Robert Millar • 18th September 2018

It’s pretty strange to think traders play a game where losing is inevitable. Naturally as humans, it is our instinct to avoid losing or having negative drawdowns in any activity at all costs. They take a toll on our mental capital and make us question our abilities as a trader.

It’s one of the rare professions where you can literally come to work and lose money. Nobody likes to lose obviously, but there has never been (nor will there ever be) a trader in history who has boasted a 100% win rate.

Losing is an important part of becoming successful in trading and in some aspects even more important than winning.

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So, if it is so important yet painful, how does one take and recover from losses correctly? Being able to answer this question and apply these methods below will exponentially decrease your learning curve and put you on a straight path to long-term profitability.


Why is losing so important? Because losses give you an opportunity to grow and expand your knowledge base and trading strategy IF you take the proper steps to build on them. 

The best way is to constantly analyzing your losses, journaling them, and taking notes on the setups and variables that failed you, then in a few months you should have a massive list of things NOT to do.

Maybe you see that your stats from your trading journal show you don’t trade dip-buys well or scalping. That’s good! Now you know what you need to work on and what you should be focusing on. Everyone has different strengths and weaknesses in trading. 


Once you start to learn from your losses and see what you don’t do well, you can cut out all that noise and refine your strategy to the point where you only trade things that you have tracked and PROVED to work time and time again.


Nothing feels better and clears your mind better than a nice workout or hot yoga session. It is scientifically proven that endorphins and other hormones from exercise help to improve your mood and mental state. 

Not into working out or yoga? No problem, go fishing, skiing or even throwing the ball with your dog at the park. Anything! Get outside and enjoy some activities. 

If you had a pretty rough morning or afternoon trading, stop what you are doing and hit the gym. You will come out of the workout session feeling refreshed and rejuvenated all ready to analyze that loss or even bounce back mid-day.


Never keep things bottled up. 

I’d say 90% of new traders have unrealistic expectations when they get started. When things don’t go exactly as planned they get emotional and keep it bottled up. Why?

They are not used to losing in the market. Losing is normal, it’s going to happen. What you do to minimize that loss and bounce back is what’s important. 

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Everyone should have a community or tight knit group of trading buddies around that you can bounce ideas off of and talk about recent trades with.

Had a really nasty trade and broke your trading rules? Talk about it with your group and let it be known. 


If your loss was bad enough or if you are just stuck in a losing streak there is nothing wrong with shutting off the screens for the day or even a few days.

After taking some losses and having some rough patches I took days off from trading and come back to the screens readier than ever before.

Taking time off will help you clear your mind and reset your emotional state to equilibrium. Spend time with family, friends, play some golf, whatever.

If you are an addict like me though you will check on the markets here and there and that is ok too. It can be hard for us to fully step away but it is very helpful to step away from trading for a bit as bets as you can after a tough loss.

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