Losses
"Let’s say I’m down a thousand dollars. I think, "Oh God! I just want to get that back." You don’t want to end the day down a thousand dollars, so you’re not coming to the market to win anymore. Your attitude shifts and you’re now coming at it not to lose. Pretty soon you end up down $5,000 and you think, Oh my, God, that could have been a trip to Jamaica.
"All that time you’ve just been digging. But the first thing you have to do to get out of a hole is stop digging. And the best way to stop digging is to throw the shovel down. You just have to say, "I’m done for the day and I’ll come back tomorrow." It’s a brand new day. I’ve seen so many people take a really small situation, where they’re only down a thousand bucks or so, and they turn it into a loss of ten thousand dollars trying to get that one thousand dollars back.
"My stopping point is a four thousand dollar loss. If I’m down that much then I’m done. I just can’t stomach losing that much or I’ll start doing stupid stuff. I get away from the market. I go running or I work in the yard. Because if I’m sitting there watching the market, I’m still going to be involved and I might say, "Oh, wow, that’s a perfect trade! I have to take that." But I know that my mind is distorted at that point. It’s probably not a perfect trade. It doesn’t take me very long to get over it. Once I’m away from the market, I'll get over it pretty quickly, but if I keep staying there then the situation just gets worse, and worse, and worse."
-Brandon Fredrickson - Master Interview
from Innerworth.com |
