Take physic, pomp

Know when to take a loss

I just covered my RIO short at the first possible moment today (at $13.16) and lost money.

You can have a trade all mapped in your head, the functions, the logic, the cunning plan, the whole caboodle. Check those fundamentals, watch the note fading supply, draw pretty lines on a chart, wait for the right moment and make your trade. Dudettes and dudes, truly I say unto you; when the market decides to go the other way it just proves you wrong, wrong, wrong.

But the quicker you realize that you’ve made a mistake the better it is for your back pocket. I shorted RIO at $12.77 yesterday, so that’s 40c a paper down the drain. So be it. Do you still honestly believe that you can profit from every single trade that you make? If so, let me show you round my bridge one more time…it’s still on special offer.

Bottom line: A big ego will cost you money. Accept that you’ll be a loser sometimes. Embrace the fact, because it comes with the territory of being a successful investor.

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