Nothing bad happens to a trader...
... if you trade like a professional.
Here’s what I mean:
Last week I took a loss on a trade.
(Which you might call a bad thing, and thus negate emphatic subject line, but stick with me and I hope to change your mind.)
This loss was my own fault. I have specific guidelines I set up for helping me decide when to jump into a new trade and when to pass on one.
Well, I violated those guidelines.
Of course the stock managed to begin a parachute off a cliff face. Dropping 67% in a few weeks and ensuring that I only had a couple choices when it came to this ticker:
Follow my guidelines for enduring a losing trade like this (and thus tying up my capital for weeks — probably months.
Abandon the trade and move on.
I chose path #2.
Locking in a rare loss for the year but freeing up my remaining capital to be used for future trades.
So, how is this not bad?
Because every failure also brings an opportunity for learning & growth.
I’ve heard it said that “nothing bad happens to a writer.” That’s because they can turn bad situation into a good story. And if they are using their writing for marketing material, they can turn bad situations into sales.
Thus, a bad thing becomes a good thing.
So, ultimately, was it really bad?
I think not.
And I’ve adapted this mantra to my trading behavior too.
Whenever I face a scenario where bad things are happening to me I can use it as a learning opportunity.
(Bad trades are usually because I violated my own guidelines — though I do have another trade that just decided to flush the toilet for almost no valid reason, that does happen too. That one has already made a good recovery, so I’m sure it’ll ultimately turn out fine.)
If I learn the lesson and make better trades in the future, is it really bad?
I think not.
We’re coming up on the end of the year.
Typically, the new year brings new resolutions. Which makes the end of the year a good time for reflecting on what worked, what failed, and what I want to do about it.
I’ve already got most of my resolutions in mind.
As soon as my end-of-the-year Holiday vacation is finished, I’ll be starting those resolutions.
Mentally, I’ve started now. I’m just waiting for my world to catch up.
Anyway, I say that to encourage you today:
Take some time and reflect on the “bad” trades this year, learn your lesson, and flip them into good things.
And then, from now on, remember that nothing bad happens to a trader.
— Ricky Ketchum