%% Exactly MM. I enjoyed his easy example also; markets are not a lotto/horse race. I seldom go to movies anymore/ so loss on a movie ticket=-no problem/LOL.
the main thing is not to overreact, because any such loss is a good experience, and with experience everything gets better
The question how many you may to lose? In boxing there is situation when somebody after terrible fight or series of terrible fights is not able to continue more. They break. With the traders might be the same situation, after very bad period, when people might lose to many money, they can break and are not able to get back.
I constantly struggle with this. I normally try to only lose about $200 max, but then revenge trading kicks in and then I am down about $500 and super pissed at myself. I think I just need to stick to my planned options trades and stay away from instruments like NQ. I'm down $5K since March and not happy with myself about it. I am way too impulsive.
One of the hardest things to do for manual (point n click) traders is to merge risk management and psychology of trading into a working team. Most can not do it on their own and they need to trade in person with someone that's neutral and can help determine if its the home environment or something not related to trading that's sabotaging the trading. Sometimes its not the trade method nor the risk management...its just the trader. A trader that's not suitable for trading. Yet, if that trader is not able to put every thing together to work with their trade methodology... Its a trader that needs to see a trade psychologist so that person can determine how to put the pieces together so that it works together as a person / trader. In fact, any trader can sit down and add up their total losses or missed trade opportunities to see if it exceeds the cost of getting professional help. wrbtrader
Yes you said it right. It is important to analyze your mistakes and then make a good comeback instead of getting disappointed.
I don't know your approach. But If I were you I would decrease own size of trading. Try to trade micro contract (in case futures trading), or use less size in options. The fear and regrets which you have right now (about big losses) might conduct your opinions. If you decrease your losses till 10-20 USD per trades, you might be not so worry about it and it helps to develop better your trading skills.
Once my I asked my wife to be my risk management, and when she knew how many I lost per day, she didn't talk to me whole week. But I absolutely agree with it. The great champions always have coaches and big teams which help them to achieve aimes, why we think that is so easy to trade alone?