You know, folks, trading stocks and options isn’t about being perfect — we’re not always right, but we’re never wrong in sticking to our principles.
Imagine taking a tough hit, like losing $4,000 out of a $5,000 position — man, that sucked. But hey, you can’t let one loss in 30 days or even 90 days get to you.
Losses come in two flavors: the ones where the trade just fails to take off and you cut it because it never climbs, and the ones where ego creeps in.
Yep, jot this down in your trading journal — cause of loss: I got full of myself.
Now, when a loss like that four grand stings, do you chase it by trying to win it all back in the very next trade — revenge trading — or do you stay true to your usual system?
Plenty fall into that revenge trading and or martingale trap, where they amp up the risk to snag eight grand next time, hoping to recover the loss and pocket extra.
Don’t try that, people — it’s a recipe for disaster.
Instead, how do you recover from a four-grand setback? Chip away at it gradually by sticking to your normal routine and trades.
Lessons from the Hedge Fund Days
Back in my hedge fund days, we had this running joke about a new trader — honestly, one of the worst I’ve ever seen.
He only got the gig because his brother was buddies with someone who knew me.
Anyway, he dips into a small short position on a stock, gets torched badly, and declares, “I’m never doing that again.”
I ask him, “What, never short stocks anymore?” He says yeah. So I hit him with this: “Well, did you ever burn your mouth eating hot pizza?”
Yeah, he admits. “And that didn’t stop you from eating pizza ever again, did it?”
Losses happen — it’s no reason to swear off a strategy forever.
Keeping Perspective and Discipline
A single slip-up like that wouldn’t shake my faith in a trader’s overall track record at all — it’s just normal in this game.
And it wasn’t even a huge wipeout — you kept the damage in check and didn’t let it snowball.
Folks, let me tell you, staying level-headed like that marks the most disciplined trader you’ll ever come across.
Yeah, that’s good stuff. Really good stuff.
Trade well,
Jack Carter
Jack Carter Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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