The horrors of losses

Losses are inevitable in trading, I don't care who you are. -- what you have in your control is the amount of loss/risk there will be.

The key is to understand the risk. -- and make sure your trading plan isn't just considered betting up or down (and praying and hoping): :rolleyes: :oops: ...if that's what you're doing...consider yourself very lucky...just to break-even.
 
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that's all I do is take losses. All night, all week, sometimes all month. But I agree with you. Once that loss goes in the realized column it's gone forever. It can never be won back. But that doesn't mean a loss isn't a legitimate cost of doing business. Everyday I look at all those losses and think, "Man, that's a lot of money. I could have had fun with that." But when one of these positions takes off, all those small losses are forgotten.
 
There are two kinds of losses:
Those that are caused by volatility and those that are permanent loss of capital. The art is determining which is which.

Both are inevitable in portfolio management but one should focus on minimizing the permanent loss of capital kind and not worry about the volatility kind.
 
i960 said:
Your gain will be greatly reduce if you are not using leverage
More...
Do you ever think of why most participants in highly leverage product (forex in bucket shops and etc) loss their shirt? While this not happen to long term investors that use proper broker account?
 
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