Learning to manage losses (Risk control)

in Project HOPE6 months ago

Hello community, I hope you all have a great weekend, I would like to talk about something that many do not like, I think almost no one, really, but you will agree with me that Losing and being wrong is part of our life. There is not someone who is never wrong, there is not a person who has not lost at something, it is a reality that we have to deal with.

When it comes to business, it seems that people become more sensitive, because every business or enterprise from the beginning is perceived and conceived with the possibility of making money, not losing it (even when it is within the possibilities). But it can happen that we lose at the beginning and then we do better, or it can happen that, without a proper risk control, we lose everything, or not?.



Well, in this sense, I want to remind you that a few weeks ago I shared some posts | Sharing a little of my trading experience - Part 1 Part 2|in which I commented some aspects that I considered important in trading, world in which I am training myself since a few months ago and I have started with my real account to trade in Forex.

I must say that the difference is enormous, although to practice in a DEMO account (with fictitious money) is important, because it allows to know a little the market, and in addition to test the different strategies that will be those that you will carry out in real account and it is supposed to make you earn money, but when beginning the things can be very different...


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I can't say it's all been loss, luckily no, actually it's been more gains than losses, but one thing to learn, and after several days of good run, I must say I learned it, is to LOSE.

Yes, as you read, we must also learn to lose, because when we start working in this TRADING there are many factors that we do not control, regardless of having in mind all the aspects that are necessary to avoid losses, it may happen that we lose, and we should not get out of control because of that.

A few days after I started trading in the Forex market, days in which I can say that I was profitable, I felt pretty good, then I made some mistakes, coupled with market manipulation, which led me to lose part of what I had previously earned, and the feeling is not pleasant, not really. but I still feel good . And I say again, and I said it to myself that day, you don't always win, just as you won't always lose.

This is part of the learning process. I already know what mistakes I made, and I will try not to make the same mistakes again, although I know that just as I won, I will also lose. The important thing is that what I win is more than what I lose. Without a doubt I can say that trading is really something that can be very profitable, but it can also lead you to lose all the money easily and quickly.

I can also say that it is not an activity that everyone can do, because you have to be very meticulous, and we know that there are people who have difficulty taking things seriously, it is not a bet, it is something in which you have to take conscious decisions, it takes you to think how much you are willing to lose before making a transaction, this could be against what many expect from a business, which is only win, but knowing that a loss can occur is something that not everyone is prepared for... Anyway, I wanted to share this experience with you.

I would like to know what you think about it:

Would you enter a business where losing is in the cards?

Have you had any experience in trading?
How do you handle losses?


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Woah!!! This is quite a read, I truly enjoyed it completely.

I, myself haven't branched in Forex Trading, but my friend is trading. And I learn from him not like learn the trading per say, but the mentality towards trading. I must say you have a better mentality towards trading, although he is gradually getting it. Trading is more about your mental strength than your actual knowledge of the market. Your ability to control yourself when you lose, so you don't completely wipe your account is very necessary. I truly like the way you about trading, and it is always good to have such mentality. You ain't always going to win all the time, you lose too but ensure your gains are more than your losses and you are good. My friend gets over excited whenever he is having a winning streak and he actually forgets that he can lose, and whenever he starts to lose, he lose huge because he doesn't have to control to stop and accept he has lost for that day.

Great content, thanks for sharing with us @josevas217. Will definitely share it to my friend.


Hi @menoski
Yes, one cannot get excited and lose your head when you are winning, because you simply have the opportunity to lose control and lose everything.
I believe more in working by goals, a daily amount based on your capital, let's say between 3-5% is a safe number. Looking beyond that is not crazy, but it can lead you to greed, even, if you already earned that, stop trading, don't continue. You have already met your goal for the day, it is not about being conformist but organized, respecting a scheme.
And also an amount of loss, if you reach this amount in one day, do not continue trading. It is a matter of being organized, creating a strategy and respecting it.
Thank you very much for your support.

hmmm... actually, I will never do the Forex trading, that's not for me. I always looked at investing in Mutual Funds earlier, until recently when I got into crypto and take my decisions to invest in coins.

Right now, crypto investing is easy, especially since we got in before this bull run.

But I can imagine other trades that you talk about - fundamental analysis and speculation, constant monitoring of price. As you say its meticulous. My Dad also sees the Profit and Loss statement, team running the company, and the moves they do.

It seemed heavy especially, if you like not into it, you do other things as brain thinking is in that. Somehow, in crypto starting from new, and not having this profit and loss statement analysis, but fundamental analysis of a easier sort was easier, especially as there are good educational resources out there.

The most important mindset, is being serious about making money I guess, not getting attached to the project and getting out of the position when things are not working.

I am thinking hard what to do, in this bull run... but taking profits on DEFI coins started and seeing the trading view charts. We have to take profits and move on and learn I guess.

Someday, after getting enough money and confidence I may venture into day trading but let me see...its stressful, but lets see... its the fees too.

Somewhere all this requires some maturity. But I think people enjoy this, as its like calculated gambling, I am overwheled still but causious. Because want to get as wealthy as possible, don't want to lose wealth that built with patience. Anyway.

Yes, Forex really is not for everyone. For some reason I have not done so well in trading with cryptocurrenices, but I am doing better in this new system. It is complex, but I feel more comfortable, I continue with cryptos, but from another approach, not from trading.
I continue to prepare myself, and I will continue to do so, it is something I have focused on, and I am determined to make money in Forex, and in fact, I am already at it. A profit of 13.3% on my capital in 6 days trading, not bad. But I must improve it, and I will do that.
Thank you very much for commenting @mintymile.

Hi @josevas217
It is very good how you are analyzing your results, in an objective and methodical way, Good!
Losses are not easy to internalize.
Particularly, I am convinced that to get into trading, you have to be aware of the risk that you run, as well as the benefits that can be obtained, "a Russian roulette".
Excellent reading my friend!
Have a great day!

Yes, totally methodical, it is the only way we can minimize risks. And this does not mean that we eliminate losses completely, they will always be there, but we must focus on the fact that profits should be much more.

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Greetings friend @josevas217.

It is always a pleasure to read your extraordinary writings because you leave us many positive things, and that is very valuable for all of us, it is totally true what you express:

Losing and being wrong is part of our life . There is no one who never makes a mistake, there is no person who has not lost something, it is a reality that we have to deal with.

I believe that our success in any objective depends on this, since having losses at some point in any type of investment we make does not mean that we cannot achieve the success we set out to achieve.

It is important the aspect of sharing your own experiences with all of us as they are real experiences that we can learn from at some point in our life either doing some type of TRADING or in another type of field.

Thank you my friend for sharing such interesting and rich content.

Thank you very much for your kind words. The reality is that it is a complicated field, it is not pleasant for anyone to lose, but you learn from that. And in this case we should not be one of those who make the same mistakes over and over again.

Greetings dear friend @josevas217

Excellent topic, "Learning to manage losses" precisely in a context of losses was what encouraged me to study trading, and since then I have been more mentally prepared when making any movement, as you indicate although we can lose all the money easily and quickly, we can also make trading a very profitable activity, as long as we have control of ourselves, our emotions, because this activity is 100% dominate us from the psychological. Excellent entry.

Hi @lupafilotaxia
Thank you very much. I didn't know you also did traiding, good to know. It seems unbelievable, but this job makes us aware of many things, and leads us to plan and organize ourselves much better in everything. Because as you say, you can win or lose quickly.

you are absolutely right trading is not a game at all, a few hours ago I saw a news that a guy in the US threw himself to the train tracks when he saw that he had lost more than 700 thousand dollars with the robin hood app, although this error occurred due to failures of the application the guy thought he really owed that money and took the decision to take his own life, a sad and unfortunate news that reminds us that operating in the markets with real money is not a game.

That is terrible news. I have heard of that application, I particularly don't like to venture too much into things I don't know, I invented some time ago, didn't study enough and lost money, I don't want it to happen to me again.

Hello friend, I understand you, not all of us are used to lose, but as you say in that world is something that can happen every day, but it does not mean that you do not win too, I think one of the pillars of this profession is to be able to have patience and also a good control of emotions, master the techniques and concentrate on your analysis. Greetings!