Last week we discussed a simple technique that helps keep my mindset focused on the price action, rather than on my P&L, after suffering a trade loss.
You’ll find last week’s article here if you missed it – https://yourtradingcoach.org/trader/its-how-you-choose-to-react-that-makes-all-the-difference/
So this week… I want to go a little deeper.
Because there is something that needs to be in place BEFORE this technique is applied, if I really want to gain maximum benefit from its use.
A belief system.
At the core of my approach to engaging and acting in the markets.
And that is…
Accept all possible losses before entering the battle!
We have talked about pre-acceptance of individual trade risk before – https://yourtradingcoach.org/trader/pre-acceptance-of-trade-risk/
But today’s idea goes well beyond that.
It is about ALL possible losses.
It is about establishing a mindset during pre-session preparation, before the market is open, where I am completely at ease with the idea of MULTIPLE trade losses and closing out the day at the maximum loss limit.
Complete acceptance!
Of all possible losses.
This is the first of six parts of Richard McCall’s ACTION Plan, from “The Way of the Warrior-Trader”, for developing an effective performance mindset. I highly recommend this book if you’re into the idea of applying lessons from samurai philosophy to the trading arena. And of course to get the final five parts of his ACTION Plan.
Accept all possible losses before entering the battle!
In fact, I take it a little beyond acceptance.
I EXPECT it.
It’s like acknowledging that the default future is for a full session loss… decreed by the Trading Gods as inevitable unless I can demonstrate sufficient skill to prevent it.
Most traders operate like this:
And the result is performance anxiety, doubt, hesitation, FOMO and all myriad of other problems.
My plan is to operate like this:
This doesn’t mean I want to end in drawdown. I will do everything in my power to defy the Trading Gods and finish the day somewhere to the right of that line.
It simply means that I’m absolutely fine with the day ending at a complete loss. I’ve pre-considered the outcome. And accepted that this is something I can manage. Something I can survive. And something that I can overcome.
Maybe it’s just me? Maybe I’m wired a bit strange?
But I don’t think so.
If you struggle with the idea of loss, maybe you need to reconsider your relationship to risk. And maybe you could give this a try. I believe it helps me. Maybe it will help you too.
Pre-session… I cast my mind forward several hours and imagine a full session loss. How does that feel? Can I accept that?
If not, then I have no business trading today.
But if I can accept this outcome, then it’s game on. Because while the Trading Gods might be planning a full session loss, I’ll be damned if I’m going to go there without a fight.
Happy trading,
Lance Beggs