This is such an under-served topic and is something so many folks miss...we see it all the time and I just want everyone to realize how important it is. Even today we see major banks not controlling their loss'. Going in too large on a play and having to much exposure. I guess I just hate to lose money more than most, but I wouldn't go in too large even if the play was if the sun will rise in the east and set in the west!!!! Same thing goes for being too long or too short. It is a huge subject that people don't talk about enough. I've seen professional floor traders lose it all, newbie penny players lose it all, and folks in between lose it all - and IMO there is just no good excuse for it! Find the system that works for you, keep refining it, but also "know thyself" and our individual weakness'. After all, you don't have to be right even 50% of the time to make good money trading if you are willing to cut your loss' quickly. "Hope" is worthless in this game and I guarantee this - We will often be wrong!!! It is how we react to being wrong and the strategies we apply to limit losses that can ultimately keep our account growing or to make the account disappear - and it has happened to too many folks over the years because they had no strategy for being wrong. I don't know about the rest of ya, but I am smart enough to know how little I do know. But one thing is very certain - I HATE TO LOSE MONEY!!!!!! and I REFUSE to lose a big amount....EVER!
Everyone, on every trade, should be thinking of their strategy to deal with that trade going wrong - fail to plan for it and sooner or later, it will smack ya right in the pocketbook for sure!
