Dealing with trading losses

by | Jul 8, 2019 | Market Reviews

Credit: Jaco van den Berg



As most traders know, trading has its ups and downs. Large losses are not only detrimental to your wallet but can have impacts on psychological and mental health.  Learning to deal with trading losses is a crucial component to becoming a successful trader as it can often be the turning point of what makes or breaks a trader.


The first step to dealing with trading losses is to S.T.O.P, (Step back, Take time, Organize your thoughts and Proceed) this is absolutely crucial. Do not feel obligated or pressured to enter risky trades in an attempt to recover and make up for losses. Take some time off to recuperate and analyze your trades, before proceeding and entering the market again. This time may vary from person to person as every individual has their own strengths, weaknesses and trading strategies.


Another key component to dealing with trading losses are what traders commonly refer to as the Four Ms, managing money, managing markets, managing methods, and managing myself.


Money management, in terms of risk management, must be addressed right from the get-go.

Risk can be managed by ensuring that you never trade without a stop loss, and never risk more than a small portion of your account on any one trade.

That way, even if you do make mistakes or have losing trades, you will be able to cut your minimal losses and have a go again the next day. By implementing efficient money management, a trader can build a wealth of experience and knowledge from both successful trades and losses. Over time, improving your performance and results as a trader.


Keeping good records of your trading activity is another key component. This needs to be more than just an excel download from your brokers’ platform. A well maintained and regularly updated trading journal or diary will allow you as a trader to keep track of your trading performance as well as being able to refer back to your own historical data when facing a performance slump in your trading. This will allow you to keep track of how to deal with particular circumstances and also to observe your own trading trends and review when and why your trades were successful or resulted in losses.

“If you show me good records, I’ll show you a good trader.” Dr. Alexander Elder.


Trading is often extremely mentally straining, that’s why self-management must also be evaluated to ensure an efficient and safe means of dealing with a trading loss. This can be dealt with by ensuring sufficient support structures are in place, to aid and encourage you as a trader. Private trading is an individual game and loneliness is often a problem faced by many traders. Having your family or friends to support you can relive some of the stress. Associating with like-minded people, such as other traders may also be useful. Trading socials, such as events and online pages could be a useful tool to relieve some mental strain.

If needed a trading coach or mentor can also be useful in aiding you as the trader to overcome certain issues you may be facing. 


BlackBull Markets offers around the clock client support team, that can easily be contacted via live chat on our website. As well as a wide range of support videos and guides on our YouTube channel, that is an excellent source of trading information and support.


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