It may sound unconventional, but how can trading losses actually be beneficial?
The explanation is straightforward - it indicates that our money management/risk system is functioning effectively.
When operating with a strict and proven money management system (such as ours), it implies that we must acknowledge a few minor losses along our long-term journey. This is not about pride or striving for perfection in every trade; it's about achieving sustained profitability. By promptly cutting our losses, we can swiftly transition to the next trade. Failing to do so could result in tying up capital and potentially allowing a small loss to escalate into a significant one. Approaching trading in this manner is akin to gambling.
The key to long-term success lies in trading with a well-thought-out plan and executing it devoid of emotions or biases.
Therefore, the next time you encounter a loss, or even a series of minor losses, remember that the system is diligently working in your favor, just as it should. Our focus is solely on medium to long-term outcomes - not on a daily basis.
