How does one manage risk in the stock market?
TRADINGFEATURED
"Giving up after you lose a trade isn’t going to change anything"
You are going to lose some trades and win some trades.
Here’s what to do after a loss -
Evaluate the trade and identify the problem.
Learn from the mistake and adjust your plan.
Test out your new and improved plan.
Giving up after you lose a trade isn’t going to change anything. When you lose a trade, remain calm, get your trading journal and evaluate each aspect of the trade. This is going to help you identify the problem and fix it.
You are not going to win every trade you place but there is a way, you can still win when you lose. When taking a loss in trading, far too many people get angry or upset, this leads them to giving up and running away from the market. Don’t let this be you.
What you want to be doing is remaining calm and not let your emotions get the better of you. The next step is evaluating the loss n a trading journal, evaluate each stage of the trade from setup to exit, there may be a reason behind your loss.
Practicing this self audit method will help you improve and adjust your trading strategy eventually leading you to the perfect trade while also helping you learn from your losses.
Credit: Quora