Emini Trading: Use Your Bad Trades
Traders aren't always the best at accepting the fact that they were wrong
. In fact, it is one of the biggest problems with unsuccessful traders in the e-mini markets. Being wrong isn't a problem unless you let it be. A trader has to maintain rational thinking in order to get the best results and if you let your emotions run unchecked more often than not one bad trade can spiral into a series of major drawdowns.
Losses are part of the game and good traders know that ahead of time. No system is fool proof and thinking that you are a bad trader just because a trade doesn't go your way is a quick way to drain your account. Anger, fear, depression, a feeling of helplessness can lead to a trader making very poor decisions which will undoubtedly lead to more and more losses. Instead, use your losing trades to help you and motivate you to success by following a few simple strategies.
What are some tips that can increase your trading confidence in your own systems ability to cover for natural losses in the market?
1. Have A Plan
It may seem obvious but the only way you can have confidence in a plan is to have the actual plan itself. Sit down and right out your trading strategy and plan for making money in the markets before you place another trade. You should know exactly what trades you are going to take and which signals you are going to ignore. Having a well calculated plan is one of the keys to a trader's success.
2. Turn Your Losses Around
Losses don't have to be 100% negative. Goo traders use their losses to expand their trading knowledge and refocus their trading strategies. Go over your losses and analyse what happened. Did you fail or did your plan fail? Did you follow your rules or did you stray from them? Analysing your losses will allow you to see how your trading is progressing and keep you from getting complacent with your results.
3. Motivation
Even a good trader gets upset when they place a trade that doesn't work out the way they thought it would. It is only natural to feel upset about losing money. Good traders differ from bad traders by using the heightened sense of emotion that comes along with fear and disappointment and anger to refocus themselves on finding good trades and getting their money back. Bad traders will give into the anger and believe the market owes them something. They will blame the market and not themselves. This will only lead to over trading or revenge trading which will in turn result in further drawdowns. Use your losses to motivate you to come back stronger.
Trading isn't an easy professional and trader psychology is one of the most overlooked aspects of any traders skills set. You need to have control over your emotions and your mental stability if you are going to make rational decisions while participating in an irrational world such as the futures markets. Make every effort to prepare yourself for success and sooner or later, if you work hard enough, the good trades will come.
by: Pamela Carpenter
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