Is it taking a loss?
Lots of traders say that they learn more from their losses than their gains. This has always seemed stupid to me. But I just read the following from the the disturbing book Goal-Free Living
The best things I have ever done in my career came shortly after I decided that the best thing that could happen to me is that they would fire me. As long as you are sitting there saying to yourself, "Shoot, if I do this I might get a bad review," or "I might not get a promotion," or "Someone might fire me," you are never going to take the risk. Instead, go and do what you want because you think there is value in it ... some of [these big risks in my life] did not pay off, but I never got beat up. In some cases they turned out to be big wins.
For a long time I have taught that stupid losses carry no benefit. I am wondering what I think now. What do you think?
Comments
"Stupid" losses are most likely a must for nearly all traders in the beginning. I've made every stupid mistake a trader can make (thankfully mostly not with real money... $150 of actual money lost)....sometimes repeatedly. However, the more I learn, the less I am able to make those stupid trades, and like most animals, I want to avoid painful stimuli. Chasing price, trading at the wrong time, not setting stops...letting emotions get the best of me..all those things I grew tired of and eventually grew out of....basically grew up. Maybe the rare person can learn the right way to trade, and never once have a stupid loss. But there will be losses, and perhaps having previous stupid losses is a primer for that inevitable loss. I'm beginning to learn that if I followed the plan, a losing trade can still be a good, smart trade.
Posted by: Jeanine | January 24, 2006 01:26 PM