Hi
This is my response to a post that a trader who I have some regard for made on his blog about the what happened when he got upset about losing a larger and larger amount of money when his stop loss is hit.
Apparently it became such an uncomfortable experience that he forgot all about why he was trading, forgot all about his success so far and forgot all about the fact his trading account was growing steadily overall.
All he could focus on was the loss, and the pain, and the frustration.
Here is my response … My Response to Chris Lees Blog Post
I am some what surprised that a loss of only 4% can give you so much mental grief.
Is it the 4% or is it the $ figure that the 4% is now up to (represents)
eg start with a trading bank of $10,000 then 4% = $400 (worth a couple of nights at a hotel ? maybe)
BUT now your trading bank is $100,000 and 4% = $4,000 (worth a quick trip to Bali ? maybe)
So even though the 4% hasn’t changed the $ dollar amount has changed significantly and all of us have to find where we are “comfortable $ wise” and make the necessary mental adjustments before trading above our personal $ risk value ceiling that I’m sure we all have deep down in our conscious/subconscious
If we find we can’t make that adjustment then we must keep our trading bank at level that keeps us under our personal trading ceiling (eg take all profits out over a certain level
Having said that trading is our “Business” and losses are just part of doing business (our business expenses) and should be “expected and accepted as such along the way
Thanks for sharing
ps….I havn’t hit my personal ceiling yet but I look forward to the day I do