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At least once in your business career, you may have felt the need to make more deals although you have already incurred more than your usual daily losses.
In such cases, you often think of yourself that with more deals, you will be able to compensate for your losses for this day.
But what if they ended up with the losers? After that, my friend, you prepared more pain and dug yourself a deeper hole to get out of it.
sound Risk Management It is very important if you do not want to lose your shirt, and it is especially important for daytime merchants who make many deals daily because there is a greater chance to continue in successive losses.
There will be times when you will be busy with the market movements to lose sight of your primary goal: Protect your capital.
This is exactly why you need to determine the daily loss limit. It tells you that you had enough and that it was time to fill it and call it daily.
This does not necessarily mean that you are a poor merchant; There are only days when your game is suspended, or perhaps Trading system It has not been designed for today Market environment.
Even great athletes such as Roger Federer, Stephen Carey or Lionel Messi had their share of bad days.
Just like professional athletes who are sometimes poor performance, traders also suffer from those days when they feel that they are not synchronized with the markets.
Determine the maximum loss of trading per day is not difficult. You just have to notice that this depends on Trading And tolerance with risks.
Here are some personal suggestions:
Determine your losses on a small part of your profit goal for each day.
For example, if you aim to get a 1.5 % profit per day, you can adjust the maximum trading loss on half of that, or. 75 %.
Select the maximum loss of your trading loss to half of your average gains.
If you have experience and keep a good record on your trading date, you can calculate your average victory daily and set the maximum loss of trading to half your average gain.
Let’s say that your average profit daily on all days of victory is equivalent to 0.5 %, then you can set the daily trading loss to 0.25 %.
You can also set it to a small part of a long -term number, such as a maximum 10 % loss.
With 20 trading days average average, this is 0.50 % a day.
Try these things or go out alone, and whether you have chosen to use one of my suggestions or not, and the important thing is that you have one.
The truth is that all traders will test a losing day, so you must always have a set of maximum trading level during the day.
Once you reach this extent – here is the difficult part – Stop trading for today!
Instead of escaping from reaching more commercial ideas, not ready to compensate for these losses, you just have to swallow your pride and admit that they are just one of those days you have to sit.
Ralph Waldou Emerson once said.The greatest of our glory is not in not falling at all, but in the height every time we fail.“
Learn to accept defeat from time to time, where we need to remember that trading is a long and introductory war and not a single battle.
By protecting the ego and your account today, make sure that the inconsistent losses are small enough to overcome them tomorrow.
