STREET DOGS: Losing
Since most people have lost more money than they’ve made in the markets suggests that what they lack is knowledge about not losing money
From What I Learned Losing a Million Dollars by Jim Paul and Brendan Moynihan: Experience is the worst teacher. It gives the test before giving the lesson. There are as many ways to make money in the markets as there are participants. But there are only very few ways to lose. Apparently people have at least some knowledge about making money in the markets. However, since most people have lost more money than they have made, it is equally apparent that they lack knowledge about not losing money. A light-bulb manufacturer understands that two out of 10 bulbs will not work; a fruit seller knows that some apples will be foul. Those losses are expected. In trading, we don’t expect to lose when we enter a trade. Unexpected losses are hard to deal with. Acknowledging that losses are part of the game and accepting the losses are two very different things. Rules are hard and fast. Tools have some flexibility. Fools neither have rules nor tools. You can’t calculate the probability of having a...
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