New Trader,Rich Trader 2: Good Trades, Bad Trades pdfdrive com

Chapter 2
A good trade is taken with a disciplined entry and position size; a
bad trade is taken to win back losses the market owes you.
“Ninety-five percent of the trading errors you are likely to make –
causing the money to just evaporate before your eyes – will stem from
your attitudes about being wrong, losing money, missing out, and
leaving money on the table.”
–- Mark Douglas
“I will be right back,” New Trader said, getting up from the company meeting
he was attending.
One of the other managers sent him a knowing frown as he left, but he really
didn’t care. The market was dropping, and it was all he could think about.
So, for the third time in as many hours, he pulled out his phone – which he
normally loved but hated the app’s tiny stupid buttons – and looked up his stock.
It had dropped another point, and his stomach dropped.
Pull out. His mind was screaming, don’t lose any more money! Forget the
signal, just get out now!
He gulped, his palms feeling sweaty… his plan said to wait for the signal, but
it had been going down all day and it was almost at the stopping point.
He pressed the buttons, feeling a migraine coming on. It was too late now,
though, and he had lost about $1,300. Well, that and the commissions.
When he left that day checking his phone, he could have smacked himself. In
fact, he almost did. If he had followed his plan, he’d have been up almost $1,000
and still rising.
Stupid, stupid, stupid! Follow the plan, not your fear!
He scowled as he drove to the little cafe he and Rich Trader usually met at.

---

Once he got there, he found his mentor and greeted him with a tight smile.
“Thanks for coming to meet me.”
“Well, of course. I do rather enjoy eating here, they have the best coffee.”
New Trader smiled at him, lest strained this time.
“What’s troubling you?” the older man asked, sipping his coffee as his eyes
searched for the waitress.
“Oh, it’s nothing, I just…” he began with a sigh. “I did it again. I let my fear
take over and I lost a lot of money; but if I had followed my system and waited
for the signal, I could have made money!”
Rich Trader shook his head. “But that’s not the most important part. It’s not
about the actual money gained or lost; it’s about discipline and controlling
emotional impulses. Though this is also a prime example of why you should
follow your system.”
“Yeah, I know…” New Trader said with a sigh, stirring the coffee Rich Trader
had already been considerate enough to order him. “But now it’s just… how did
you deal with losses?”
“Well, first I had to learn the hard way that I didn’t know better than the
market,” Rich Trader began with a chuckle. “I would sit here at this very cafe
and watch the market rise or fall, thinking I knew it all, that I could predict the
market better than my plan that I had spent hours upon hours making. Other
times the market would scream at me to go short as I continued to buy support
levels even as they broke one after another. Then it was all hope, not thought.
My predictions and my pride replaced the reality of what was taking place.”
He paused to take a sip of coffee. “And then you also have to consider what a
loss actually is. For me, a loss is not when I lose money; it’s when I don’t follow
my plan.”
New Trader smiled guiltily.
“So in that respect, it is very rare that I lose anymore. I might lose money, but
I don’t lose confidence. Ah, thank you, Jane.”
Their usual waitress smiled at him as she gave them both their usual: the
Tuesday special, minus the sauce.
“No prob, boys,” she said, winking at New Trader playfully as she left.
“She’s a rather nice girl,” Rich Trader commented and his younger companion
scowled.

---

“I have a girlfriend, thanks. Anyways, it doesn’t matter. How do I deal with
these strings of losses?” New Trader asked, taking a bite. “Well, unprofitable