Nov

30

 "When all you do is hope for the best, things have a way of turning out for the worst." Greg Satell in Forbes  about crazy John du Pont who killed Dave Schultz. The movie Foxcatcher is highly recommended. And the quote is very applicable to those nursing bad positions in markets.

Paolo Pezzutti adds his thoughts: 

When you start hoping to get even with a losing trade it is time to close it. It means there is no rationale to keep it open. It is your ego that won't accept defeat and you'll only make things worse keeping the trade going. The problem is that many times hope works and you actually manage to exit your losing trade decently. It is just that one time out of 100 when prices do not come back that they bite your jugular and kill you.


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  1. Jim Davis on November 30, 2014 11:14 pm

    Yes, well , one way to prevent that is to let no position be so large that it CAN kill you.

    Of course, this makes getting very rich problematic, since few are smart enough to make large sums on small positions. But it also reduces the likelyhood of living out of a cardboard box to a respectable level.

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