Before 2 examples: you are going to the cinema. You have 40 USD and you buy the ticket (price is 20 USD). Before entering you checked that you lost your ticket. Will you buy ticket once more? Majority says no. The other situation, you are going to the cinema and going to buy ticket, but found that you lost 20 USD. Will you buy ticket? Majority says yes. The same situation, but we have different feeling. In the first example we lost ticket, which we had bought (we HAD SPENT money yet), in the other situation we lost money but HAD NOT SPENT money. Despite the in both situation we lost the same amount we might have different feeling (opinion) about it. The other situation: you have 110 USD and bet on the races on one horse who might win about 100 USD. After you lose you still have 10 USD. And you see that there is new opportunity, one of the horse which is not leader but if you bet on it 10 USD you might win 100. Low probability that the horse win, but if it does it you can recover your money. Will you do it? The same situation, you have 110 USD but you bet only 10 USD at first time and lose it. You still have 100 USD, and you see there is the horse if you bet on it 10 USD, you will gain 100 USD. But probability is very low. Will you do it? As you understand there are mathematical approaches to the money management and psychological. There are some methods as Kelly’s formula, or methods of losing not more than 1 or 2% from the capital and they are not bad. But there is proverb, that piece of stale bread looks different depending on are we hungry or not. If loose “not many” we can control yourself and be cool in making decision, if we lose “many”, we might break all our rules and might drop down to the gambling and tilt state. Everyone has own parameter of “many” or “few”. Don’t try to start from big bets, because it will impact on your future decisions, you might lose control doesn’t matter whether you win or lose. Sometimes we really can’t control yourself losing money, but if this sum not so important it might decrease impact on our feeling. So we can control bets and size during trading and might increase our results much more than others skills. P.S. Examples were taken from researches of Daniel Kahneman.