Making mistakes is part of human nature, and this is why every trader sooner or later needs to deal with losses. Not the losses during the day or another time period are dangerous, but the wrong psychological reaction to them.
If the trader doesn’t have a clear plan and gives in to emotions, he tends to take unnecessary risks. This causes further growth of the losses. To avoid such things, the trader should admit his mistakes and analyse them, instead of deluding himself. Then he will be able to understand, which trading strategy is the most effective one for the current moment. Clear analysis of mistakes is possible when the trader keeps the following principles in mind:
- Limit the number of deals per day, especially if you are a beginner. Make regular breaks and take rest from trading.
- Don’t evaluate your life with your income and your trading success.
- Accept the current state of the market and adapt to it instead of fighting against it.
- Keep control of your losses and don’t forget about risk management.