Losing Trades Are Part of the Game

Losing any amount of the money, whether big or small is always and will always be part of this game. And it's a fact that every trader must embrace when entering this wild market. It's like your learning fees to formulate a better winning strategy that can produce a high percentage of wins over losing trades (that is if you won't consider this thing as a gamble).

The past week gave me deep realizations about trading. It's been a difficult week for me as I incurred losing trades which I've never experienced before. I would be a faker if I won't admit that it somehow hurts me emotionally as I've seen how my portfolio turned to bloody red from my all previous green picks. And I witnessed how the bear undo my gains in just a couple of days. Now I have much higher respect for Mr. Market and now I know that I should never underestimate the power of the bear.

I always make my trading plan every weekend, but I guess I need to prepare more this time, emotionally and psychologically. This is a mind over emotions game, it's more on how to be logically sound in every trade that we take.

One of the losing trades that I made last week was NIKL. I've mentioned to my friend that "gap down" is never a part of my plan. I was just laughing about it because when I saw the heavy selling of this stock, I immediately sold all my shares without mercy. It's cutting losses without observing first what will be the closing price (well, this happened because of the fear I felt when I witnessed someone I know who made a big cut loss on BLOOM when it gap down).

You can see from that chart that gap down happened on May 20 so I immediately got out during the morning session (when the market is too volatile) at 24.6 only to see that it closed at 26! Now I know the importance of waiting for the closing candle before taking an action. I made an impulsive move with this because of fear of losing more when in fact, I should just have incurred a 1% loss instead of 6%. Oh well, that's life, I just moved on and learned from it. :)

During these difficult times when most of the stocks are going south, making money would never be that easy again, and keeping it would be harder for this game. But for me, those who have trading plans while being persistent, and are humble enough in admitting when a trade has already gone bad and it's time to cut loss will remain strong and winner till the end. :)