Profits and Cutting Losses

VISION AND MISSION

In this blog we are going to start out on your journey to trading success.

In fact I am going to tell you where you are going to go – now that may seem a little far fetched but the truth is we all travel a very similar path when it comes to trading markets.

We come to the market brimming with confidence and full of hope.

If any of you have started businesses you will know what I mean. We have all these plans and we only have to put them into practice and the cash will roll in, life will be good, we will have made it.

It is a great pick-me-up for sure!

I have started a number of businesses in my life and some of them have done brilliantly including my trading business – but it never quite goes how we plan.

There are always obstacles and thank God for that – because that is how we learn – that is how we become experts… (Tweet this)

In fact it is the knowledge and experience that we build by doing these things that makes life interesting, that makes us the people we are!

The trading business is no different and when we enter the arena we often do not know what we are getting involved with – certainly I did not back in the 1980s.

When we start trading we are focused, almost entirely, on profits.

This is positive because what we focus on we tend to get – that is the law of attraction in action.

But we tend to ignore risk and we simply cannot do that in a high risk environment.

The trick is to stay focused on profits BUT to learn how to handle risk at the same time.

CUTTING LOSSES

In trading terms this may mean “cutting losses” which refers to the practice of bailing out of losing trades when they reach a previously defined point – set by yourself.

If you don’t do this yourself then you will find that your emotions and instincts do it for you – usually at the worst possible time and that will be the subject of a future module.

But there is an easier way than cutting losses – you can trade with vehicles which do all that for you in the price.

Finally the skill you want to learn is “running profits” which simply means getting the most out of every trade.

Action Step

What can you do to get ready for the next Module – Risk Control

Think about what you would consider an acceptable amount to lose in the markets and the amount you would expect to win.