“I got a mentor, did my homework, understand the fundamentals, and backtesting my technicals, but why am I still losing money? Is trading just a scam?”
I cried and burst out to my girlfriend years ago when I blew up my account, again. It was not only about the financial loss, but it was frustrated because nothing seems to work and the market certainly did not reward my handworks. I felt unfair, I felt being cheated, and I felt angry, very very angry.
Fast forward, I still lose money every day (like today) and every trade, as I always love to tell beginners, “learn to love your losses because it’s part of the game.” It’s true, no matter how good your winning rate is, you will always have losses. You might have 95% of winning percentage in your backtesting, but that still means you will have 5% of losing trades and you never know when that 5% of losses will appear. Most importantly, you never knew how much trades you will have in your lifetime. 5% of 100,000 trades is still 5000 losing trades. Some people just couldn’t take it.
Yes, that is it. Some people simply cannot deal with the losses or setbacks in life. Trading is all about the execution, and the execution is all about your emotions. Sure, you need to have a good analysis, a good strategy and an approach to your trade, but when you execute the trade and start managing them, that is an emotional game.
Trading psychology is perhaps the most ignored area in all trading courses because it’s tough to teach as trading psychology is just a self-discovering journey for every trader to experience. Everyone loves to talk about the strategies, the winning rates, the forecast, and predictions, but what separates traders from success to failures is the execution. No matter how good your plan is, someone has to pull the trigger.
The sooner you spend the time to work on your trading psychology, the better off you will be in this game. And no, EA will not help you because you will let it run when it makes money, but you will turn it off when it started losing - even though you shouldn’t. However, your emotions get in of your way, and you just couldn’t trust the EA anymore. I know because I’ve been there myself.
Finally, be completely honest about your losses as you would toward you wins. Have a trading journal, and enjoy this journey of becoming a great trader. Take a look at today’s video to learn more.
Enho Kuo is NOT a Broker Dealer and engages in trader education and training. All materials given by Enho Kuo are for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any investment decision you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs. This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by Enho Kuo or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.
Editors’ Picks
EUR/USD remains sub-1.2100 after upbeat US data
US Producer Prices rose by more than anticipated, while unemployment claims shrank by more than anticipated. EUR/USD keeps trading below 1.2100 as investors eye firmer government bond yields.
GBP/USD under pressure below 1.4050 amid renewed USD demand
GBP/USD trades pressured below 1.4050, as the US dollar remains broadly bid amid risk-off sentiment. Rising inflationary pressures and Brexit jitters over NI keep investors on the edge. Bailey's speech, US data in focus.
USD/JPY: Remains confined in a range, above mid-109.00s ahead of US data
USD/JPY extended its sideways consolidative price action through the mid-European session. The set-up favours bullish traders and supports prospects for a move beyond the 110.00 mark.
Editors’ Picks
EUR/USD remains sub-1.2100 after upbeat US data
US Producer Prices rose by more than anticipated, while unemployment claims shrank by more than anticipated. EUR/USD keeps trading below 1.2100 as investors eye firmer government bond yields.
GBP/USD under pressure below 1.4050 amid renewed USD demand
GBP/USD trades pressured below 1.4050, as the US dollar remains broadly bid amid risk-off sentiment. Rising inflationary pressures and Brexit jitters over NI keep investors on the edge. Bailey's speech, US data in focus.
XAU/USD bounces off weekly lows, lacks follow-through buying
Gold consolidates the heaviest losses in six weeks, fades consolidative bounce of late. Market’s struggle for clear direction after US CPI challenged Fed, US stimulus. Wall Street benchmarks dropped over 2.0%, down for third day, but S&P 500 Futures prints 0.10% gains afterward.
Nightmares repeat as BTC flash crashes
The recent Bitcoin price crash seen on Wednesday is comparable to the one in late April. However, unlike the last time, this drop was not due to rumors of new tax proposals.
S&P 500 Nasdaq: PPI confirms the CPI, Fed is in bed as inflation means red
Wednesday's wake-up call to the dovish Fed was repeated with the release of PPI on Thursday. Core CPI was 0.7% versus forecasts for 0.4%. Now is buy the dip still in focus and is don't fight the Fed still the trade?
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