Reader Q & A

It's still helpful and interesting to study your stop-outs. I don't think you've ever discussed what you think about when you get stopped out. Mostly I'm wondering if you just shrug and move on or if you try to analyze why?
No doubt that stop-outs are part of the job... I'm just wondering how much attention you pay to them and if you do pay attention, what are you thinking about.- Bluecollartrader

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A trader has to come to grips with losing trades and being wrong as they are a fact of life in this business. If you don't, your psyche will get crushed along with your account. Then you're finished.

The old boy scout adage of being prepared helps. If you prepare beforehand and figure out at what point the price level will prove the reason why you started the trade wrong and set stops, either mental with the discipline to carry them out instantly or automatic platform based then you will be ahead of the crowd who don't. This will protect your mental state and account. They are both equally important and can't survive without the other.

I never think about how much I might make or what level the trade might go to. Instead I think about at what price I will exit the trade if I have judged probabilities incorrectly or conditions change. I play the momentum and probabilities. Afterward I might think "that was a great $500 loss I took because now it's down $2000 , lookatallthosepoorfuckers tryingtogetoutnow, and I congratulate myself for sticking to my plan and not tying up my money and my focus by averaging down.

Getting stopped out is something I prepare for. When I do my visualizations I include setting stops and seeing these get hit. That way, these trades that "don't work" become just another trade lumped in with all the rest. After all this is a just numbers game. You win some , you lose some. Or you could say some work out, some don't. That is the end of the story. I never analyze what went wrong because I don't presuppose that I "knew" what was going to happen in the first place. To do so would put a trader in a bad situation where they think they can predict the market. You can't, I can't. Nobody can so I don't try. The thing is when you think you know and trade that way and take a bunch of loses, it affects you deeply. It gets personal. You become a loser. You don't know the correct thing to do. You question yourself. Every trade goes opposite of the way you are positioned. In this situation the smart traders STOP TRADING while they regroup and find a way out. The dumb traders continue until their accounts and self esteem is at zero.

There are so many interconnected areas between your mind, your system and the market that to be a successful trader, it requires you to be a very intuitive yet reflective person. Being honest with yourself as far as your emotional capabilities go and keeping within those parameters yet always seeking to push your limits is a tough job if you have never experienced how to do it. This requires practice. Constantly monitoring your emotional state is something you have to do throughout the trading day. Sticking with your proven trading plan and never deviating from it brings a trader right to successes doorstep. When you don't put yourself in situations you can't handle, you never have to deal all the BS that is counterproductive to your success. Then you are only thinking about the dogged application of your system and being ready for anything to come your way.