In the world of trading we deal with all sorts of emotions. When we are making money we get excited, happy and and somewhat giddy. It feels so good to make money while you just watch the stock you bought increase in price. Early in my career I would say it was one of the best feelings in the world. After all, when a stock that you have a position in climbs it makes you look smart, informed, intelligent and on top of the world in some cases. Everyone has an ego, and a winning position feeds that ego like nothing else.
Unfortunately, there are two sides of the coin. When we enter a trade position and we are losing money it can feel like the sky is falling. It does not take much to get negative in this business. I recall being in a losing trade and as it went against me I was wishing I had never been in the business. I remember talking so negatively to myself that it is amazing that I’m still around today. When you think about it, we are already living in a negative world. Just think about how many people gravitate toward negative things as well as negative talk. From what I have discovered over the years, being negative brings more negativity.
These days it is much different for me. I have accepted that I will have some losing trades along the way. This is just part of doing business. I have a friend that owns a restaurant and sometimes he orders too much veal or chicken, then he puts it on sale at a discount to try and salvage the bad investment that he made in the unsold protein. It happens, we are all going to make bad trades from time to time and it happens in every business. Now when I trade I expect to win on a majority of the positions. Every trade I enter comes with risk and sometimes there will be trades that go against me. The secret to this is to simply know where the trade has gone wrong and to get out, we call this a stop out. Once you start to do this it makes trading a little easier. Think of the stop out like an insurance policy. Once I witnessed a day trader friend of mine lose a $200,000 account in one day. It was the most painful thing I ever watched. Thank God it wasn’t my account, but that is what can happen to someone when they cannot stop out of a bad trade. Unfortunately, this old friend of mine left the business and never returned.
Here are some tips to stay positive in life as well as in trading. Read positive and inspiring books. One of my favorites books is Think and Grow Rich by Napoleon Hill. This book is a classic and a must read for anyone in business, especially the trading business. Next, do not watch the evening news. The evening news is one of the most negative things we can put in our minds. Just think about it, the first three stories are usually about murder, crime or a tragic accident. In my opinion, the news is just pure poison. You also may want to incorporate exercise into your daily routine. This is very important to stay positive. Walking, weight training, yoga or playing a sport will all do the trick to relieve stress and help you feel better. Diet is important too, eat lots of fruits and vegetables to feel better. We all know that fruits and vegetables are good for us. This is indisputable, you are what you eat. Make sure you keep good company. There is an old saying, you are who your friends are. If you have friends that are negative you are likely to be negative too. Again, positivity breeds positivity. Negativity breeds negativity. We are all like magnets and it is so important to be around people that are supportive, encouraging and hard working.
Now remember, nobody wins on every trade, it is impossible to do. Losing on a trade from time to time is a natural part of life. Just accept it when you are wrong and move on. The legendary trader, Jesse Livermore, used to say that once he stopped out of a bad trade he would sleep like a baby knowing that he did the correct thing. It would actually help clear his mind to find better trades the next day. Life is simply better when you are positive. If you are struggling in trading try some of the things mentioned here and I’m sure you will benefit before you know it.
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