By: Sterling Terrell
Trading is about being wrong.
You are wrong. You are wrong. You are wrong.
If not today, tomorrow.
In fact, you will probably be wrong most of the time.
Think of it this way: How often would you raise your hand in school if you new you would answer wrong half the time?
Getting into a trade you do the same thing though.
What an incredible psychological mountain to overcome.
What a humbling profession.
“One of the great tools of trading is the stop, the point at which you divorce yourself from your emotions and ego and admit that you’re wrong. Most people have a tough time doing this, and instead of selling out a losing position, they’ll hang on hoping that the market will realize the error of its ways and behave as they believe it should. This attitude is usually self-destructive, because as Joe Granville used to say, “the market doesn’t know whether you’re long or short and it could care less.” You’re the only one who’s emotionally involved in your position. The market’s just reacting to supply and demand and if you’re cheering it one way, there’s always somebody else cheering just as hard that it will go the other way.”
–Martin Schwartz, Pit Bull