How to accepet a loss

There are many books written about how to make money on the market. Some of them are still written by people who have made money as traders! What you rarely see are books or articles written about how to lose money. "Cut your losers and let your winners run" is the common sense advice, but how to determine when a position is a loser? Interestingly, most traders I have not an answer to this question when a position. They focus on the entry, but have no clear idea of the exit, especially if this will turn them into the red. One of the real culprits, I must believe, is the difficulty for the operators to the reality of a loss of trade of psychological sense of feeling like a loser to separate. At one level, many traders as the loss as a loser. It frustrates, press them, make them anxious, short, it interferes with their future decisions, because their P & L is a blank check written against their self-esteem. Once an entrepreneur is egocentric and not the target market, distortions in the decisions are inevitable. A section especially valuable memories of a classic Stock Operator Livermore describes the approach of buying shares. It would amount to sell and see how the stock responded. He would do it again and again, testing the underlying demand for the issue. When the sales are not the market pushing down, it would aggressively move to the side that you can buy and make money. What I like about this method is that the loss of Livermore was part of a grand plan. It was not losing money, he paid for information. If my position size up to ten commands in the ES and I buy a track record with a one-party, expect a tree, I am testing the waters. Although I am not moving the market potential in the way Livermore, I could always start with a test of my hypothesis in small groups. When I looked carefully. How are the other medium to at the top of the range? How the market absorbs the operations of the sellers? Like any good scientist, I am collecting data to determine whether my hypothesis is supported. Suppose that the escape does not materialize and the original motion on the range falls within the range has increased some selling pressure. I take the loss of my party, but what happens from there? The operator is not selected in response to frustration: "Why do I always buy resort? I can not believe" they "walked into the market to me! This market is impossible to trade." Because of this frustration and self-focus-associated operator does all the wrong information away from this trade. In the Livermore method, but kept the operator, the loss of a lot to see as part of a larger plan. When the market broke nicely on the rise would have reduced the trade long and probably made money. If the party was a loser, he has paid for information that is at least a range-bound market, could emulate a place to turn and briefly to take advantage of an available back to the bottom of that range . Look at it this way: If you have a great chance to put business and trade does not make money, you pay for an important piece of information: The market will not perform as it was historically normal. If a solid piece of economic news that would normally send the dollar higher yelling does not increase the money and frustrates your purchase, you have just bought some useful information: There is a fundamental lack of demand for the dollar. This information could be many more potential profit than the money lost in the first trade. I recently received a copy of an article in Futures Magazine on the retired businessman Everett Klipp, nicknamed "Babe Ruth of the CBOT. "Klipp was not only distinguished by its record fifty years of successful commercial land, but also by his mentorship of over 100 merchants. Speaking of his system of short-term trading, Klipp observed," You must love to lose money and hate to earn money to be successful. It is against human nature, what I learn and practice. You must overcome humanity. " Klipp system was quick to profit (hence the idea of hate money), but even quicker to take losses (love losing money). Instead of viewing losses as a threat, Klipp treated as an essential part of the negotiations. Take a small loss reinforces the sense of a trader discipline and control, he says. Losses are not failures. So here is a question I ask you all to a high risk of the trade: "What will tell me that my work is bad, and how can I use this information for later use?" If you negotiate Well, there are no losing trades: trades make money and jobs that give you the information to make money later.