Living to fight another day is the trader’s motto and should be what he or she recites on a daily basis. There are going to be times, many times, where a trader makes a bad decision or trade and must decide what to do from there on. We have all been there and will be there again in the future as certain as the sun will rise again. What’s the best way to survive?
Check Your Ego at the Door
Ego is the one thing that gets most traders into trouble. The inability to admit a mistake has doomed more traders than anybody can count. Some think that it’s not actually a mistake if you don’t sell and wait for it to come back. That can be a disastrous strategy as the market can stay irrational longer than you can stay solvent in the words of John Maynard Keynes.
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