This episode is about mastering the art of losing, based a lot on the book Best Loser Wins. And that statement is true, the best loser always wins.
I have been part of many platforms and seen the statistics of over 10,000 traders. The failure rate is high, but it is not because trading is difficult. It is because the approach is wrong.
Key takeaways
Assess your results after 10 to 20 trades, not after each one, so you focus on the process and not the outcome.
Passing step one and nearing a funded account tempts you to focus on results, and that is when everything falls apart.
A big win, big loss, or a run of either does not change the odds of the next trade, so drop the gambler’s mindset.
Each loss points to a flaw in your plan, but only if you follow the plan and treat every entry as a variable you can fix.
The deeper the drawdown, the more likely the trade was a mistake, so leave it or cut it, never add.
A trade going deeper into profit is more likely to hit take profit, so add to it or do nothing, but do not shrink it.
Change your approach
Most people focus on each individual trade, and worse, they let it set their mood. Lose and they are depressed all day, win and they are happy all day.
You started trading to be free, and now you are less free than before. That should not be the case.
The change is simple. Stop judging yourself trade by trade. Assess your results after 10 to 20 trades, because everyone can win a trade and everyone can lose a trade.
“Everyone can win a trade and everyone can lose a trade, so you assess after a series, not after each one.”
Do not let your mindset change between steps
A trader passes step one easily, then fails step two, or passes step two and fails to get the funded account. The market did not change in that month. Their mindset did.
Being close to a funded account makes them focus on the result rather than the process, and that is when it falls apart.
Whatever step you are on, execute your plan and manage risk exactly as you did in step one. The results show up by themselves. The only thing you control is the process.
Why best loser wins
A run of five losses does not mean the next one has to be a win. That is a gambler’s mindset, and it does not work in trading.
If you are managing risk and following your plan, a losing streak just costs a little money, and each loss outlines an issue you can fix.
That only works if you stick to the plan and treat every entry point as a variable. When something falls apart, you go back and see exactly which variable to fix.
Trade management brings it together
Think of a supplement that makes your issue worse. You would stop taking it, not take more. Yet in trading people add to a losing trade, increasing risk after their analysis went wrong.
The deeper you go into drawdown on a single trade, the more likely it hits your stop loss. So leave it or decrease it, and never add to a losing trade.
The opposite is true in profit. The deeper you go into profit, the more likely it hits take profit. So increase your risk on the winner or do nothing, but never cut it short.
Once your approach is right, compare prop firms on Propvator and pick one worth passing.