Here’s a short comment that raised my interest in a recent email exchange:

  • “I hate the first trade of the day. Always worried I’ll have to start the day with a loss.”

It was not the primary focus of the conversation, so didn’t receive much followup discussion beyond sharing a couple of links which I thought might help. In particular the second half of the second post.

The fact is that a massive part of your success or failure in this business depends upon your ability to manage your mindset at those times when very little goes right.

So check out these links if you missed the prior articles. And all of the other posts they refer to.

Today though, let’s explore the idea from another angle.

“I hate the first trade of the day. Always worried I’ll have to start the day with a loss.”

Seriously… you’d better get used to first-trade losses.

Because they’ll happen a lot.

If you’ve got a 50% win rate, it’s reasonable to expect that one out of every two days will start off with a losing trade. Even if you’re achieving a 70% win rate, the averages suggest that you’ll still have three days a fortnight starting off with a loss.

So you’d better get used to it.

Let’s revisit a sequence of trades we discussed last week in the “Long is Wrong – 4” article.

<image: The comeback mindset>

<image: The comeback mindset>

<image: The comeback mindset>

Here’s the problem:

  • “I hate the first trade of the day. Always worried I’ll have to start the day with a loss.”

<image: The comeback mindset>

But there is another way.

(1) We first need to change our mindset.

We don’t fear opening losses. We expect them. And accept them.

See here for more on this –

It doesn’t mean we hope for them. We do everything we can to avoid them.

And if the market can gift us some opening wins, that’s awesome. But if not, it’s all good.

It’s part of the game.

(2) And then REFRAME what it means to take early losses.

<image: The comeback mindset>

I get to choose MY response.

And I choose to see this as a challenge.

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I choose to see this as a challenge.

An opportunity to prove myself. An opportunity to maintain focus and confidence and time my response to get this P&L back to positive territory.

With a mindset of acceptance and a reframing of early-session losses as a challenge, we’re more likely to properly assess the market and to develop insight into the nature of the prior losses. We’re more likely to remain patient while conditions remain unfavourable. And we’re more likely to have the focus and confidence necessary to strike decisively when opportunity presents again in the markets.

You are NEVER out of the game until your session stop is hit.

So embrace the suck. Reset yourself. And focus.

It’s comeback time. Show me how good you can be.

<image: The comeback mindset>

Again, if you skipped over the earlier links, here they are again:

And you might want to explore these additional posts, which also aim to strengthen your ability to cope with early-session adversity.

First trades will lose. Often!

It’s up to you to find an effective way to manage your mindset and move forward with confidence and focus.

Try to reframe the meaning of early losses. And instil a comeback mindset.

You may even find that you enjoy the challenge provided by a first-trade loss!

Happy trading,

Lance Beggs

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  1. Lol. Thought it was unique to me.
    I suck bigtime trading at the opening but somehow the loss allows me to reassess and then make a better trade.
    I noticed when I tried recovering the loss too quickly it usually ends to further losses.
    I believe that where your market analysis is superior to anything I’ve come across in assessing the sentiment of the market participants.
    It really puts things in perspective

    1. Key insight here – “I noticed when I tried recovering the loss too quickly it usually ends to further losses.”

      You’ve got to make sure the following trades come from focused market analysis and not from emotion and ego trying to avenge the loss. 🙂

  2. Hi Lance,
    In addition, keeping in mind that first trade or couple of winning trades in the begging of session does not guarantee that the session will be profitable at the end. The order of winning or loosing trades does not matter. As you always say, what matter is the outcome of group of trades. So a winning or loosing trade is irrelevant, what important is though how we managed those loosing and winning trades!

    1. Yes, there are never guarantees of profits at the end of the session, regardless of whether we start with wins or losses. What is important is ensuring our mindset remains effective, so that we place ourselves with the best possible chance of making quality decisions and actions.

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