PSYCHOLOGY, by Mark Forrester There will be no not threat of allowing your-self the possibility of financial loss. If you find yourself considering, weighting, or judging, then you are either not predefining what a loss is or you are not executing them immediately upon perception, in which case, if you donât and it turns out to be a profitable, you are reinforcing an inappropriate behavior that will inevitable lead to disaster. Or if you donât and the loss worsens it will cause panic, which will make it difficult to stop. The next error after letting a loss get out of hand is usually not taking the next opportunity, which invariably is always a winning trade. The markets may be a mass of confusion, but you can address it by clearly defining a target profit objective, and entrance and exit strategies. The more structure you have to follow, the less uncertain and unorganized you'll feel. You will know what to do and when to do it. The more each element is defined, the easier it will be to follow your trading plan, and maintain discipline. For instance, âget out of your losers quicklyâ this is easy advice, but doing it took the knowledge that you are not right all the time, so accept this knowledge. I have learned from experience that being a profitable trader one must engage in more losing trades than winning trades. Some of my most profitable trading months my clearing firm had me clocked at around 37% winners. I was simply profitable because I was holding my winners 5 times longer than my losers. I was shocked to learn this, but the matter of fact is when you hold your winners for long periods of time, a trader will become confident, setting himself up to make sound decisions. It is much easier for a trader to protect his profits by making smart decisions, than to work all day to recoup losses. When a trader is faced with recouping losses, the trader will become anxious and stress allowing mistakes to be made.