If the trader trades, he or she will inevitably have right and wrong operations.
To admit one’s faults is a sign of maturity and to understand that faults are part of
the way to success is an unavoidable step for the trader’s career.
The most interesting observations we should make are about the emotions felt after
a losing operation.
The first losing operation is normal, the second is annoying, the third makes you
angry and after the fourth, you start losing confidence in the method or in yourself.
And it is at exactly this point that the desire comes to recover the losses, maybe
with only one right operation.
From the probability point of view, you put yourself in a situation which is more and
more uncomfortable and difficult to satisfy.
If the fifth consecutive loss also arrives, usually the extent of this last one is bigger
than the sum of the previous ones, because of the higher amount of money you
invested or the higher risk situation you exposed yourself to, in the hope of
recovering the first four losses.The fifth loss exceeds the stress levels that the trader had fixed in advance and
furthermore it goes against the estimated acceptable risk ,because the trader was
not prepared to accept that fifth loss.
At this point the trader goes into shock and stops for a few days before regaining
confidence or before being simply drawn back by a dependence on the “gaming
table”.
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