The Wolf Den #89 - Control Your Losses, Trades And More
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This newsletter is sponsored by 2 amazing companies: VOYAGER and PHEMEX.I use Voyager for my spot trading and investing (and to compound interest) and I use Phemex for trading with leverage. Sign up to both with the links above and get some free Bitcoin. I really encourage you to check them both out - you know that I never endorse a product that I do not use!Make sure to use code SCOTT25 after you download the Voyager App to get $25 in free Bitcoin.The one thing that you can always control in trading is how much money you lose.This is the most important, indisputable fact that you must accept if you are going to be a successful trader.You CANNOT control how much money you are going to make. A trade may never be in the green - you may never have the opportunity to take profit. What you can be sure of is where you set your stop loss and how much of a loss you intend to take when you do so.The only small argument against this is slippage or a failed stop loss - but those should be minor issues when planning a trade, and are not major issues on any liquid asset or exchange.People give numerous reasons for their stubbornness in not wanting to cut their losses. Cutting your loss is often more painful for your ego than for your wallet. People are narcissists. Trading is one of the only activities where we face the consequences of our choices in real time. To be a trader is to constantly face a mirror which reflects what we really are. There is no escape.In psychoanalysis, personal identity consists of 3 things: the Id (simply our unconscious), the Ego / Me (what we really are at one moment in time and the Superego (the limits that society imposes on us, our education, etc.). And to add spice to this delicate balance of contradictory forces which make up our personality, you need to add the ideal Me, which is what we would like to be. This is the idea of comparing yourself to the perfect outcome that I have discussed in the past.Trading reflects back at us, sometimes brutally, what we really are. With each position, we test the reality of the trader that we are, we test how our ideal Self compares to our true Self. Because of this, many traders will lose everything by not yielding, remaining inflexible faced with the markets because cutting their losses would be wrong and being wrong would damage their self-image. This would shatter their ideal Self and their Ego.It is for this reason that we sometimes find people who have been ruined in the financial markets but still can't stop telling you that they were right, that their analysis was good and that the market was either totally manipulated or that only idiots trade. It is simply a defensive reaction to protect their injured Ego. They do not want to look reality in the face, they avoid the mirror and so they need to find a scapegoat: the broker, the method used, the market itself, twitter influencer or the whale that dumped.It is a great accomplishment to be wrong and to accept it. I have rarely met people who are capable of saying: "I was wrong." Usually the prevailing opinion is that they were right but lost money because of an external factor. A person who can live off his trading is statistically exceptional - they are among only 5% of traders. They have accepted the reality that they are not perfect, they never will be, they will still be wrong hundreds, maybe thousands of times... and that being wrong is of absolutely no importance.You must be totally uninhibited with regards to failure. Doing this makes your management and abiding by your stops much easier. Far too many people combine their social status, their profession and their trading results with who they are. Most traders take a big loss and fall to pieces. Their psychological structure collapses. We are more than our jobs and what we earn at the end of the month is not our identity. I am not a better person or intelligent because I made $10,000 on the financial markets in the month, nor am I pathetic and stupid because I lost that amount.You have to stop identifying with it.You will know that you have made tremendous progress the day that a loss is no more than information like any other which doesn't change how you think about yourself. The same goes for a gain. A trader must strive toward psychological strength without weaknesses and for this there is no magic bullet - you have to work on yourself. Trading can be the path to becoming a more balanced, more accomplished person, more than the path to just becoming "rich." It can make you a better person, more capable of accepting and admitting when you are "wrong."It's all in your head.Plan your losses, accept them and move on. It's the only thing you can control in trading.CHARTS ARE AT THE BOTTOM! GMAIL MAY CUT THE E-MAIL OFF - MAKE SURE TO CLICK THE LINK THEY PROVIDE TO READ THE ENTIRE NEWSLETTER!What’s in this issue?How A Dollar Is BornDeflation 101BINANCE.US Is Live In Florida!International Monetary Fund Talks CryptoSnappa Moves to BitcoinGreyscale's LTC Trust Sees Wild SwingsThe Wolf Of All Streets Podcast Ft. Sahil BloomBitcoin Thoughts And AnalysisAltcoin ChartsLegacy ChartsPhemex + Stacked!Voyager - My Favorite Crypto BrokerMy Recommended Platforms And Tools
The Wolf Den #89 - Control Your Losses, Trades And More
The Wolf Den #89 - Control Your Losses…
The Wolf Den #89 - Control Your Losses, Trades And More
This newsletter is sponsored by 2 amazing companies: VOYAGER and PHEMEX.I use Voyager for my spot trading and investing (and to compound interest) and I use Phemex for trading with leverage. Sign up to both with the links above and get some free Bitcoin. I really encourage you to check them both out - you know that I never endorse a product that I do not use!Make sure to use code SCOTT25 after you download the Voyager App to get $25 in free Bitcoin.The one thing that you can always control in trading is how much money you lose.This is the most important, indisputable fact that you must accept if you are going to be a successful trader.You CANNOT control how much money you are going to make. A trade may never be in the green - you may never have the opportunity to take profit. What you can be sure of is where you set your stop loss and how much of a loss you intend to take when you do so.The only small argument against this is slippage or a failed stop loss - but those should be minor issues when planning a trade, and are not major issues on any liquid asset or exchange.People give numerous reasons for their stubbornness in not wanting to cut their losses. Cutting your loss is often more painful for your ego than for your wallet. People are narcissists. Trading is one of the only activities where we face the consequences of our choices in real time. To be a trader is to constantly face a mirror which reflects what we really are. There is no escape.In psychoanalysis, personal identity consists of 3 things: the Id (simply our unconscious), the Ego / Me (what we really are at one moment in time and the Superego (the limits that society imposes on us, our education, etc.). And to add spice to this delicate balance of contradictory forces which make up our personality, you need to add the ideal Me, which is what we would like to be. This is the idea of comparing yourself to the perfect outcome that I have discussed in the past.Trading reflects back at us, sometimes brutally, what we really are. With each position, we test the reality of the trader that we are, we test how our ideal Self compares to our true Self. Because of this, many traders will lose everything by not yielding, remaining inflexible faced with the markets because cutting their losses would be wrong and being wrong would damage their self-image. This would shatter their ideal Self and their Ego.It is for this reason that we sometimes find people who have been ruined in the financial markets but still can't stop telling you that they were right, that their analysis was good and that the market was either totally manipulated or that only idiots trade. It is simply a defensive reaction to protect their injured Ego. They do not want to look reality in the face, they avoid the mirror and so they need to find a scapegoat: the broker, the method used, the market itself, twitter influencer or the whale that dumped.It is a great accomplishment to be wrong and to accept it. I have rarely met people who are capable of saying: "I was wrong." Usually the prevailing opinion is that they were right but lost money because of an external factor. A person who can live off his trading is statistically exceptional - they are among only 5% of traders. They have accepted the reality that they are not perfect, they never will be, they will still be wrong hundreds, maybe thousands of times... and that being wrong is of absolutely no importance.You must be totally uninhibited with regards to failure. Doing this makes your management and abiding by your stops much easier. Far too many people combine their social status, their profession and their trading results with who they are. Most traders take a big loss and fall to pieces. Their psychological structure collapses. We are more than our jobs and what we earn at the end of the month is not our identity. I am not a better person or intelligent because I made $10,000 on the financial markets in the month, nor am I pathetic and stupid because I lost that amount.You have to stop identifying with it.You will know that you have made tremendous progress the day that a loss is no more than information like any other which doesn't change how you think about yourself. The same goes for a gain. A trader must strive toward psychological strength without weaknesses and for this there is no magic bullet - you have to work on yourself. Trading can be the path to becoming a more balanced, more accomplished person, more than the path to just becoming "rich." It can make you a better person, more capable of accepting and admitting when you are "wrong."It's all in your head.Plan your losses, accept them and move on. It's the only thing you can control in trading.CHARTS ARE AT THE BOTTOM! GMAIL MAY CUT THE E-MAIL OFF - MAKE SURE TO CLICK THE LINK THEY PROVIDE TO READ THE ENTIRE NEWSLETTER!What’s in this issue?How A Dollar Is BornDeflation 101BINANCE.US Is Live In Florida!International Monetary Fund Talks CryptoSnappa Moves to BitcoinGreyscale's LTC Trust Sees Wild SwingsThe Wolf Of All Streets Podcast Ft. Sahil BloomBitcoin Thoughts And AnalysisAltcoin ChartsLegacy ChartsPhemex + Stacked!Voyager - My Favorite Crypto BrokerMy Recommended Platforms And Tools