Every trader knows the golden rule…
Cut losers fast and let winners run!
Which makes sense on a quiet Sunday afternoon before the markets open. We tell ourselves confidently that this week we are gonna do that. But when that trade is open we do the exact opposite. We’ll sit there watching a losing trade bleed out like we’re waiting for some kind of divine intervention or something. We’ll move stops then justify it by telling ourselves “it’ll come back” but it hardly ever does. AND then the second a trade actually starts working??…..
We slam that close trade button like it’s about to self-destruct.
Tell me you’ve never thought this before…
“If I’d just done the exact opposite of my trades, I’d be rich.”
That’s not just a joke, it’s psychology because your brain is literally wired to prefer comfort over being right. Think about that for a second..
When a trade is losing, closing it means facing pain by admitting you were wrong. So you don’t close it and you hold, hope and wait for comfort to return. But when a trade’s winning, holding it means risking that comfort so you cash out early to lock in that relief.
We’ve all felt that. The inner voice like the devil on your shoulder. Causing impulse decisions in the moment that you later look back at and, from a now logical after the fact way of thinking, you can’t understand why you added to that losing trade, why you 10x’ed your revenge trade and why you closed that now 5R trade for 1R…
You’re not bad at trading. You’re just obeying the same survival instinct that kept humans alive for thousands of years: avoid pain, grab safety. The problem is that the market punishes both of those things and it rewards the opposite. Kind of like the emotional reverse.
So you should…
Cut a loser when it hurts the most to do so.
HOLD when it’s scary to lose what you’ve gained.
And that’s why the thought…
If I’d done the opposite…” stings so much.
Because deep down, it’s true!
The version of you that can act against your instincts is the version that will finally start to win.