Admitting when you are wrong does not necessarily make you a better person. It does make you a better trader. You can’t hid from your losses. The longer you have thoughts or feelings that are positive about an action that produces a negative result the harder it is to change that behavior. Said another way, you never get caught the first time. I look at what happened with Tiger Woods or any celebrity that messes up and I have little doubt that if they did not get caught they would still be doing it. That is what makes the market different, it rarely rewards individuals for making bad decisions. If I do everything right I am not guaranteed to make money, it is because if I make a mistake I will have to pay for it. Maybe not in that trade but in terms of reinforcing behavior that eventually will cause me to lose money.
How not to handle losses.
I have told this story before but when I was going through a particular hard stretch earlier in my career I would be at my limit down by noon. Go home and sleep/drink wake up around 9 pm eat and then go back to bed. I thought my problems would somehow be solved if I ignored them. Not the case at all, as a rational person knows. I was obviously not in a rational state at that time. It turns out the problem was fixable. I was so miserable for no reason. One of the many times I have had to get out of my own head to get better. As it was said to me “the market introduces you to yourself”, you can own it or it can own you.
Something more important.
Trading is important to me but it does not define me. Part of the reason it was hard for me during that time is because I lost that perspective. I am also a son, brother, uncle, nephew, friend, and other things. Always remember when you are having a problem, more people love and care about you than you think and more people are having that same problem than you think.
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