What to Do When You Mess Up a Trade?
We’ve all done it. That perfect trade with the perfect setup that just didn’t work out. It can be incredibly painful, particularly if you ended up with a big loss. The temptation to stay invested in positions that you believe in even when the evidence is against you is an enormous. However, if you treat trading losses as a learning opportunity, then you’ll become a better trader in future.
Take a step back
Ignore your charts for a minute. Ask yourself if you really made a mistake. If not, then you have been a victim of unavoidable market circumstances. There’s nothing wrong with this – as long as you followed your trading plan, then you’re not to blame. Remember that not all trades work out, and that trading is purely a percentage game where trading losses occur.
On the other hand, if you moved away from your trading plan – for instance, you made an impulse trade or disregarded your own trading rules, then it’s time to step away from your computer and ask yourself why you did this. You don’t need to take a big break – five minutes of introspection works wonders. The important thing is to know what you did wrong and not repeat it again.
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