Trading experience eliminates the reluctance to realize losses.

Discussion in 'Trading' started by anniecalvert, Jan 31, 2018.

  1. Is this true ?
  2. SteveM


    Not quite. Taking numerous, huge, and unexpected losses caused by lack of discipline over a number of years eliminates the reluctance to realize losses.

    "If a cat sits on a hot stove, that cat won't sit on a hot stove again. That cat won't sit on a cold stove either." - Mark Twain
    johnnyrock, Handle123 and comagnum like this.
  3. ET180


    I think it's probably true. Both statements, especially the second.
  4. Experienced traders are surgeons with a scalpel in their hand, or keyboard and mouse.
    Exceptional traders have the personality, or mindset, or a combination of a surgeon and a psychiatrist, psychologist, therapist.

    While Amateur traders have a candy bar frappuccino in one hand, and are sexting on their other hand. While listening to Britney Spears. or Kelly Clarkson songs. with a photo of their goofy family or dog on their desk.

    And I'm not being sarcastic or funny, it's true.
    I have literally stared at the faces of successful traders to analyze their subtle traits. They are basically average-looking, middle class, middle-aged males, who look square, and emotionless. -- or basically really boring to date, or talk to or hang out with.
    Hetty Green is the only female trader exception.
    Last edited: Jan 31, 2018
  5. toc


    Traders should instead be like "machine operators", switch on and wait for the run, switch off if stop or target is hit, although machine will do the later automatically.
  6. tomorton


    Yes its true. You gain the wider perspective: you realise that losing trades are inevitable, they're built into your strategy after all - but that does't mean they are mistakes. You realise the best thing to do when a situation has gone bad is not what we learn at school and in other professions - so there is no profit in focusing on the losers and trying to make them better and nursing them and studying them: instead, we cut them and get into a winner asap.
    anniecalvert and CaseyB like this.
  7. Handle123


    No matter of tens of thousands of hours studying, trying to be open minded and trying even stupid thoughts, concentrating on how not to lose, one day comes and BAMM, it is like worse when you stapled your finger onto the roof- that was a good one, ROFLMAO. You know at some point of trading life you have succeeded at getting decent, cause really stupid things I have done in my life I laugh loudly about it, cat putting me into trades as he loved playing with the mouse-making a sandwich and hear several times quickly "Order filled", WTF, I never put on that many, damn lucky cat knew more than me, LOL, GF drops by and knows not to come into the house cause am working and washes office windows in a bikini- LUNCHHHHH

    Yea, the one trade I "just knew it was going to come down", cancelled the $300 stop in Bonds, couple days it was minus $3,000, naw, flipping thing is coming down, ring ring, hello, margin call-what the flip is that? Yea, fast 10 grand right in toilet, Yea, that was the last time in 1991 where I was horrible stupid.

    There are right ways to trade without stops called hedging for long term, intra-day trading have a catastrophic stop twenty points away so if scalping not having to move stops around or cancel, have that catastrophic stops in in case you stub your toe or break your leg chasing the cat or GF and be covered.

    Longer you stay in trading, the loses get crazy big if you pushing it, at some point it just becomes like unexpected frustration, lasts 20 minutes, tonite another day. I use to think that studying losses was waste of time, but I was wrong, losses sometimes show they have established patterns as well.

    Well, fourteen minutes till Starbucks opens and last day of free coffee with my tumbler.
    Trade well all.
    SteveM and tomorton like this.
  8. Xela


    I think it probably is, for many/most people; yes.

    People learn from experience that losses are inevitable.

    The minority of aspiring traders who stick with it and progress also gradually come to learn (each at their own speed) the counterintuitive reality that minimizing the size of the losses tends to be far more beneficial, overall, than trying to minimize their number.

    A smaller subgroup of "aspiring traders", because of whatever-it-is about their own personalities and/or previous life-experiences, are so strongly instinctively averse to the existence of losses at all that they focus (perhaps subsconsciously, and often to the exclusion of almost all the other, actually far more beneficial and important issues) on "trying to get their win-rate as high as possible", thereby stacking even more firmly against themselves a deck which is a pretty difficult one to negotiate in the first place, for almost anyone. This is a bad and really counterproductive mistake to make, and it seems to me that the people most likely to make it also tend to be the most resistant to having it pointed out that they're making it. If I understood psychology at all (which I don't) I'd perhaps find that less surprising.

    Bottom line: statistics and probability are (to most people) strongly counterintuitive subjects, but some extent of mastering the relevant parts of these subjects (in different ways, for different people, and with great variance of the proportion of theory to practice in how each person eventually achieves it) is more or less a "sine qua non" of becoming successful over the long term. Whether people acknowledge that or not (and some really don't).
    Last edited: Jan 31, 2018
  9. qxr1011


    anniecalvert likes this.
  10. Roderick


    Obviously, it's impossible to save yourself from losses completely. You need to have an experience in order to reduce risks so they wouldn't affect your funds.
    #10     Feb 4, 2018
    anniecalvert likes this.