mp3 - 35 why traders hold on to losing positions

35 why traders hold on to losing positions

practice these concepts with a free practice charting and trading account here: http://bit.ly/it-forex-demo3

for the full lesson with images, text, links, and discussion, go here: http://www.informedtrades.com/5099-psychology-trading-effect-trading-losses.html

for our full beginner course in technical analysis and trading, go here: http://www.informedtrades.com/index.php?page=freetradingcourses

and of course, don't forget to jump start your learning as a trader by registering as a member of our learning community: http://www.informedtrades.com

video notes

a lesson on how the ability and willingness to take losses when trading the forex, futures, or stock markets is one of the key factors that differentiates successful traders from unsuccessful ones.

trading success means comfort with being wrong

in our last lesson we introduced the concept that money management and the psychology of money management as the most overlooked but most important component of trading success. in today's lesson we will begin to look at one of the most important components of the psychology of money management: a willingness to be wrong.

humans in general grow up being taught by their environment of the importance of always being right. those who are right are envied as the winners in society and those who are wrong are cast aside as losers. a fear of being wrong and the need to always be right will hold you back in general, but will be deadly in your trading.

with this in mind lets say that you have been watching my videos and feel that i am an intelligent trader, so you want me to give you a method to trade. i say fine and give you a method and tell you that the method will trade 100 times a year with an average profit of 100 points for winning trades and an average loss of 20 points for loosing trades. you say great and take the system home to give it a try.

a few days later the first trade comes and quickly hits its profit target of 80 points. great you say and call a bunch of your friends to tell them about the great system you've found. then a few days later the next trade comes but quickly takes a loss. you hold tight however and then the next trade comes, and the next trade etc until the trade has hit 5 losers in a row and amounting to 100 points in loses on the losers so you are now down 20 points overall, and all your trader buddy's who started following the system after the first trade are now down 100 points.

now you feel really dumb and are the joke among the group of guys that you trade with, so the next day you come back to me yelling about how bad the system i gave you is. i say ok and tell you i have another system for you. this one also trades 100 times a year but has a higher success rate that i think he will be happy with. you take this system home and the next day it quickly hits a winner followed by another then another and then another until over the next few days you have 5 winners in a row totaling 50 points in gains for your account. getting very excited you call all of your trader friends and tell them that this time you have found it, you tell your wife how you haven't lost on a trade in two weeks and you rub your perfect trading statement in the face of all your trader buds as revenge.


so now ask yourself this question. if you were really the trader in this example which system would you rather have? i can tell you from experience that the large majority of traders will take the second system without a second thought, and on top of that will stick with it even if it hits a few losses that wipe out most or all of its gains.

although the successful trader will want to know a lot more about both these systems which we are going to learn about in the lessons that come before deciding which one to trade i can tell you that what they will glean from the above information is the following:

practice these concepts with a free practice charting and trading account here: http://bit.ly/it-forex-demo3for the full lesson with images, text, links, and discussion, go here: http://www.informedtrades.com/5099-psychology-trading-effect-trading-losses.htmlfor our full beginner course in technical analysis and trading, go here: http://www.informedtrades.com/index.php?page=freetradingcoursesand of course, don't forget to jump start your learning as a trader by registering as a member of our learning community: http://www.informedtrades.comvideo notesa lesson on how the ability and willingness to take losses when trading the forex, futures, or stock markets is one of the key factors that differentiates successful traders from unsuccessful ones. trading success means comfort with being wrongin our last lesson we introduced the concept that money management and the psychology of money management as the most overlooked but most important component of trading success. in today's lesson we will begin to look at one of the most important components of the psychology of money management: a willingness to be wrong.humans in general grow up being taught by their environment of the importance of always being right. those who are right are envied as the winners in society and those who are wrong are cast aside as losers. a fear of being wrong and the need to always be right will hold you back in general, but will be deadly in your trading.with this in mind lets say that you have been watching my videos and feel that i am an intelligent trader, so you want me to give you a method to trade. i say fine and give you a method and tell you that the method will trade 100 times a year with an average profit of 100 points for winning trades and an average loss of 20 points for loosing trades. you say great and take the system home to give it a try. a few days later the first trade comes and quickly hits its profit target of 80 points. great you say and call a bunch of your friends to tell them about the great system you've found. then a few days later the next trade comes but quickly takes a loss. you hold tight however and then the next trade comes, and the next trade etc until the trade has hit 5 losers in a row and amounting to 100 points in loses on the losers so you are now down 20 points overall, and all your trader buddy's who started following the system after the first trade are now down 100 points.now you feel really dumb and are the joke among the group of guys that you trade with, so the next day you come back to me yelling about how bad the system i gave you is. i say ok and tell you i have another system for you. this one also trades 100 times a year but has a higher success rate that i think he will be happy with. you take this system home and the next day it quickly hits a winner followed by another then another and then another until over the next few days you have 5 winners in a row totaling 50 points in gains for your account. getting very excited you call all of your trader friends and tell them that this time you have found it, you tell your wife how you haven't lost on a trade in two weeks and you rub your perfect trading statement in the face of all your trader buds as revenge. so now ask yourself this question. if you were really the trader in this example which system would you rather have? i can tell you from experience that the large majority of traders will take the second system without a second thought, and on top of that will stick with it even if it hits a few losses that wipe out most or all of its gains. although the successful trader will want to know a lot more about both these systems which we are going to learn about in the lessons that come before deciding which one to trade i can tell you that what they will glean from the above information is the following:

trading money mangementtrade man forex money management indicatorlesson 3 money managementmomentum stock options trading trade management34 why most traders lose money and the solutionmoney management trading selmckenzie selzer mckenziehow to get organized for schoolforex money managementexcel tool for forex trading analysis35 why traders hold on to losing positions40 how to determine where to put your initial stop loss orderhow to profits from currency trading with proper money managementhow to properly manage your money like the rich tom ferrytaoism the philosophy of flowtao in everyday lifealan watts nature of godrobert kiyosaki the cashflow gamecash flow statement beginners guideincrease cash flow and become rich beatthebushwhere to invest for cash flow and wealthhow to manage your money 50 30 20 rulehow to budget your moneymoney management 101 how to manage your moneyrichest people in the world how they thinkmoney management 101 what they should have taught us in schoolfinancial problemshow to become a millionaire index investing for beginners tony robbins lewis howesoprah winfrey talks with thich nhat hanh excerpt powerfulproven biblical money principles dave ramseydr frances welsing debate william shockley 1974saving money tips budgeting your moneyhow to be good with moneymoney management 101 how to manage your money for financial freedomfinance 101 finance overview basics and best practicespersonal finance 101 personal finance basics and fundamentalsback to school organization how to organize your binder supplieshow to budget and save money money management tipsthe 20 rules of moneyfundamentals of wealth managementhow to teach children to read phonetically tutorialhow to make a budget in excel part 2how to make a budget in excel part 3how to make a budget in excel part 4how to make a budget in excel part 5how to analyze a balance sheet7 places your money needs to go how to save moneythe alchemy of finance by george soros full audiobookexcel crash course for finance professionalsbudget concept and typesmoney management monday excel budget tutorial you need a budget frugalchiclifehow i manage my money featuring my excel daily expense tracker steal this nowexpenses in excel tutorial create it in just 12 minutesusing excel spreadsheets to track income expenses tax deductions and savingshow to use excel to track expenses money management e michelle10 things the rich teach their kids about moneytrade your way to financial freedom by van tharphow to day trade for a living summary by andrew azizcommunication and assertiveness master communication and assertiveness skills training dvd full10 levels of financial independence and early retirement how to retire earlyhow to budget and save money 2021 free 2021 budget template

practice these concepts with a free practice charting and trading account here: http://bit.ly/it-forex-demo3

for the full lesson with images, text, links, and discussion, go here: http://www.informedtrades.com/5099-psychology-trading-effect-trading-losses.html

for our full beginner course in technical analysis and trading, go here: http://www.informedtrades.com/index.php?page=freetradingcourses

and of course, don't forget to jump start your learning as a trader by registering as a member of our learning community: http://www.informedtrades.com

video notes

a lesson on how the ability and willingness to take losses when trading the forex, futures, or stock markets is one of the key factors that differentiates successful traders from unsuccessful ones.

trading success means comfort with being wrong

in our last lesson we introduced the concept that money management and the psychology of money management as the most overlooked but most important component of trading success. in today's lesson we will begin to look at one of the most important components of the psychology of money management: a willingness to be wrong.

humans in general grow up being taught by their environment of the importance of always being right. those who are right are envied as the winners in society and those who are wrong are cast aside as losers. a fear of being wrong and the need to always be right will hold you back in general, but will be deadly in your trading.

with this in mind lets say that you have been watching my videos and feel that i am an intelligent trader, so you want me to give you a method to trade. i say fine and give you a method and tell you that the method will trade 100 times a year with an average profit of 100 points for winning trades and an average loss of 20 points for loosing trades. you say great and take the system home to give it a try.

a few days later the first trade comes and quickly hits its profit target of 80 points. great you say and call a bunch of your friends to tell them about the great system you've found. then a few days later the next trade comes but quickly takes a loss. you hold tight however and then the next trade comes, and the next trade etc until the trade has hit 5 losers in a row and amounting to 100 points in loses on the losers so you are now down 20 points overall, and all your trader buddy's who started following the system after the first trade are now down 100 points.

now you feel really dumb and are the joke among the group of guys that you trade with, so the next day you come back to me yelling about how bad the system i gave you is. i say ok and tell you i have another system for you. this one also trades 100 times a year but has a higher success rate that i think he will be happy with. you take this system home and the next day it quickly hits a winner followed by another then another and then another until over the next few days you have 5 winners in a row totaling 50 points in gains for your account. getting very excited you call all of your trader friends and tell them that this time you have found it, you tell your wife how you haven't lost on a trade in two weeks and you rub your perfect trading statement in the face of all your trader buds as revenge.


so now ask yourself this question. if you were really the trader in this example which system would you rather have? i can tell you from experience that the large majority of traders will take the second system without a second thought, and on top of that will stick with it even if it hits a few losses that wipe out most or all of its gains.

although the successful trader will want to know a lot more about both these systems which we are going to learn about in the lessons that come before deciding which one to trade i can tell you that what they will glean from the above information is the following: