Thread by @Fxflow

So @MPX_Trader asked me why we are so bad at exits. Let me start by noting that what I am about to say applies foremost to men, especially to high testosterone men which are the biggest part of trader demographic.

These points are also applicable to women but less so. (My wife, for example, is infinitely more patient in holding positions).

Now, while we all have a patina of civilization about us - the truth is that we are EXACTLY like our ancestors on the African plain who had basically two goals every day - survive the threat from animals and other tribes and find enough food to live.

To this day ladies when you ask us what we are thinking this is about it.

Which means that all and any attempts at "discipline" will fail. This is not something we can "fix". We are hard-wired to take our pips NOW, because the next moment may not exist.

So the only way to combat this issue is to engineer some sort of exit structure that eliminates the threat of "missing out on profit". I do this by doing a short exit/long exit structure even though it is not mathematically optimal.

Other traders I know will hedge out at the slightest hint of trouble. Regardless of what we do - its only an attempt. It's never a perfect solution. I override my algo all the time.

So, in summary, the reason we are so bad at exits is that we are afraid to die. And every stop-out is a mini death.
unroll please @threadreaderapp