something similar to} “stupid chase of a morning spike.” Actually writing this down helped me eliminate plays {such as this} where I didn’t {have even} {an idea}, and {concentrate on} finding setups {which were} working best {for me personally}.
#4 Find your edge
{These suggestions} is largely {extracted from} Tim Grittani’s journey to {learning to be a} consistently profitable trader. He often {discusses} how he turned things around by {concentrating on} two specific setups. {The specific} setups aren’t important, {the main point is} {he} found his edge {and} cut out {the rest} and {centered on} {that which was} working best. {This is exactly what} {I did so} and the turnaround on my {important thing} was incredible. It took me six weeks {to create} back the $16,000 I had lost over my first {half a year} trading. Before {achieving this}, I was at {the stage where|the main point where} I could {develop a} watchlist that essentially mirrored Tim’s watchlist, maybe differing by {a couple of} tickers. But I didn’t have {a particular} {arrange for} each stock, I had {similar to} five possible plans. {I’d} think, “if it {includes a} morning panic {I could} dip buy,” or “if it {includes a} morning spike {I could} try to {enter} on a pullback.” Now my watch lists {have become} {not the same as} Tim’s and {I’ve} one exact play {I’m} {searching for} on each stock on my list. {Also to} be clear, {because} {I’m} finding success with the setups I play, that doesn’t mean {you have to|you should} play {exactly the same} setups as me. {Most of us} have different strengths and weaknesses with varying {levels of} risk {we are able to} tolerate. {For this reason|That is why} tracking your stats {is indeed} important, {so that you can} find {exactly what will} work best {for you personally}.**
#5 {Show patience}
This follows directly from my previous point. {I’ve} narrowed my focus {right down to} solely playing breakouts. Now I {need to be} patient {looking forward to} {the proper} setups. At one {time}, I had five open brokerage accounts that I was actively trading with. {I did so} this {to obtain} {round the} PDT rule, yet my worst results came {immediately after} I opened {all of the} accounts. Now {I could} go multiple days where {you can find} no plays {for me personally} and {I’m} okay with that. {Since when} {there’s a} play, {I could} {make best use of} it and really make decent profits if the trade goes as planned.
#6 Never stop learning
{Understand that} trading {is really a} marathon, {not just a} sprint. I’ve been {enthusiastic about} trading and learning {how exactly to} {do that} successfully from day one. {I possibly could} {took} it easy once I was fairly sure I was consistently profitable. But no, {this is the} exact thing I didn’t {wish to accomplish}. {I understand} that {I’m} finally {on the right course} and now {I’m} {prepared to} take {what to} {another} level, {therefore i} am pushing myself even harder studying video lessons and webinars and re-watching DVDs. {If you’re} not finding success in month 1, or 3, or 6, or 12 just {stay with it}. Don’t trade {too large} {so that you can} {stay static in} {the overall game}, and {remember} {that you will be|you are} learning {a fresh} profession {so it’s} going to {have a} {boat load} of time, {effort} and dedication.
I’m SO {pleased with} my student John for his turnaround and please do congratulate him in the comments below! {And in addition}, let his profit chart {motivate you} to never {give up} your education {because the} key {would be to} keep going {and when} you stay true to your mission and respect this art as a marathon {rather than} a sprint, {you may be|you will end up|you can be} rewarded:**
