Overcome Yourself - Lessons Learned from a $3,000 Loss

[TradeSmith Daily]( Overcome Yourself — Lessons Learned from a $3,000 Loss I want to tell you about my friend J.S. This guy invested and traded in the markets for more than a decade, and as impressive as his market and business acumen might be, my friend will tell you that he can be his own worst enemy. One of our recent discussions centered around a $3,000 loss he incurred in 72 hours. It started innocently enough. He had a trade he wasn’t monitoring as closely as he should have been, the trade started to get away from him, and the losses grew. At the same time, he was in a completely unrelated trade that wasn’t working out, but he did establish a mental stop-loss for this position. Rather than cut the position when it hit his stop, he made one of the most common trading mistakes you can make and “doubled down.” When losses get too large, it’s natural to put more money into a trade or investment with the hope that the losses will be recovered. One bad decision led to another, compounding the problem until it hit an extreme. Remarkably, the simplest way to solve this chaotic slide starts by admitting to our mistakes. RECOMMENDED LINK [Legendary Investor: “Prepare for the worst bear market of our lifetime”]( U.S. stocks have entered a bear market for the first time in over two years... And today, you must answer a critical question for your money: Now what? Some experts will urge you to “buy the dip.” But if you’re a student of history, you’ve likely already noticed the signs: - We’re suffering the worst inflation since the 1980s... - The worst simultaneous food and energy shortage since the 1970s... - And the worst stock market performance since 1939. The consensus is clear: This bear market is only the beginning. In fact, one legendary investor predicts it will be the worst in our lifetimes. [It’s time to protect your wealth – and get ready](. [Watch this and see how to move your money NOW]( Own Your Mistakes Every investor and trader I know — myself included — has made a mistake at some point. Even Warren Buffett, widely considered one of the greatest investors to ever live, has made mistakes. One costly example happened in 2014 when Buffett’s company Berkshire Hathaway Inc. (BRK.A) owned shares of the grocery chain Tesco. Tesco overstated its profits and sent the stock price sliding. Buffett didn’t act fast enough, and he later wrote that his “dawdling” cost the company a $444 million after-tax loss. The good news is that the mistakes we make are actually beneficial in teaching us valuable lessons. Through mistakes, you can more easily identify what not to do, which puts you on a faster path to finding out what you should be doing. But if you don’t own up to your mistakes, it can cost you. If my friend had not “doubled down” on his trades, he would have lost roughly $900 instead of $3,000. Yes. He would have still lost money in the trade, but if he recognized and admitted his trades weren’t going to work out instead of “doubling down” on them, he would have saved himself some money. That’s why setting up a trade log or journal is invaluable. It provides you with an unbiased look at your actions and the results. I also find it useful to regularly check in with myself during a trade or investment to make sure that I am following a plan. In addition, I try to cut down on mistakes by using technology. RECOMMENDED LINK [#1 pick of the month (Open now for details)]( If you are risk averse... [Do NOT click for details on this multi-millionaire crypto expert's #1 crypto pick for the month](. It’s not for the faint of heart. You’ve been warned. Use Tools to Cut Down on Mistakes Technology is our greatest weapon in the fight against mistakes. Rather than leave it up to human error, we move the decisions and executions to an unbiased entity. I pointed out to my friend the following trade that came out of our system on American Airlines Group Inc. (AAL), one of the stocks he traded for a loss. He can use this information to calculate his total risk AND the probability of profiting from the trade. Rather than letting emotions or constant punditry pounding from financial networks sway our decisions, we can turn to platforms like TradeSmith Finance to help guide our decision-making process. I like to point to the Bearseye signal our platform delivered right before market declines accelerated in 2020. I made plenty of mistakes over the years myself, but each new day offers a chance to work on improving. Recognize your mistakes. Accept that they happened. Make plans to reduce them. Take care, [Keith Kaplan]Keith Kaplan CEO, TradeSmith Announcement: You can say what you want about the banking industry, but the one thing we all know is that it’s not out to lose money. That’s why I wasn’t surprised when I heard Goldman Sachs was raising $2 billion to buy assets from a cryptocurrency lender. [There are opportunities out there if you have a guy like this in your corner to show you where to look](. P.P.S. You’re invited to join our Product Education Specialist, Kristin Magenst, for her free Rebalance Your Portfolios webinar. Today’s webinar will cover the Risk Rebalancer tool and how it can guide you to put the right amount of money into each position. This lesson will focus on the Risk Rebalancer tool available to those who hold a TradeStops by TradeSmith (Premium, Pro, and Lifetime), Trade360, Crypto by TradeSmith (Premium or Lifetime), or TradeSmith Platinum account. However, all are welcome to attend! [Click here]( to register for the webinar today, Wednesday, July 6. Our webinars typically begin at 1 p.m. Eastern and include time at the end for a question-and-answer session. We hope to see you soon! Best of TradeSmith The chart below represents the best-performing open positions over the last two years, as recommended by our software. [Download now on the Apple Store]( [Get It On Google Play]( [866.385.2076](tel:+866-385-2076) | support@tradesmith.com ©TradeSmith, LLC. All Rights Reserved. You may not reproduce, modify, copy, sell, publish, distribute, display or otherwise use any portion of the content without the prior written consent of TradeSmith. TradeSmith is not registered as an investment adviser and operates under the publishers’ exemption of the Investment Advisers Act of 1940. The investments and strategies discussed in TradeSmith’s content do not constitute personalized investment advice. Any trading or investment decisions you take are in reliance on your own analysis and judgment and not in reliance on TradeSmith. There are risks inherent in investing and past investment performance is not indicative of future results. TradeSmith P.O. 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