GM.

Buff here.

In the world of trading, losses are inevitable. Beginner traders fear failure and try to avoid it at all costs. However, experienced traders understand that losses are an integral part of the journey towards mastery.

The key to mastering the art of trading lies in being okay with losing trades.

Failing Forwards

Trading is a skill that takes time and practice to develop. Just like learning any other skill, there is a learning curve involved. Losing trades are not signs of incompetence, they are opportunities for growth.

By embracing the learning curve, traders can gain valuable insights from their losses. Each unsuccessful trade can be analyzed to identify mistakes, miscalculations or wrong strategy. This introspection leads to improvements and better decision making in future trades.

Actionable steps to be able to fail forward

Every winning strategy was a fail strategy that was continuously improved.

Failing forward sounds easy concept to understand but hard to apply in real life. We need to create environment for us so that when the fail comes, we are prepared because it is expected.

This are the environment I create to allow myself to fail forward when I start:

• Create a strategy with lots of backtest to create early confidence in your strategy.

• In my honest opinion, do not do paper trading because there’s a lot of factors like slippage or the fact that it is fake money that have huge difference psychologically than trading with real money. Other than that, people can get too comfortable trading with paper money and never make the jump to real money.

• When you go live, trade with minimum $ amount the exchange allow. Not the amount you are comfortable with because some people are comfortable with losing $10k. Why lose $10k when you can learn the same thing from losing $50? When you start, the goal is to test the viability of your strategy in live trading.

• Whenever a trade went south, cut it and analyze where it went wrong. If it is because the trade got in too early, then filter that trade out.

• If you got liquidated, maybe trading size is too big or there’s a leverage miscalculation, then recalculate.

• Once you finished tweaking it, go live again and repeat.

This process will be repeated over and over again before your strategy become your winning strategy.

Conclusion

My trading craft are continuously improved through learning from my losses and this process will never stop through my trading career.

A bit of update in my real life, I am currently in the process of building my first:

1. Home

2. Digital product around trading automation

Most of my time are currently focused on that, family and trading.

I will do my best to keep up with writing my newsletter and just like trading, I am not focusing on perfection in my writing, just on developing habit to become a writer.

We are all human and there always be good pieces as well as the bad ones, that what life is all about.

That’s it for this issue.

Thank you for reading.

Cheers,

Buff