No direction forecast on this profile, only a hypothesis.What is the historical odds of the scenario?
Monday, November 23, 2009
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Trading For A Living
World Famous
Cozumel , Mex
The Ultimate Ride
Trading In The Zone
What is the greatest risk you face in trading?
Is it loss of money?
Certainly, that's what most traders believe. I tend to disagree though. In my opinion we have something much greater at risk, that very few of us consider during the 'learning phase'.
The American political journalist and author, Norman Cousins, is quoted as saying,
'Death is not the greatest loss in life. The greatest loss is what dies inside us while we live.'
Along similar lines, I would argue that loss of capital is not the greatest loss in trading. The greatest loss is what we lose from within.
Loss of funds is recoverable. Losses of self-esteem, self-belief, or passion for the process of trading, are not so easy to recover.
So, think about that next time you feel tempted to widen your stop, or remove your stop. Think about it before you enter your next impulsive, emotion based trade. Think about it if you're trading without a clearly defined trading plan.
If you suffer financial losses at these times, how will it affect your mindset? Will the losses that result from your amateur and undisciplined actions allow you to move forward to the next trade with greater confidence, or will they feed the forces of frustration, anger, depression and fear, further damaging your chances at consistent, confident and disciplined application of your trading plan.
Drawdown in your psychological capital is much harder to recover, than is drawdown in your equity balance.
So, manage your risk! Not so much to protect your finances, but in order to protect your much more valuable psychological capital.
Your whole trading future depends on it.
Is it loss of money?
Certainly, that's what most traders believe. I tend to disagree though. In my opinion we have something much greater at risk, that very few of us consider during the 'learning phase'.
The American political journalist and author, Norman Cousins, is quoted as saying,
'Death is not the greatest loss in life. The greatest loss is what dies inside us while we live.'
Along similar lines, I would argue that loss of capital is not the greatest loss in trading. The greatest loss is what we lose from within.
Loss of funds is recoverable. Losses of self-esteem, self-belief, or passion for the process of trading, are not so easy to recover.
So, think about that next time you feel tempted to widen your stop, or remove your stop. Think about it before you enter your next impulsive, emotion based trade. Think about it if you're trading without a clearly defined trading plan.
If you suffer financial losses at these times, how will it affect your mindset? Will the losses that result from your amateur and undisciplined actions allow you to move forward to the next trade with greater confidence, or will they feed the forces of frustration, anger, depression and fear, further damaging your chances at consistent, confident and disciplined application of your trading plan.
Drawdown in your psychological capital is much harder to recover, than is drawdown in your equity balance.
So, manage your risk! Not so much to protect your finances, but in order to protect your much more valuable psychological capital.
Your whole trading future depends on it.
Posts
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2009
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November
(44)
- Weekend Long Term Perspective
- Wishing all a Happy Thanksgivings
- The One that Everyone else missed
- Day-Trading Account Performance
- Buy Limit FILLED at 1098.50 and 1096.50
- The Scenario Becomes Reality
- Another Low Risk Trade Executed from Sunday night
- Detailed Profile Compliments of My Secretary at Large
- Profile for Monday 11-23
- Example of Opening Swing
- 60min - View of the Trend and Projections
- Opt.Exp Friday Price Action Review
- Review Complements of Twitter
- Day 2 of Market Timing Strategy
- SHORT Position closed and reached Target as expected
- Low Risk SELL Setup
- Review for Tuesday Nov 17
- I-love-to-throw-counterfeit-money-from-my-helicopter
- Targets Above Monday's High
- Monday-November-16-Retail Sales
- Another Useful Study for Day-Trading
- New Research/Study
- Review of Friday's Price Action
- Another COHIBA Day....
- Resourcefullness helps in trading
- Reversal at Weekly Resistance
- Pre-Opening Game Plan
- After the Open Review
- Here is a not so brilliant strategy that worked li...
- Here is another brilliant strategy
- The Big Cash Pit Traded Index
- Here is the Recap of Friday
- The Long Term View from a Day-Trading Perspective
- Final Review on Payrolls ( NFP ) Day
- Continuation Of Review After The Open
- Pre-Market Plan For Action and Review on NFP Day
- Another Wrong Projection
- Fed Day Recap
- Review of Final Hours and Observations
- Review Of Pre-Close Price Action
- Follow -Up and Execution
- Pre-Market Plan For Action
- Review Of Price Action
- Market Action was both Humorous and Predictable
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November
(44)
My Lifestyle
- TraderTopGun
- Fisher Island, Florida, United States
- Placed First in The Strategy Runner International Trading Tournament and First in the Surefire Trading Challenge. The fact that you haven't heard of me is no surprise. I have never been comfortable in the spotlight and have purposely remain "underground". I don't write books... I don't try to get on CNBC, and... I don't go from city to city doing "dog and pony shows" so I can sell a room-full of people my overpriced,untested, piece of crap, blinking light, "black box" software. I'm a trader,a Pilot and an amateur ocean explorer. Trading is what I love and do as a profession. I also enjoy teaching and helping other traders get an edge.
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