How To Become A Good Loser In Trading

No matter how small a trading loss might be, when it happens, it hurts.

First, there’s the immediate pain of seeing your account take a hit. That alone is unpleasant enough. But it’s quickly followed by frustration—the trade didn’t work out the way you planned. Sometimes that’s unavoidable. Black swan events can derail even the best setups.

Other times, with the benefit of hindsight, you can clearly see where you went wrong. And that realization can be just as painful.

Either way, losing trades are simply part of trading.

If you want to be a successful—and sane—trader, you must learn how to manage losses properly. That’s why risk management is so fundamentally important, and why we’re digging deeper into it here.

In the first instalment of this risk series, we looked at how the world’s best traders begin with a loss-minimisation mindset.

Instead of asking, “How much can I make?”

They ask, “How much can I lose?”

That subtle shift in thinking offers powerful protection in the markets. Sometimes, the best position you can take is no position at all.

But when the right setup does appear, you need a clear plan for managing risk once you’re in the trade. That’s where things get more technical.

Playing the Percentages

One of the most common mistakes new traders make is risking far too much on a single trade.

Some don’t even know how much they’re risking.

Others set a stop loss—but still expose a huge percentage of their account without realising it.

So what should you do?

First, always use a stop loss. Every trade, no exceptions.

This allows you to calculate exactly how many points you could lose.

That’s a good start—but it’s not enough.

You also need to decide what percentage of your account you’re willing to risk on any single trade.

Many beginners simply choose a stake that “feels reasonable”—say £15 per point. That sounds fine until you do the maths.

If your stop loss is 50 points, you’re risking £750.

On a £10,000 account, that’s 7.5% on one trade.

You may be comfortable with that, but it’s extremely aggressive. Most professional traders risk just 1–2% per trade.

Here’s how to calculate it properly:

Account size: £10,000

Risk per trade (2%): £200

Stop loss: 50 points

£200 ÷ 50 = £4 per point

So instead of trading at £15 per point, a sensible position size would be £4.

Now, let’s say the trade wins and you make £356.

Your account is now £10,356.

2% risk = £207.12

Same 50-point stop loss

£207.12 ÷ 50 = £4.12 per point

Each trade is recalculated based on your current account size.

Yes, this approach grows your account more slowly than oversized bets—but it dramatically improves your chances of staying in the game long enough to succeed.

Keeping Risk in Check

Over time, if you’re following a profitable strategy, your account will grow. Eventually, your 2% risk might translate into a position size that feels uncomfortable.

For example, you might be fine risking £20 per trade—but not £40.

That’s completely personal. Risk tolerance varies from trader to trader.

What matters most is that you understand risk, and that your position size always makes sense relative to your trading capital.

Trade too big, and a few losing trades—inevitable in any strategy—can quickly put you in serious trouble.

In the next instalment of this risk series, we’ll take a closer look at stop losses themselves, and why effective risk management requires learning from your losing trades.

In the meantime, risk management is something I cover in far greater depth during my free online training sessions each week.