Income Tax Rates

To win or lose a trade is a familiar thing. We have experienced bot the joys and pains of it.

However in considering the loss of a trade, the strategy is usually sound, it is the trader that came up short.

Uh huh... that is most likely you! However, help is on the way.... I am going to discuss ways to stop financial losses, and begin being a winner at the trades. Prior to placing orders, you have to decide where your stop loss order will be placed.

You can't delve into the topic of position entry thoroughly without speaking of stops. The question is, "Why are stop losses used by so few investors?" If not using stops is a weakness for you then you want this info. This info could mean the difference between on time retirement with a fat nest egg or just 'getting by' at a later retirement date.

Plan and place stops equals your plan to win, and you are prepared to have a loss but make it through to continue trading. A look at the traders psychology of loss taking is in order here.

Every pro trader has to have a point in their minds denoting when they will get out, before they will get in. This has to be known before hand so that when the moment comes they can get out quick. This is a down-home basic knowledge the each pro-trader has to have.

What are the answers to these questions?

1.) When should you stay on board and when should you bail out?

2.) When a stock is losing, do you have a guide that lets you know when to sell?

3.) Do you have a rule of when to move your stop to break-even?

If you can't answer these questions, you're not alone. And what it means is that you need to establish some rules for yourself, especially when you go to short stocks. But, all the trading rules in the world are meaningless if you don't use them. That's why you and I need to "talk turkey" about what's really going on with you when you refuse to manage your risk in a proactive and professional way.

Refusal by an investor, to take a loss falls under two headings:

1. Admit they are wrong? No Way!

Though not really avoidable, a loss is seen as a personal failure. This is a painful thing to admit for a large portion of traders, like it illustrates failure at life. It also takes away from their positive self image.

A trader like this experiences real pain from the loss, and would rather deny it than fess up to the fact that it is giving them the pain. Quite often it requires a total loss before he can begin to change. To quit trading is the only other alternative.

2. Taking that large of a hit would damage their portfolio greater than it can recover from.

But in reality, there's no such thing as just a paper loss. The stock (bond, option) is worth what it's quoted and the loss exists whether you realize it or not.

Both of these examples are a form of self-delusion that millions of investors, both large and small, suffer from. Just look at AIG, Merrill Lynch, WAMU, Lehman, etc. ... and you can take comfort in the fact that self-delusion is no respecter of income bracket or social standing.

Are you squirming in your seat because as you read this article you feel powerless and/or angry? That is a good thing. It tells you that you are ready to make the change.

Winning and losing traders have a different view of the pain from a loss, winners don't take it personally. They look at the loss and see that they need to change their approach or execution not that they are personally flawed.

Winning traders separate who they are from what they do. They know, or learn, that their trading faults lies in their approach or their skill level but not in their fundamental worth as a person. The pain they feel is quickly transmuted into motivation, which fuels their desire and determination to become a better trader.

You choose what to do with the losses, grow from the pain or give in and quit. Using the emotions for positive growth is what is important, not the fact that you had a loss.

Stay true to my tried and true ETF Trend Trading System and develop the habits of a winner. Apply yourself, ask questions, and observe your position size as it relates to your portfolio and your trading trends will move to the winning side.

"Proper Stops and risks" are main points in my program and reminding you constantly of that is an important part of my mentorship program. Once you have gone through my program completely and thoroughly understand it, you will still want me to tell you "Don't move your stop" and "Be sure to take profits when my system tells you to, not earlier or later" In fact the mentorship program is probably valued higher than the course itself.