Did That Make You Feel Better?
"You cry, I'm suffering severe pain! Are you then relieved from feeling it, if you bear it in an unmanly way?"
— Seneca, Moral Letters
Today's meditation is a reminder of something that can happen quite often, if you let trades run when they are going against you! There will be extreme emotion especially when you know you should've exited and didn't. It's so easy to be like a rabbit freezing in the headlights of an oncoming vehicle and before you know it you are staring at a much bigger loss and your mind tells you that you may as well let it run now anyway and hope that the trade miraculously turns back in your favour! Of course it doesn't and you are raging with pent up anger because of your stupidity in not getting out as you promised yourself you would do!
I have been in that very scenario many times in my early days of trading and learnt the hardest way possible, losing quite a few trading banks in the process! Getting angry, yelling, breaking something etc. etc. won't make us feel any better. We know exactly where we went wrong and we need to learn from these mistakes when trading.
When all is going well and your trades are going your way, it can be the best feeling in the world. However on those odd occasions where trades start to go against us, we have to act swiftly and ensure that our loss is controlled at no more than we allow in our rules and force ourselves to hit that button to get out of the trade without hesitation and in a heartbeat, before it's too late! Eventually, after you have done this on a few occasions, it will get easier believe me; but you have to work at it and execute your exit correctly, every time that you need to! When you see 5 or 6 profitable trades and a small controlled loss and your are profitable for the day because you were disciplined and bailed when you should have done, there should hopefully be no looking back! If you practice doing this, every time a trade is going against you, your bank will be protected and this in turn will make you a better and more profitable trader over time.