I’m taking a wait and see approach in cryptocurrencies for now. I’m still contemplating ...
The Day I Watched Several Traders Implode (Part 5)
02/08/2008 12:00 am EST
The trader closed the door behind as he left without saying a thing. Let's see how the market treated them:
Once again, they were stopped out of their long position. And thankfully, no further knocks came at the door that afternoon, because the market continued lower, closing on its lows roughly 35 S&P points lower on the day.
One of the six traders lost all the capital in his trading account that day; several never recovered from the emotional impact this day had on them. The rest are still trading and the emotional and financial beating they took that day seems to have been taken to heart.
When you read about catastrophic losses by professional traders, remember: It could easily have been you! If you enter one trade and don't protect yourself by entering an initial stop, it could be you. If you add to a losing position, it could easily be you. If you are inflexible, entering trade after trade, because the market "must be wrong," it could be you. If you are out of step with the market, by all means stop. There will always be other markets and other days if you keep some of your capital. Unfortunately, even professional traders sometimes find themselves unable to stop trading and walk away, or find themselves unable to close a losing position because "loss is just too big."
If you remember nothing else, please remember this: once your capital is gone, you can no longer trade. If you love trading, you'll treat your capital as the precious resource it is.
|I wish you all good trading!||Part 1 | Part 2 | Part 3 | Part 4|
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