Hope you guys will enjoy this extract from old but famous book "Trading-For-A-Living by Elder".
When you go to an AA meeting, you will see people who have not had a drink in years stand up and say: "Hello, my name is so-and-so, and I am an alcoholic." Why do they call themselves alcoholics after years of sobriety? Because if they think they have beaten alcoholism, they will start drinking again. If a person stops thinking he is an alcoholic, he is free to take a drink, then another, and will probably end up in the gutter again. A person who wants to stay sober must remember that he is an alcoholic for the rest of his life.
Traders would benefit from our own self-help organization I'd call it Losers Anonymous. Why not Traders Anonymous? Because a harsh name helps to focus attention on our self-destructive tendencies. After all, Alcoholics Anonymous do not call themselves Drinkers Anonymous. As long as you call yourself a loser, you focus on avoiding losses.
Several traders have argued against what they thought was the "negative thinking" of Losers Anonymous. A retired woman from Texas, a highly suc*cessful trader, described her approach to me. She is very religious and thinks it would not please the Lord for her to lose money. She cuts her losses very fast because of that. I thought that our methods were similar. The goal is to cut losses due to some objective, external rule.
Trading within a businessman's risk is like living without alcohol. A trader has to admit that he is a loser, just as a drunk has to admit that he is an alcoholic. Then he can begin his journey to recovery.
This is why every morning before trading I sit in front of the quote screen in my office and say: "Good morning, my name is Alex, and I am a loser. I have it in me to do serious financial damage to my account." This is like an AA meetingit keeps my mind focused on the first principles. Even if I take
thousands of dollars out of the market today, tomorrow I will say: "Good morning, my name is Alex and I am a loser."
A friend of mine joked: "When I sit in front of my quote machine in the morning, I say, 'My name is John, and I'm gonna rip your throat out.'" His thinking generates tension. "Losers Anonymous" thinking generates serenity. A trader who feels serene and relaxed can focus on looking for the best and safest trades. A trader who is tense is like a driver who freezes at the wheel. When a sober man and a drunk enter a race, you know who is more likely to win. A drunk may win once in a while thanks to luck, but the sober man is the one to bet on. You want to be the sober man in the race.
Real question:
I make money in many consecutive successful trades but return them back to market in the next trade :-( Can't take small loss. I set stop but either remove them when price comes close or reload the position (revenge trading).
I read these literatures, tips and understand them but do the same mistakes (fading & position without stop) again. Hence still a LOSER...
I've few strategies in mind to fight with this issue but want to know if some of you've successfully overcome this issue? If yes - how?
:boxing: