[quote=“Jaavos, post:1, topic:118333”]
I am beginning to understand how unavoidable it is to have losing trades. With those losing trades, since we are humans, there are bound to be emotions attached to those losing trades.
So, how do we as the "fragile’ investors we are, overcome these emotions?
I can imagine being able to control, or ignore, one’s emotions can lead to proftibale results! I would love to begin mastering these ideas or processes.[/quote]
In my humble little view of things, the root cause why losses become an emotional problem is not actually so much to do with the losses, rather it is due to a lack of confidence in making gains.
If the Pieman said to Simon every time you give me 20 dollars I will give you 100 dollars back then Simple Simon would be coughing up 20 dollars all day long…or at least as long as he had confidence that the Pieman would keep his word.
In the same way every business incurs some costs in order to achieve a profit. The key issue for every business is therefore, “can I make a net profit?”
For traders, it is the same principle. If you are not in the market, you cannot make a profit. If you are in the market you will sometimes make a loss. The only issue is does your trading method, combined with your risk/equity management, generate a net profit over a period of time - and do you have the confidence that it will do so.
When your confidence is sufficient that your trading business makes a net profit, then losses are nothing more than a component of making a profit - nothing to be concerned about or emotional about - just like any other business, we just try to minimise the costs (not avoid) - and maximise the gains. That is optimisation.
As Tommor also said: