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I approached a firm I knew that backed traders on the floor and they agreed to back me with 20,000 of trading capital. We would split profits 60:40 and I was set an initial daily loss limit of 500. If I hit my 500 limit the firm's floor manager would come and tell me to go home. The third day trading I lost about 3500 and nothing happened, no one came to ask me to stop trading. I felt very foolish, but continued to trade for the remainder of the week while avoiding any contact with the floor manager. The following Monday (the week's losses had totaled about 5000) I got a message to meet with the director with whom I had made the agreement (it transpired he had been away the previous week). I was sure that he was going to say that the deal was off. Instead, to my surprise, he told me how important it was that he could trust me, he needed to know that when the market was volatile he could trust me not to be racking up big losses. He suggested that I start afresh. Needless to say I was both relieved and grateful. 6 So I went back to the trading pit that morning with the determined intention to not lose more that 500. The next two weeks turned out to be one of the toughest periods of my trading career and one of the most rewarding. Stopping when I was down was hard. I realized that what had been at the root of my large losses was my inability to accept losing at all. To me losing was unacceptable. Such was my intolerance for loss that I lost for ten consecutive days. But as the days progressed, even though I continued to lose 500 a day, I found my mood lifting. I actually started to feel OK about losing as long as it was within my limit. |
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