Let’s talk about losing. Or rather, trading to lose.
Who would ever want to trade to lose?
Well, you’ve probably heard me and every other experienced trader say something like, “Never trade with money you can’t afford to lose!”
I know you’ve probably heard this a million times, but I don’t think most people really understand what it really means.
Because most people fall into one of two groups:
The first group are the ones who hear that saying and think, “Well, money is precious to me, and I couldn’t bear to lose a penny, so I’m never going to trade!”
And while that might seem like the responsible thing to do, I think it’s kind of dangerous.
Because if you’re not figuring out how to make your money work for you, you’re going to be working for your money till the end of your days.
The second group says, “Well, you only live once, and just imagine when this trade doubles or triples!”
They take trades from anywhere and everywhere… try to piece together information from all over the internet and then wonder why “trading doesn’t work!”
It’s almost like gambling to them, where it’s more about the thrill of rolling the dice than it is about having a methodical, sustainable approach to trading.
So what’s the right answer?
Well, there’s a third group of people — a much smaller group — that understands there’s always risk in trading.
And they understand that to manage this risk, the key is to place trades that let you “live to trade another day.“
Listen, we’re all responsible adults here — we know there’s no strategy that wins 100% of the time.
The market is volatile, and it will do the most unexpected thing at the worst possible time. That’s just the nature of the beast.
The key is to have a strategy that wins over time.
You have a set amount of trading capital, you never bet too much of it on one trade, and you basically go into every trade assuming it’s going to lose.
When you start with this mindset, it keeps you grounded and prepared for the worst, so you’re not devastated when a trade doesn’t go your way.
It also forces you to size your trades properly: If you only have a $1000 account, you NEVER want to place a trade that costs you $500 — no matter how much of a “sure thing” it is!
You see, the secret sauce isn’t in finding that magic strategy that never loses — because it doesn’t exist.
The real secret is never outrunning your win rate.
If you can keep your cool, if you can sleep at night, you’re doing just fine.
Trading is a marathon, not a sprint. The goal is to stay in the game long enough to let your edge play out over time.
This way, even if you hit a rough patch, you’re still in the race.
So, the next time you hear “never trade with money you can’t afford to lose,” understand it fully.
If you forget everything else I wrote here today, just remember this:
Embrace the idea that losing is part of the game, and manage your trades in a way that lets you “live to trade another day.”
Trade well — the key to winning is learning how to lose gracefully.
Always aim to be in that third group — the traders who live to trade another day.
Trade well,
Jack Carter
P.S. One of the things I’ve learned in nearly 40 years of trading is how powerful Wall Street money is. And one high-flying stock just got hit with a flood of money → Click here to see what I’m talking about.