I didn't mean for the thread to be useless I just wanted to see what people would say when there was a lack of content and just a principle stated. With that in mind the purpose of my statement is as follows. Scared money as I outlined it is really another way of stating your risk your willing to tolerate. I fully believe if people invested as if their portfolio had no monetary value and was just for fun they would have higher returns. There's some odd effect risk has on us to make the best decision. We don;t make bad or uninformed decisions, we just choose the safer outcomes.
What you have outlined is the reason why paper trading produces better returns than trading real money. However, I would like to add that while it is true that investors tend to be risk averse like you mentioned, they are risk-seeking in losses. This is probably the biggest difference in paper and real trading: on paper you will cut losses with no problems but once real money is employed all bets are off.
95% winners on PAPER. 1 out of 3 for real. If I would have let 2 run they would have been profitable. But then we have the cut losses small rule. What to do in this case. Scalp or swing, position trade?
true, the No.1 and the bottom line reason! this will lead to 1. " take profit too early" or so called cut winner short 2. "let loser run", hold on a loser like holding on to a lifeline the trader are not objective, the fear controls the trader
this week is very weird already 5 times i have caught myself taking trades based on emotion alone LOL, thankfully i still use stops, and thats another thing this week in the two days i have been stopped out more than a whole 2 weeks normal for me, i guess its the volatility, i hate it, i want it to end.
Volitility?? Are you joking? Its the last week in August, right before Labor day weekend. LOL Find something else to blame, volitility in the markets ISN'T a legit scape goat