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Very sorry for your big loss. Most traders had experienced similar losses. Some might have had even bigger losses. It’s a big lesson learned.
We have to accept the loss and take responsibility for it. In order to move forward, we must forgive ourself for the loss, and fight our natural urge to take “revenge” to get the money back. This is part of trading and we make mistakes (big and small), and we have losses. Experienced traders still make mistakes, but they tend to make smaller mistakes. They shed their gambling mentality and tend to be more risk averse. Protecting their capital is their number one job. Capital is the life blood of a trader or a business!
The lesson here is to always protect your capital as the number one rule… no compromise… even if we will miss big opportunities. There will always be opportunities in the market. Without capital, we cannot trade to make money. When we enter a trade we must protected our capital with a stop loss. The stop loss is last line of defense or maximum risk you’re willing to risk for the trade. When we enter a trade we think we’re right. When the trade go against us, we are stubbornly think we’re still correct, and that price will eventually come back and validate our initial trade decision. This is human nature… the mechanical stop loss is there to protect our capital from our own human nature within.
Now, since the big loss had already happened. We must be realistic about winning the money back. It’s a tough road ahead, assuming a big hit on the total capital. The saying goes, it’s easier to make small money with big money (well capitalized). It’s very hard to make big money with small money (under capitalized).
7% – 8% is the line in the sand… most good traders will draw the line at 2% – 3%. This way, you can be wrong 3 out of every 4 times and still live to trade another day.