Losing Money Like a Pro

Hello traders and Anyone new to the site, today I’m going to cover some psychology on taking losing trades and how I deal with them. I hope you can take some ideas away from today’s post and incorporate them into your trading and investment strategies.

A common trend, in trading is when things are going well, trading feels easy and effortless. Sticking to your trading rules comes easily because it has worked out well for you a few times in a row, you’ve long forgotten the pain of your last loss and feel confident of delivering a win every time you enter a trade. For me this is indeed very true and its easy to get lost in the euphoria (albeit short lived) of feeling like you’re a real winner and nothing could go wrong.

‘But that entry was perfect’ you tell yourself as the inevitable loss finally comes in and you feel the gut wrenching pain of your perfect streak screech to a halt. This right here is, in my opinion, the moment where you either become a professional trader or you fail. Taking a financial loss is incredibly painful and even if you are the most stoic of individuals, it will impact your next decision in the market.

Revenge trading and rule breaking are the next threats ahead, “I’ll just reverse my position and double my stake” you decide, knowing full well that wasn’t part of your trading plan at all (the exact plan that gave you a lovely streak before this all happened). It swings back against you and now you’re looking at a much bigger down day than any of your up days. You spiral into emotional trading and the longer it continues, the more danger your account is in..

Let’s learn to lose money properly my number one piece of advice to anyone who struggles with taking a loss, its counter intuitive I know, but just stop trading for the day. When you see the loss hit your account just shut everything down and walk away. I can already hear a lot of you shouting “Well that’s stupid, I could just keep trading and make that money back and even get positive on the day”. I know its possible, I’ve done it, but looking over my trading diary I also know that It is the most likely moment for me to make a stupid mistake or bend my rules leading to further pain and losses.

Take time to process the pain, analyse if you could have done anything better, then come to the market fresh when you’re ready to once again execute your trading plan just as you have been doing up until this point.

Sleep on it, for anyone that’s interested in reading up about how sleep impacts our brains, make sure you check out “Why we sleep” by Mathew Walker. There is actually evidence in there to show that sleep literally does act as a form of therapy for painful situations so I truly believe you can overcome some of the emotional impact of a loss or string of losses by coming back the next day.

Diversify your happiness, I may well do a more in depth post on this one day, but what I mean is, where possible do not make winning at trading your main driver of happiness. It feels great to win, don’t get me wrong but I would strongly advise you to have other goals that you are working on day to day that you can also feel good about achieving. I remember once I took 2 weeks out of my training schedule and cancelled my other freelance work to “really focus fully on trading” what do you think happened? I took an early loss in the week which hit me harder than usual and then had the worst 2 weeks of trading in about 2 years. Why? Because I put all of my emotional eggs in one basket, the only sense of achievement I had day to day was winning money from trading.

Today I took a loss, as you’ll see below shortly. As it stopped me out I shut down the charts and got straight on with my gym routine and hit my targets there, I also went to train at my sport (Brazilian Jiu Jitsu), I came back stretched and meditated and now I am writing this blog. So yes today I took a loss, but I also won by ticking off other goals I had set myself for the day. These could come in many forms, another business perhaps or just anything that means you can say today you are a little bit better than you were yesterday (even if you are also now poorer 🙂 )


FTSE Long 9th Sept

This Long position was taken due to quite a few confluences all lining up for the entry. First it lined up with really key daily structure and I had the zone tagged as high probability for the bulls to step back in. The market was crashing down following a strong trend line which was recently broken, meaning the tide could well have been turning. Lastly the market formed a double bottom which is easily my favourite pattern and the signal candle I took closed through the EMA8.

All of these things added together told me that there was a good chance for a bullish surge, I wasn’t really paying attention to the central pivot (pink line) of the double bottom for management. I was really targeting at the very least a retest of the low price above (Red line)

Screenshot 2019-09-09 at 16.50.30

Thanks everyone, for reading this weeks post. I am very much just going with the flow on how and what I post. I think some thoughts on trading and my trade for Monday will be the format for the time being, but I’d love to hear from you at darrenboness@hotmail.com or you can connect with me on instagram “darrenboness” or just leave a comment below, I read every comment and aim to answer them all as best I can. I had some people asking me to explain things such as confluences and zoning so I will make sure I go over these in detail at some stage.

All the very best


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Showing 8 comments
  • R.R.

    Trading involves making speculation, a negative behavior to be avoided in the moral context.


    • James Orr

      Hi. Thank you for your comment. And Darren, thank you for another great post.

      It is an interesting link for a couple of different reasons really:

      It differentiatiates between short term trading and long term trading (which in your article seems to be over 1 year). This would seem prudent, since the Vatican are massively invested in the stock market. As such, long term gambling must be better than short term gambling, morally (I am not sure how gambling becomes morally acceptable after 365 days, but there you go!)

      What is interesting with that, is that the enormous market crashes that have resulted in depressions and recessions, indebting entire nations and causing widespread misery, have always come due to the actions of the morally right, long term traders – the banks and the funds.

      Aside from that, I believe that long term investors have been unfairly tarnished with hoarding money to the detriment of the poor. Enriching share-holders over employees, even. The Vatican must have a workaround for that, thank goodness!

      It is a strange precedent that a day trader, simply making an income with an account nowhere near large enough to impact a market, is morally deficient in comparison to these institutions.

      I have a lot of close friends who are religious. My father is a Christian who recently came back from a visit to Israel. But my goodness there is a small contingent of religious people who feel it necessary to expound their superiority and explain what everyone else is doing wrong. I would suggest diving back into your Bible. Start with: ‘He that is without sin amongst you, let him first cast a stone.’

      • Darren Boness

        Awesome logical post James

    • Darren Boness

      Thanks R.R for your moral judgment on people you’ve never met, hope you enjoy next Mondays post

  • Mo

    Shit trade made, gutted but you’ll bounce back.

    • Darren Boness

      Thanks Mo, the important thing is going into the next trade confidently and not letting this loss effect my trading plan

  • cat hat

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  • cat hat

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