I had a large losing trade last week that wiped out my profit for the month.
Of course, big losses suck but depending on how you respond to them they can be significant turning points that can lead to positive progress.
Here’s my routine for handling them.
On normal trading days, I never display my current P&L for the day (looking at your own or anyone else’s P&L is toxic).
But when I have a large trading loss, I make an exception to this rule.
In fact, I do exactly the opposite of my standard routine: I display the loss so prominently on my screen that it’s front and center all day long.
I do NOT want to take losses in stride.
I want the large, red, negative numbers staring at me for the rest of the day.
I want to fully internalize the pain that comes with the loss.
I want it to be unavoidably uncomfortable for the remainder of the day.
I want to create a situation where I CANNOT avoid thinking about it.
I do this not because I’m a glutton for punishment, but because I know this sense of pain and frustration plants the seeds for future trading success.