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Sam@ezeetrader.com

13 Comments

  1. Karl Akinlami-Reply
    July 20, 2016 at 7:01 am

    To me this is the fundamental truth of trading and probably the most important lesson I’ve learned in the last 18 months or so (it took me a while to get it hehe!)… Yesterday my first 2 trades were losers and the old me would have either lost faith and stopped taking the setups or (more likely) relaxed my rules, went in heavy and done some revenge trading.

    But because the losses didn’t effect me emotionally I just took the next setups that came along and ended the day 50 pips up. That doesn’t happen all the time and some days are losers… But my r:R is good and there are plenty of opportunities so I know the next winner (or run of winners) is not too far away.

    • Charlie Burton-Reply
      July 20, 2016 at 7:54 pm

      Yep you’ve got it now Karl…

  2. graham-Reply
    July 20, 2016 at 8:04 am

    Thanks Charlie – In my first 12 months of trading I avoided losses by extending stops a lot of the time – I think it’s human nature to try and preserve the trade (hoping it will come back) – obviously doesn’t work, you only get away with it if you are lucky. Accepting losses was a break through in my trading. And having no trades open through the night makes for a better sleep.

    One of my favourite sayings is “Losers add to losers” and “Winners add to winners”, so true.

    If you manage your position size properly taking losses should be easier to do as you will feel comfortable with the loss. If the amount is too big and doesn’t feel comfortable I’d suggest to reduce position sizes.

    • Charlie Burton-Reply
      July 20, 2016 at 7:54 pm

      Great phrase Graham – I’ll steal it!

  3. James-Reply
    July 20, 2016 at 9:01 am

    Great video Charlie!

    Good R:R definitely helps- I feel much better about taking a few losers, even consecutively, if I know my winners typically average 3-5 times as much.

    It also helps to think about each trade in terms of the method’s overall expectancy. Each trade has positive expectancy so even the short-term losers are winners long-term!

    J

    • Charlie Burton-Reply
      July 20, 2016 at 7:53 pm

      Exactly James….

  4. Richard Seeley-Reply
    July 20, 2016 at 9:18 am

    Such a valid point made. Both Karl and Graham make good points too. I (now) embrace the losses as my risk is always in check so I have nothing to worry about and even the possibility of 2,3,4 or even 5 in a row losing trades I always take the next trade set up which could make the pips + more I’ve lost on the previous losing trades. Where if the emotion of losing got the better of me I may not of taken the set up at all and missed out all together.

    I have a certain mindset to placing the stop too. The obvious is the risk management aspect of not being to rich or heavy along with important price levels/targets. The other is, where is the market going to tell me that I made the incorrect decision with my analysis? This also plays a big part in placing my stop.

    • Charlie Burton-Reply
      July 20, 2016 at 7:53 pm

      good stuff…

  5. Gavin-Reply
    July 20, 2016 at 7:49 pm

    This is a basic trading rule that is being broken.
    as a beginner or even intermediate never change your stops – ever !
    Before you enter the trade you need three things, entry, stop and target.
    World class traders will take 4 or 5 losing trades in a row without skipping a heart beat using only 1% risk
    Executing the planned trade is considered a winner – not the part of whether you made money.

    • Charlie Burton-Reply
      July 20, 2016 at 7:51 pm

      exactly Gavin….

      • Charlie Burton-Reply
        July 20, 2016 at 7:52 pm

        You’d be amazed at how many seasoned traders don’t do it though!

  6. H-Reply
    July 20, 2016 at 10:49 pm

    He obviously went in too big like you said but could he not have draw down a proportion of that trade to reduce his overall risk ?

    • Charlie Burton-Reply
      July 21, 2016 at 3:35 pm

      I guess he didn’t even consider that. His problem is he likes the high risk nature

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