Why Great Traders Accept Losses Quickly

Steve Suminski on May 31, 2026

“Lost a lot of fights but it taught me how to lose ok.”

– Billy Joel (in Keeping the Faith)

There is a lot to learn about trading.  But learning how to lose?  Seriously?  Don’t most people have that on lock?  The key point is learning to lose ‘OK’.  Learning how to lose ok means:

  • Staying in the game
  • Keeping your identity intact (losses don’t define you!)
  • Absorbing the emotional damage like a pro
  • Controlling your actions in the aftermath
  • Acceptance

Getting it backwards.  When you compare the pro-level trader to the amateur hack you will notice a stark difference between the two.  Pros have a knack for stopping out of small losing trades immediately with enthusiasm and WITHOUT fear of missing out on what happens afterward.  Every moment of every trading day you are already missing out on great opportunities, so what’s so special about this one opportunity that so far has done nothing but cost you money?  Find another one or come back to this one later IF it starts to behave properly again.  Stops don’t have to be permanent.  If you love this trade for whatever reason, then consider your closing trade a temporary ‘time out’ until it ceases to act badly.   

 

Amateurs, on the other hand, love and embrace their losing trades so much that they never let them go.  They caress and hold them while they never stop believing in them.  They can’t ACCEPT psychologically that it’s just not working.  They believe falsely that only realized losses are losses.  Wrong.  Unrealized losses are also losses.  You must accept that.  Worse yet, they will sometimes DOUBLE DOWN and throw even more money at bad trades like a desperate person trying to save a bad relationship.  That trade never really loved you in the first place. 

 

What is the root cause of this?   The siren call of the ‘get rich quick’ dream is nothing new.  We’re weary of living our lives too long and too far from our dreams while wallowing in our past mistakes.  As Dave Ramsey said, “If you have made mistakes with money, that makes you older than three”.  We’ve all screwed up and can’t wait to fix it.  This leads to impatience.  Finding the unicorn trade by “getting in on the ground floor” of the next Nvidia via some penny stock that no one has heard of (accept you and the dude who sold you that newsletter) is hard to resist. 

 

How do I get on the right track?  Ahh.  Before you get on the right track, you first have to REALLY internalize that the right track IS the fastest track to success.  Channel your impatience into right track commitment.  That is a necessary step one. 

Then what?

  1. Know yourself.  What are your failure modes?  What do your big losing trades look like?  If you are afraid to look at them and thoroughly analyze them, how will you form a plan to make things better?  To get over your fear, try this.  Find a hat.  Any hat.  Call this hat your “auditor” hat.  When you are analyzing your losing trades, you are no longer yourself, you are a paid forensic auditor tasked with finding the lost money.  Separate yourself from the trade. 
  2. Silver lining.  Be determined to get your money’s worth from every single losing that you already paid for.  There is something of value hiding there.  Find it.
  3. Customize your plan.  Once you know what you’re doing wrong, create an action plan to avoid it in the future.  This might include: 
  1.  Using hard stops
  2.  Being more selective at trade entry (find multiple trades, rank them, and only trade the best)
  3.  Doing a better job of using alerts and monitoring your trades
  4.  Being more disciplined with the execution of your rules
  5.  Make better rules

 

What if discipline doesn’t work for me? I’m also addicted to Snickers bars.  What if I still can’t let go of my losing trades?  Here’s a possible hack for you to try.  What if you (in your mind) NEVER have a losing trade, but rather only execute needed UPGRADES to your portfolio?   That doesn’t mean trying to modify the existing bad trades but rather seeking to replace them with something better.  Go find a better trade!  Then, happily UPGRADE your portfolio by re-deploying the capital of the old trade into the newer, better trade.   Now go be a disciplined loser!