What do you do when you exit a losing trade?

I have to acknowledge Mark Douglas for pointing out how everything in our education and professional lives prepares us to fail in trading.


Very true.

I do have them sometimes. I file them away for future reference when I end up in a similar situation.

People’s perspectives are different. People look at trading differently. Because of this attitude of theirs, traders get loss/profit in the market. When I was a new trader, if I hit a stop loss, I would get up to cover that stop loss. And as a result, my account balance would be empty. Acceptable no. I have stopped over-trading since then. I can say from my experience that there will be a loss in trading, this loss must be accepted and move forward in trading, then it is possible to develop as a successful trader in life.

All my trades go into my journal - post a losing trade I will look and see did I make a mistake, did i deviate from my system
If so then I mark that down as “user error”
If I took a trade but failed to see something which was acting against my system then I will mark it down as “technical misread”

if it’s just a straight forward loss then I very quickly put it behind me and look for the next trade - maybe there won’t be a next trade that day and that’s fine
It took me a god while to accept trading losses - nobody likes to be told that they’re wrong

Also it’s important not to “revenge trade” or “try to get the loss back”

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If I see that I’m loosing, I prefer to quit, before I loss everything

One has to understand that trading is risky and you can lose money anytime, since its difficult to predict the movement of the market. Start the day with zero expectations and that should make things easier. Save up enough and then try your hand at live trading and don’t forget to practice as much as you can on the demo account. Another advice would be not trying to recover your lost money immediately after you lose. You might not be in the right state of mind and could end up losing more.

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I really could not have put it better, great advice!

It is very important to follow the trend. Failure to follow the trend can lead to a loss. When I open a trade, the trade makes a profit of 20 pips and brings the stop loss to the entry point. If the price is ever volatile, I will not have any loss. Another thing is that when I see the market volatile, I close my trade.

Hi , I am a beginner , I don’t know if I am correct but all what I will do if I exit a losing trade is start developing new plan to perform better in the next time and choose another strategy to work on. Any other suggestions?

I personally move on instantly without any ‘what if’ questions or regrets. Whatever is done in trading, good or bad teaches the trader something. So, I take my losses in an optimist light and get detached to the losing trade after learning my lesson.

Move on. I had reasons for getting into the trade and the only reason I would get stopped is if those reasons didn’t play out. No point in dwelling. If risk reward is good it doesn’t matter.

Of course “what if” questions appear after exiting a losing trade. It’s inevitable I’m sure. However, you have to understand that negative emotions which come into your mind after losing trades only worsen your next trading activity. You start panically scare of trading with permanent thoughts like “it’s another day of my losses” or “i’m not sure i handle this day”. Hence you worsen not only your trading day, you also worsen your physical and mental health, and consequences are terrible. If you faced a bad day just think of how you will gain profit the next day, because it’s only an experience which gives you more power.

I guess that the question would be more proper if it sounds like “what you shouldn’t to after exiting a losing trade”. Every trader shouldn’t start to analyze losing trades mostly because it won’t bring any benefits for you, I tend to suppose that traders must analyze only winning positions beause it may help them to edit their strategy and make it better in several times. Of course traders shouldn’t be disappointed because losses are the best part of trading activity which takes money from you, while brings you lots of experience. Remeber that you always will lose money from time to time, but it’s only in your favor.

I review my trade and I also keep a journal.
If all the boxes are checked that it was a good entry then I chaulk it up to the market being the market

But if review and find that it wasn’t even a good setup I mark that in my journal. And make sure I understand why I thought it was a good setup at first and then also why it wasn’t.

  1. Step 1: Empty your Trading Account.
  2. Step 2: Take a Break.
  3. Step 3: Accept the Loss.
  4. Step 4: Investigate the Root Cause.
  5. Step 5: Build A Fool-Proof Process.
  6. Step 6: Score Small Wins.
  7. Step 7: Manage Risk Aggressively.

I am in loss once open position, cause spread is deducted from my balance. Loss is an expense of trading trade. We are humans, ‘what if’ will always be besides us. Without it we could’n make any progress. Journals and analysis are used for that reason. It is like a chess game, you win and loose. Loosing helps to improve.

I certainly don’t move on before I’ve figured out why I lost, that way I’m bound to repeat the same mistake.

There are no losing trades when you have a weapon with you. SL! Let it hit and work on the other one.

Agreed with this. As long as SL is set and placed, you should be able to maintain and minimize the losses, tho that would work if you have been paying attention to risk and money management.

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