Limit Losses Like The Best Traders In The World

Refer back to the June 22, 2006 article (entitled "Be a Profitable Trader - 5 Minute Daily Conditioning") in this Blog.

Whether you trade emini futures, IBM, MSFT, or exotic option combinations, the First Step that is crucial to becoming a profitable trader is to decide, make a choice, that "I am a profitable trader".

In the June 22, 2006 article in this Blog, I described how to condition yourself so that you consistently make that decision.

Yesterday, I elaborated on the first action item in conditioning.

The second action item in conditioning is to consider the pain you have experienced before because you have not consistently thought of yourself as a profitable trader. Imagine experiencing that again in the present and future. Do this for 30 seconds. Notice how you feel as you do that.

Today, I want to point out and emphasize that you must limit the time you spend on the second action item.

Do not dwell on the pain. Limit the time you spend noticing the pain to 30 seconds or less.

World class "success gurus" with whom I have studied all say that you get more in your life of what you focus on. So if you keep focusing on the pain of losses, then you'll get more losses. To be a profitable trader, you have to get wins that are larger and/or more frequent than losses. Therefore, limit the time you spend on thinking about losses.

That's the way the best traders in the world limit losses.

This second action step is necessary when you first begin to condition yourself to consistently decided to be a profitable trader. It's also necessary when you need to refresh the conditioning. But in a future blog, I'll show you how to short cut your conditioning so that you "skip" this step.

We'll chat about more pleasant stuff tomorrow...

Raymond T. Lee
LeisurelyCashFlow.com
Raymond@LeisurelyCashFlow.com