Learn To Love to Take Losses

To be successful in Trading you need to learn to love to take losses. This sounds ridiculous to any non-trader or respectable member of society. In our culture we are taught to win. We even have clever slogans like "Winning is not everything, it's the only thing". People love to win and they hate to lose. To be a "loser" is certainly not a desirable trait.

Our Socialization and self preservation instincts have created an aversion to taking losses. In Trading taking manageable losses is the name of the game. The Hallmark of a Great Trader is not how he wins, but how he handles his losing Trades. Winning Trades can take care of themselves.

In the "Real World" people are paid and encouraged to come up with creative solutions to problems. This is why we recieve years of specialized education, degrees, and certifications. In the Movie "Fight Club" Brad Pitt says to Edward Norton: "Being Clever, How is that working out for you?" Clever In Trading will get you no where. It will cost you. You don't get paid any money for being clever. The law of Parsimoney is a scientific law that says "Let the Simplest Explanation Suffice". Less is More. The More complicated you need to make a trade exit, the more you think about it, The more I would bet you are losing more and more money.

In trading when we try to come up with elaborate solutions to our losing trades (telling ourselves it will comeback, adding to losers, hoping, waiting too long too exit, ect) We are selling ourselves on the outcome we would like to happen and not the likely outcome. We are still trying to win over ourselves subconsciously.

Everything in Trading is contrary to The Real World. If there is one word that best best describes Trading it is: Contradiction. It is so easy to look at past prices to think about buying at a lows and selling the highs. This is an illusion designed to again seek out a way to win.

Take the loss. Being able to accept and admit your loss is by far the hardest part. There should be a warning over every stock chart that says "Trading-Much Easier Said than Done". Good Traders know there are plenty of great trades coming our way. They don't waste energy, time or capital on losing trades. Being a "Winner" in the Trading World means admitting when you are losing, and cutting your losers quick.

If you can do that-Then You Can't Lose.