For some traders, the only thing worse than losing a trade is missing out on a winning setup that they had spotted but had not taken.
I’m sure you’ve found yourself in this situation before:
A trading setup catches your eye, so you do your homework.
You read about the asset’s fundamentals, review its previous price action, and look at key technical levels. You even plot a general trading plan for your entries and exits!
But when it’s time to set your orders, you suddenly doubt the whole idea. You then decide to wait.
You place your entries at unrealistic levels, or you suddenly think of additional “market conditions” that have to be met before you jump in.
Unfortunately, the market waits for no one. Price moves on without you, and you find out that you had a winning trade idea all along.
OUCH!
You then remember that there are actual (but hidden) costs to not taking valid setups.
DOUBLE OUCH!
If the scenario above happens to you more often than you’d like, then it’s probably because of one (or more) of these reasons:
1. You just lost a trade
Maybe your account just took a huge hit, or maybe you’re in a trading slump. Because the sting of losing is still fresh, you’re perfectly willing to wait for the next available trading opportunity.
Being anxious about taking another setup after experiencing a loss is normal. The key is managing your risks so that you’ll still be fine even if you lose your next trade.
Remember to focus on the big picture so that you’ll see your long-term stats and not your short-term gains or losses.
2. You’re too afraid to lose money
The most common reason why traders are afraid to lose real money is that they’re risking more than they can afford to lose in a single trade.
When you’re risking too much, every trade feels like you’re gambling with your rent money. No wonder you’re paralyzed!
If you’re in this group, then you should consider risking smaller units or even going back to demo trading.
When you’re not worried about the money, you can then focus on sharpening your trading skills, and you’ll have a better chance at becoming a more consistently profitable trader in the long run.
3. You’re not sure about your analyses
Newbie traders who are feeling their way around a new asset may feel overwhelmed by the boxes that they have to tick, and often end up with analysis paralysis when faced with a valid trading setup.
Experienced traders don’t have it easier. They have to navigate through endless market updates, free and paid trading signals, and a boatload of impassioned “expert” opinions on Discord.
If you’re unsure about taking a setup but believe that it’s valid enough to risk some money on, then consider averaging your entries or having a tighter risk management plan.
4. You hate losing
If you hate losing as much as Millennials hate paying for multiple video streaming services, then I have four words for you:
WHY. ARE. YOU. HERE?!
Accept that losing trades are just business expenses. Remember that a losing trade does not make a bad trader. Bad trading habits make a bad trader.
If the fear of losing is enough to keep you from taking valid setups, or if maintaining a winning streak is more important to you than maximizing an opportunity, then you might want to rethink the whole trading gig.
Don’t worry, trading is definitely not for everyone. You might even do your bank account a favor if you cut your losses early!
5. You thought it more sensible to stay on the sidelines
Another reason why traders pass up on a valid setup is that they didn’t think it would turn out to be such a winner in the first place.
Keep in mind that profitable traders don’t need to take ALL the valid setups, they just need to take the ones with the best reward-to-risk ratios and the best odds.
But hindsight is 20/20 in trading.
Sometimes, the “promising” setups that traders take don’t turn out as well as they had expected. Similarly, setups that traders have brushed off as “not worth the risk or effort” can turn out to be the biggest winners.
As long as you follow your tried-and-tested criteria and stick to your trading plan, then missing one winning trade shouldn’t break your heart. Much.
The Bottom Line
Profitable traders don’t catch every winning move. They just consistently execute on high-probability setups with disciplined risk management.
Your trading journey isn’t defined by a single missed opportunity, but by the consistency of your process over time.
Keep refining your approach, manage your psychology, and those winning setups will be there waiting for you.
