Thread by @team3dstocks

I have too many tweets on this. AVOID large losses at all costs. Large losses dont just set u back financially, they set u back MENTALLY. one single large loss not only erases days of hardwork, but it also fucks up ur psyche so much that it ALSO hurts your FUTURE trades.

It puts u in the "i gotta make it back" mentality, so u'll refuse to take profits on working trades even if u get an exit signal, b/c u'll compare the unrealized win to that BIG loss & think "that's not enough, i need to make more". Then u'll overstay & turn that win into a loss.

This will then lead to MORE frustration.. hurting your psyche even more. U'll then start forcing stupid trades, doubling size to try to make the loss back quicker etc, and since u're so mentally unstable, the next losses u take will be even bigger (since u're on double size)

This will then lead to u REFUSING to stop out since u'll look at the next unrealized loss & think "fuck.. i cant take another big hit. no, not again.. i cant take this pain again". so u'll wait for a reversal that'll never come, losing even MORE money once u finally stop out

Now u're down even deeper than u were after the 1st big loss that started this entire downward spiral. u're now thinking "maybe i need another setup", & u'll abandon ur original setup that was working JUST FINE, in search for a new holy grail setup etc. leading to more losses.

Now u're a broke bitch & have to refund the account.

Now u're trading scared on the new account b/c every little loss gives u PTSD.

Now u're scared to pull the trigger on GOOD setups & end up missing them.

now u stop out TOO early before ur stops hit b/c u're scared to lose

Notice how ALL of this fuckery started b/c u decided to take ONE single large loss.

THAT'S why im the biggest proponent of RISK MANEGEMENT (stop losses, trade selection, EXITS b4 entries etc)

Trading is defense FIRST (risk mgmt), offense SECOND (profit taking)

#BearTipOfTheDay