Learn To Take Losses

Discussion in 'Risk Management' started by ironchef, Mar 18, 2024.

  1. taowave

    taowave

    Save yourself the time and trade butterflys off of 5 minute charts :)


     
    #41     Mar 19, 2024
  2. PPC

    PPC



    One of the problems is that our society has indoctrinated us into BS such as “winning is everything.” The consequence is that winners get respect, while being a loser is looked upon as inferior. Most of us bring this baggage into trading, and it can interfere with taking losses.

    The second problem is that when we go through the school system, we’re indoctrinated into being “right”, and unfortunately being good at trading has nothing to do with being right.

    Can you see the (unconscious) mindfuck caused by the two aforementioned indoctrinations to the average trader???

    The consequence is that most people take losses personally, and their ego gets in the way of trading.

    There are other factors, such as overconfidence, dangerous framing of losses (e.g., “Loss is not a loss until sell”), plus cognitive biases working against the trader such as the lotto bias (illusion of control), illusory correlations, selective perception, etc.

    You don’t need to know all the above; all you need to know is that all successful traders learned not to take losses personally; they fully accepted that it is a necessary part of the business.


    Regarding your two questions:

    Q1) What is your definition of the right way to take losses?

    • It’s a personal thing, everyone trades differently, but I’d suggest to always place a stop under a logical level (e.g., S/R, swing point, supply/demand zone, or whatever TA you use) where buyers/sellers would no longer be in control (where you know that you’re “wrong” and that you need to protect your arse).

    • This way your SL will be in the most logical place with the smallest Maximum Adverse Excursion (MAE).

    • If the stop level is hit, just get out, don't overthink it, it need to be automatic reaction !!!

    • If you’re intraday trader and you don’t trust yourself, put the stop in simultaneously when you place entry order.


    Q2) How do you practice and learn how to?


    • Fully accept the loss before you put on the trade !!! (Fully feel the pain before you enter the trade).

    • If you’re intraday trader, or put the sell order in when you enter. (if holding overnight, put the sell order in for during market hours only)

    • It’s not rocket science; just click the sell button, and do a happy dance, congratulate yourself that you’ve saved your arse.

    • Create an empowering metaphor to support you mentally.
     
    #42     Mar 19, 2024
  3. ironchef

    ironchef

    4 monitors tracking the same underlying or different underlying?
     
    #43     Mar 19, 2024
    murray t turtle likes this.
  4. ironchef

    ironchef

    Thank you for your very thoughtful responses and coaching. :thumbsup:
     
    #44     Mar 19, 2024
    PPC likes this.
  5. PPC

    PPC


    I need to learn English grammar. Any tips? :D
     
    #45     Mar 19, 2024
    murray t turtle likes this.
  6. Quanto

    Quanto

    #46     Mar 19, 2024
    PPC likes this.
  7. %%
    CATCHY TITLE, but really/ best Wise Worker$ Win
    That writer[Best Loser W......... LOL] actually admitted he did plenty of overtime @ JPM.
    Like the song says\ WE ARE Destined To Win /Jessy D @ BBC, London United Kingdom.
    ALL sorts of business things you can do;
    2 fudge pop tarts have about 72 % RDA sugar %%, in 2 ,+ 6 per pack=hog ratio LOL.
    Like Dave Ramsey says ''always look @ ratios '' LOL:D:D:D:D:D:D:D,:cool::cool:
    IF I eat any of those cut, may or may not , cut off the non fudge edge LOL\ that so called '' enriched '' edge LOL of the pop tart=white flour turns to sugar inside /so really more sugar than 72%:caution::caution:
     
    #47     Mar 19, 2024
  8. schizo

    schizo

    Is this one of them vegan propositions? I'm a PETA vegan, so why aren't you, dammit?!! :)

    As they say, it's not what you use, it's how you use it. 1 minute chart is fine and it's great for quick scalps.
     
    #48     Mar 19, 2024
    tomi01, ironchef and murray t turtle like this.
  9. I don't trade much options. Covered (out-of-the-money, near expiration) writes occasionally.
    My charts are all underlying somethings, commodities also. Always /CL, /GC, /ZN etc.
     
    #49     Mar 19, 2024
    ironchef and murray t turtle like this.
  10. %%
    LOL
    I seldom use a 1 mi, even a good volume stock like IP + not a stock tip, not enough volume for me to tell much LOL
    WOULD you catch a fallin' star\
    YOU know how people are \
    YOU KNOW , as it crashes to the ground\
    they dont liked it when its DOWN/LOL
    John A Song . > 2,077,777 vV hits . I thought you liked milk choc/that's animal juice:caution::caution:
     
    #50     Mar 19, 2024