- In my experience, when a new position goes against you, it usually keeps going down. Good trades start making you money right away.
- You can always get back in if you exit too soon.
- The takeaway is that you can never let a single losing trade wipe out any of your gains — they’re hard enough to get in the first place.
- If you don’t take the small loss today, you risk total loss of your capital or career tomorrow.
- Gains look like gains only to the extent that you keep your losses small.
- “Win it right back” is a death spiral. Keep your losses small, and you’ll never be in one.
- If you do not take action, you are choosing a more likely chance of feeling despondent when you lose a larger portion of your capital, compared to taking a guaranteed small loss. All the while you had the power to get out of a losing position, but you chose not to. You chose not to do the right thing because you were afraid to feel certain feelings.
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