Why Trading is NOT Like Your Childhood!
Growing up is very different to trading.
We are brought up to walk and talk quickly – WIN
We are brought up to have the best grades – WIN
We are brought up to buy the best cars and houses – WIN
We are brought up to have the best jobs and make a lot of money – WIN
Everything requires WINNING.
Losing? That wasn’t even an option!
Then we get introduced to trading where we need to LOSE to WIN.
We need to take small losses to make medium profits.
And then it’s all about consistency and persistence.
That’s why adapting to the LOSING mentality with trading is paramount for your trading success.
We need to ACCEPT losing with trading
Yep, you read that right.
The trick isn’t about avoiding losses altogether; it’s about managing them.
Imagine you’re playing a board game, and every time you lose a turn, you get closer to winning the game.
It sounds counterintuitive, doesn’t it?
But that’s the magic of trading. It’s not about avoiding losses; it’s about taking small, calculated hits so you can stay in the game long enough to hit that big, rewarding win.
How do you do this?
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Accept Losses: Understand that not every trade will be a winner.
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Cut Losses Quickly: Have a strategy in place to limit your losses.
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Learn from Your Losses: Each loss is a stepping stone towards a better strategy.
We Aren’t Brought Up to Take Risks
As kids, we were told, “Look before you leap!”
We were encouraged to play it safe, avoid risks, and stay in our comfort zones.
As traders, we need to embrace risk.
But here’s the secret sauce: it’s all about taking calculated risks.
How to Embrace Risk Wisely:
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Know Your Risk Tolerance:
Understand how much risk you’re comfortable with.
Are you happy to risk 0.5% to 2% per trade? GOOD – You’re on the right path.
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Diversify:
Don’t put all your eggs in one basket. You need to adapt to different pre-market movers markets when trading.
Adapt more markets to build different portfolios during different market environments.
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Use Stop-Loss Orders:
These will limit your potential losses. And adjust your stop losses to breakeven or just above – to lock in small gains along the way.
Trading Requires a Whole New Mindset
Trading isn’t like your childhood.
And that’s okay!
It’s not supposed to be.
It’s a whole new ball game with different rules. In trading, the focus isn’t on avoiding losses but taking and integrating them.
It’s not about avoiding risks but managing them.
It’s not about physical effort but intellectual strategy.
FINAL WORDS
Trading is NOT like your childhood.
We are humbled by the markets.
We drop our ego a bit.
And we keep consistent.
We lose battles but win the wars.
That is how it has and will always be.
That’s how we will strive to thrive and triumph with trading.
Love and accept your small losses. They are one step closer to your BIG wins.
Trade well, live free.
Timon Rossolimos
Founder, MATI Trader
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Trade well, live free.
Timon Rossolimos
Founder, MATI Trader
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