An important lesson

that I have learned after having distanced myself from trading:

It is that I am, in one sense, ‘wired to lose’. Being of a contrarian mind, I have a tendency to ask ‘why’, to look at the other side of the coin, stay away from the herd, etc. In itself, this isn’t a problem, but trading is as much about getting in as getting out, and looking at my trading behaviour retrospectively I can see that I tend to establish trades that are usually against the consensus or trend with the result that I often have to endure some pain in the short-term; however, when and if the trade eventually goes my way, I am way too quick to close the position, because the contrarian in me is again telling me that the consensus is wrong. I simply don’t give enough room for the trade to carry on. It’s absurd. I know I can’t have it both ways and I realise that I need to have less of ‘me’ in the trade. I’ve only just realised this, so it’s a bit late. Nevertheless, a useful self-analysis if I ever return to trading in a meaningful way.

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5 responses to “An important lesson

  1. masteroftheuniverse

    I once knew a guy that was a really nice guy who I really liked. Unfortunately, he was the worst trader I ever ran across in my life. He would bleed money in the pit, and almost went broke a few times. Since I liked him, I told him to fade himself. His first impulse would be to buy, so I’d tell him to sell. He’d end up being right for awhile, in the money. Unfortunately, he never knew when to get out of a trade, and lost everything.

    I’ve kept in touch with him over the years, and while he doesn’t trade anymore, he ended up living in a commune in Idaho.

  2. “I’ve only just realised this, so it’s a bit late.”

    What is that all about? Are you in your eighties? Come on old chap!

  3. All a bit glum , eh! I guess I meant too late in one sense only. I’ll probably come back to trading later in life in the full-time mode. I look forward to re-reading this blog when I do.

  4. masteroftheuniverse

    Your recognition of your state of mind is the first part of your recovery:)

    Jeff

  5. @C: Good news, then. Now I’m not feeling as lonely.

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