At any given point in your life, has there been a moment where you have failed?
Maybe it was in sports, a school test, or a project with work…
The same thing is going to happen with trading, we all experience losing trades and even I’ve had failing trades…
But how you handle those failures will help determine your outcome.
Trading isn’t designed to be a get-rich-quick scheme, it requires studying and determination to better understand the way the market works.
Throughout this week, many of you may have read about the recent tech earnings and are waiting to see how the market plans out…
Regardless of what the outcome may be, there are still plenty of opportunities out there, but how you find and handle them is all up to you.
So today, I am going to share with you some key points on how you should shift your mindset…
And how to plan and protect yourself in a market like this…
P.S – Jeff Kellogg knows what it feels like losing in his first year of trading, but failure wasn’t an option for him. Here is what he changed to improve his trading career.
Table of Contents
Risk Management
Risk management is important in many professions, not just trading.
Every trader needs to understand risk management, if you don’t, you will eventually have bigger losses compared to gains.
As the market continues to be unpredictable, it is important to understand the risk of every trade…
And just deciding to sit out until the market rebounds is not risk management.
Do you think Wallstreet is just sitting back and waiting for the market to bounce before they start trading again?
Absolutely not! Just because the market bounces doesn’t mean every stock goes up…
The same thing happens when the market goes down, not every stock is red.
You see, traders on Wallstreet understand the trends in the market and know how to spot these opportunities.
So how does risk management exactly work? Let’s focus on two key pieces of it…
Position Sizing
Your position size is going to depend on the size of your account and how experienced you are.
Are you going to dump 100% of your money into one stock in hopes it doubles? I sure hope not, that isn’t trading…
That is just straight gambling in the stock market.
With position sizing, you need to determine how much you are willing to lose.
It all comes down to how experienced you are and how comfortable you are with identifying these setups I share with you every week.
It is all about how comfortable you are with these setups, but also how experienced you are.
I have seen trades move as much as 50% in a matter of minutes. You definitely don’t want to be on the wrong side of that.
If a trade never works out, it’s important to follow my #1 rule…
But ultimately it is important to size accordingly based on how much you are willing to risk and understand that if you made 10 trades, not all of them may result in a profit.
For every trade I am in, I try to set a goal to make 5-10%, sometimes more.
More Breaking News
- Viatris’s Stock Surge: A Sign of Strong Performance or Speculative Growth?
- Darden Restaurants Surge: What’s Fueling the Unexpected Rise?
- Growth or Bubble? Unpacking the Fast Rise of AppLovin’s Stock
As a trader, you shouldn’t focus on a dollar amount, but rather on a percentage gain when entering a trade.
Setting A Stop Loss
Trading is inherently risky, so setting a stop loss is absolutely critical.
Without it, you won’t know when to cut your losses and you are hoping the stock decides to go back up.
Many traders think this stock HAS to go back up, but it doesn’t.
For every trade, I calculate what I am willing to lose and where I will cut losses.
Here is an example…
This is important to have because no trader wants to lose all of their earnings on one single trade.
Every trader needs to know how to identify these key areas and this is how I plan it.
If the stock is also not performing the way you intend it to, get out. I do this all the time to prevent any further losses and it’s on to finding the next trade.
Self Doubt
How often do you doubt yourself after a few losing trades?
Imagine losing $1 million dollars…
The value of the dollar varies for everyone but losing in general stinks.
Everyone here today needs to understand their losses and learn from them.
If you are not studying and learning from your losses, they will catch up to you.
It is important to review and dissect your failing trades in hopes of not making it again, and if you don’t, you’re not learning anything.
Just because you suffer a few losing trades, you shouldn’t decide that trading isn’t for you.
I have had students who went months without trading just to study so they were better prepared.
I have also had students who lost their first year, but they realized it was part of trading and never gave up.
You need to ask yourself, how badly do you want it? How badly do you want financial freedom?
Don’t ever doubt your potential, and the more you prepare and study the more you will evolve as a trader!
Missed Opportunities
Everyone here will miss a big trade, I have done it plenty of times…
But that is going to happen, so don’t let FOMO kick in and you buy at the wrong time.
In fact, I missed this one…
Just because you missed an opportunity it doesn’t mean the end of the world.
You see, when I miss an opportunity and still hear about it, I do this…
There will always be opportunities, but it’s important not to trade for the sake of trading.
Final Thoughts
As a trader, we have to accept that there will be good days…
And there will be bad days.
But it’s important to understand that everything I teach you is going to help you better understand how trading pennystocks work.
If I was just giving you the top 5 hottest stocks in the market, would you know how to trade them?
Being able to spot an opportunity is one part of the puzzle, but you also need to know how to trade them.
Continue to practice and study every day!
I don’t want you to miss the next opportunity out there!
Cheers,
Tim
P.S – Did you miss out on these two huge opportunities this week? What could an extra 157% do for you in just 2 days?
Leave a reply