|Martin: I have a horrible migraine. Prison guard: A bottle of Advil is $750,000|
It's easy to lose sight of the dangers of trading when things are going well. A few good trades and you are invincible.
But it only takes one bad trade to wipe all the profit away.
Anybody remember KBIO?
A novice trader shorted the $2 stock. The next day it gapped up eight hundred percent. His account went from plus $36,000 to -$107,000 in one night.
In twenty-four hours his life changed to the point of cowardly begging for money on social media.
He should have planned like a stoic and practiced premeditatio malorum, translated as a premeditation of evils.
In other words, prepare for the worst.
If the above mentioned KBIO trader had planned like a stoic, he probably would not have taken that trade or he'd have at least position sized in a way that protected his account.
I know what you are thinking: that's quite the negative attitude.
Living as a stoic does not mean you are a negative person.
Think positively but prepare for the worst while planning for success.
Subscribe to The Market Speculator by Email and never miss a post!
If you would like to learn more about how I trade, receive my nightly focus list with market analysis, setups and trade alerts, sign up at BullsonWallStreet.com.