I will NEVER take a trade without having pre-accepted the potential for trade loss.

Because the fact is that MANY will lose.

<image: Pre-Acceptance of Trade Risk>

<image: Pre-Acceptance of Trade Risk>

Pre-acceptance of trade risk means that I am comfortable with taking the loss and will do so immediately without hesitation.

Pre-acceptance of trade risk means that I'm not overly concerned with the monetary loss and can keep my focus on the process of analysis and effective decision making.

My focus remains on process, rather than outcome!

<image: Pre-Acceptance of Trade Risk>

Ask yourself before entry, "Am I comfortable with this trade losing?"

If you're not comfortable with this trade losing then you've likely not yet achieved sufficient confidence in your strategy, or you're trading with too much risk.

You will likely hesitate to take the exit, ensuring a greater than necessary loss.

And you will likely carry some psychological baggage into the next trade, increasing the chance of poor analysis or decision making and greatly increasing the chance of further losses.

<image: Pre-Acceptance of Trade Risk>

<image: Pre-Acceptance of Trade Risk>

Before any trade, pause to confirm:

  • A full loss on this trade will not break any session drawdown limits.
  • A full loss on this trade is PERSONALLY acceptable. I am completely comfortable taking the loss and moving on to the next trade.

Because if either of these are not true, then you have no business taking the trade.

Good trading,

Lance Beggs


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  1. – The outcome of any individual trade means NOTHING
    – Pre-accept the risk. And take the trade.
    – Manage it. Forget about it. And move on.

    That’s it.

    Very good article, we need to hear it over and over again.
    Thank you Lance.

  2. I get so much from this article.
    1. Losers are part of the game.
    2. It’s so important to keep a good mindset after losses to capitalise on further price action.
    3. The re entry is so important. Don’t think “I’m wrong” and give up on the idea because I get stopped out.
    4. Even pros make “dumb trades” – again important to keep a good mindset and not beat yourself up.
    5. My trading is not radically different to yours. I need to work on re entries, keeping a good mindset after losses, fully capitalising on my winners.
    I will keep this article and re read it regularly.
    Thanks Lance.

    1. Thanks Steven,

      I’m glad you got so much value from this one. Let’s add point 6 to your list though.

      6. It never gets easy. We just get better at it.

      This mindset doesn’t come naturally. We’re not wired to think in probabilities. Nor to operate in such an uncertain environment. So as you work towards thinking more in terms of probabilities, be forgiving of any lapses. But trust that you will get better at it over time.

      Best of luck,

  3. You are one of the better writers about trading. You clarify your thoughts so well. I read an article you wrote about uncertainty years ago that helped me propel forward as a trader & I still read it once a month or so.

  4. As I am new in options trading I want to learn much of trading.As I enter the trade I get fear about loosing & if I get profit I couldn’t get it early & in loss I wait for recover & goes for maximum loss.

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