The importance of admitting when you are wrong
It’s been said many times that the
most important thing you can do as a trader is to preserve your capital.
Use stop loss orders, and don’t lose money. Not surprisingly, I happen to agree
with that.
The thinking is, of course, that as long as you limit losses
when you’re wrong, and let the “right” ones run, you will, over time, be a
profitable trader. But this alone won’t do it. It only pertains to the mechanics
of trading. And as we all know, there is also an emotional side to trading.
Unless we can also conquer this, we will never be successful.
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