Why Big Losses are a Day Traders Best Friend
It’s March 8th, 2017 and I just had my worst day of 2017. Actually it was my worst day ever from a winning percentage standpoint. I didn’t have one green trade. NOT ONE! Nothing worked, but that didn’t stop me. I kept trying until I hit my max daily loss times 3.
So why is this a good thing?
Because every trader has days like this. EVERY TRADER. If you haven’t had a day like this, YOU WILL! The pain from these days is awful. It’s so awful that we can now use it going forward as a proverbial hot stove. We’ve all touched a hot stove, ONCE. The next time we are not sure if a burner is hot, we draw upon that past pain to stop us from touching it again.
Sadly, traders forget faster than most people. We need to get burned every so often as our reminder that trading is really, really hard. Today is March 8th, 2017 and I got burned pretty bad.
I can now move forward with the pain fresh in my mind to keep me in check, hopefully for the rest of the year. If I feel myself even considering blowing off my daily loss limit, today’s pain will immediately pop in my head and guide me to do the right thing. That’s why today was a great day! We all need pain to draw upon so we don’t repeat mistakes. This pain is our friend!
Also, perspective matters. On a positive note, I’m still up almost 100% for the year so far, and we are still in the 1st quarter. That’s vastly better than where I was this time last year. My current balance is my new baseline and tomorrow is my first trading day of the year as far as I’m concerned. My previous balance from yesterday means nothing! In the past I would have felt like I have to get back to that balance tomorrow. I’ll get there when I get there. Maybe next week, maybe not.
One thing is certain. Tomorrow and beyond I will only trade A+ set ups. I will only enter at inflection points. I’ll think ‘defense first’ in every trade. I’ll pay myself quickly on partials when my trades work and move my stop to breakeven on the rest after that. I’ll honor my daily loss limit. I will do all of these things and I know that for a fact. Why? I’ve got today’s pain to draw upon.
It’s my new best friend.
CLICK HERE to get involved with our trading room for an ‘almost free’ trial!