Friday, August 19, 2011

gulee教导(4)

Thank you for sharing your experience! It's always a good idea to sell when you have a loss, because no one can predict future, it's only in hindsight we see a bottom or top. It's this hope of tomorrow's reversal/bottom/top, which always came too late, that kills most traders when they should but hesitate to take the small loss. "First loss is always your best loss!"

Even you sold at the bottom, so what? You have demonstrated discipline by taking actions instead of waiting on hope, you will begin to trust yourself more and you will trade/invest with more confidence, and all you have lost will come back to you many folds! Self-trust and confidence just like discipline are critical in trading.

As I mentioned before trading well by following rules with discipline, not trading profit or loss, should be the standard we use to evaluate ourselves and our trades, because we have no control of how much market is willing to give us, but we do have control of how much to lose.

Our mental state and emotions distort our perceptions, subsequently our judgements and actions, so when you are in a stressful situation, such as job loss, depression, or hospitalization of loved ones, you should liquidate all your positions or buy insurance (puts options) to protect your long term investment. Don't trade with real money until you are in the right mental state. There're always plenty of opportunities to make money in the market, and the market will always be here when you feel better and come back, I promise.

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