Most successful traders have the ability to weather hard times with little or no emotional impact. They have learned to accept sporadic large losses and clusters of bad trades as part of the trading game. Their confidence during such periods remains unshaken, as they believe they will eventually recover if they stay true to their basic trading strategy.
Successful traders learned to avoid trying to catch up or double up to make up for losses. As a trader you must understand that a certain amount of losses will affect your judgment, so you must allow some time between a loss and the next new trade. The times when you least want to think about trading, during these losing streaks, are precisely the times when you need to focus most on trading.
One of the worst mistakes a trader can make is to miss a major profit opportunity. Almost 80% of all profits usually comes from 20% of all trades. Missing only a few such profit opportunities could have a dramatic negative impact on your performance.
What you can’t afford to do is to throw away your capital on low probability trades, especially during bad times. If you do, you will be too drained to trade correctly when the right trade comes along. Even if you put the trade on, it will be much smaller because your capital will have been depleted by the other trades.
After all is said and done, you have to minimize your losses and try to preserve capital for those few trades when you can make a lot of money in a very short period of time.