Let me blunt here: you will lose money when trading, we all lose and this is a fact. However this is an important thing to digest and it amounts to two principles essentially: first, if you can’t afford to lose any money from your trading account then you shouldn't risk that capital at all and secondly, if you can't get over the fact that you will be wrong numerous times and lose money as a result of that then maybe trading is not the right thing for you.
The first lesson should really go without saying but people sometimes don't understand the simple truth that losses are inevitable. And they will be frequent, that's inevitable too.
No one can be right all the time, not even more than 7-8 times out of 10 consistently. And usually when it comes to trading being able to be right just a bit more than you're wrong is enough and most times is the best you can hope for.
So if you can't afford any losses on your capital then that capital shouldn't be part of your trading account. Find an amount of money that you be comfortable to put under risk and trade with that.
And secondly, don't ever think that you can trade profitably if what you're looking to get out of the markets is an ego boost, a confirmation that you can be right more times than not.
Losses are to be loved, losses teach us valuable lessons and improve our tactics, losses when cut to a sustainable amount prove to us that we're badly positioned in the markets and maybe we should reposition accordingly.
So losses are not to be feared or get stuck with, losses are to be loved and treated as helpful signs along the road.
Find a reliable source of information, a website or a newsletter that can quickly and effectively let you know what the conditions of the market are and base your decisions on facts and not on instinct or luck.
There is an abundance of news and information sources out there, especially now in our technologically advanced era.
News and analysis websites like Bloomberg, Financial Times, Reuters can provide a stream of news 24/7, technical analysis and ideas websites can be found by the dozen and even social media platforms like Facebook, StockTwits or even Twitter can provide crucial insight on the social aspect of trading.
One should be mindful though of two potential pitfalls: one is the credibility of the source and the other whether this source has an agenda or not. More reputable and independent sources can mostly be relied upon whereas market-makers and/or brokers sometimes have their own goals in mind.
And secondly, one should also keep in mind that too much analysis leads to paralysis in the end, meaning that you should look to have as much information as necessary to make an informed decision but no more than that.
Keep it simple, find a source that you understand and suits your style and give it a fair chance. My site InvestingBetter.com offers a selection of amazing newsletters and reports, they are worth taking a look at.
Alpesh Patel
