Handling a trading loss is hard, even for experienced traders. Nothing makes you feel more like a loser than a losing trade. So many times, traders feel that if they have a negative trade then either they did something wrong or their indicators do not work. When I have a negative trade, I check to make sure I followed my rules and, if I did, that is the end of the it. I know that over time, probabilities is in my favor and by doing the same thing day in and day out, my account will increase. While this is easier said than done, it is a skill that all traders must learn. A negative trade does not mean you are a loser. Instead, it means that the market did not do what you anticipated. Taking a small loss is part of trading. No trader can be right 100% of the time unless he is using astronomical stops that will likely devastate his account if he has one. In other words, one huge loss could wipe out all of the winning trades for the month, year, or even a career.
Handling a Trading Loss
For example, I took a short position on the Euro. Most of the higher timeframes were in my direction, notice I said most. The 180 had an ATR at 1.2650 and price should have bounced to the upside. However, after waiting for about two hours, I was more focused on the 45 and 12 minute chart and forgot about the ATR on the 180 minute. Additionally, I had not drawn my horizontal line to remind myself of that value on the 12 or 45. The result was I lost 16 ticks (including slippage).
Now, I have some choices. I can blame myself and feel bad all day. I can blame the indicators. I can blame the markets. I can accept that I am human and will make mistakes. The choice is entirely up to me. I choose to accept that I am human, made a mistake, and go on to the next trade.