When you’ve been trading for a while, you’ll realize that losing trades are inevitable. It’s hard to be right all the time. And even when you know that you don’t have to be right all the time to make money, how do you deal with the losing trades?

When you put on a trade, you naturally expect to be “right” and expect to win on the trade. Even though you know that mathematically, over the series of trades you should end up profitable, each time you put a trade on a little bit of ego can be invested.

One way that I know how to handle this is to trade so small, it doesn’t really matter whether you win or lose. The best place to be in as a trader is when you don’t need the money from your trading.

But when you’re “trading for a living”, you do need to make profits over a period of time. While this isn’t an article about managing your overall finances, that’s something that you’d seriously want to consider before becoming a “full-time” trader.

Dealing With Trading Losses

The question still remains. Before you reach the “Zen” zone of being detached from your trading results, how do you handle your emotions?

Do you:

• Let your anger and frustration out?
• Pretend you aren’t bothered?
• Ignore your losses and trade with a vengeance?

While most traders can fall into any of those responses, one of the better ways to handle the emotion that comes with trading losses is to admit to yourself that there was simply nothing you could have done about it. Accept the loss, admit that all traders (yes, even yourself) are vulnerable to losing trades.

If you had done all you could have, managed your trade according to your plan, understood the possible outcomes and accepted that any one of those outcomes could have happened, then admitting to yourself that you couldn’t have done any better could help you tremendously in getting over your trading loss.

If you expressed your anger by slamming the table, taking vengeance trades, and getting frustrated with yourself and allow yourself to get into an anger mode, you might just get stuck in a cycle of anger and clouded judgment.

Instead, you could release your anger and frustrations by distracting yourself through sports, working out or just doing something different. Use that energy for something constructive instead, and when all that angry emotional energy has been released from your system, you might just feel a lot better.

Just learn from your trade, see how you can improve your trading, and adjust your trading plan if necessary. Otherwise, just chalk it up as one of those inevitable losing trades that come along sooner or later.

You might just feel better.