“It’s not the daily increase but daily decrease. Hack away at the unessential.” -Bruce Lee
Quitting is not always the wrong thing to do. There is a time when you have to decide what you want and go get it, you do not stop until you reach your journey to your destination, this is when you are on the right path, following your passion, making progress, and loving the journey. There are other times to stop if you hit a dead end or you are heading in the wrong direction. People that eventually win learn to know the difference. There is a time to press through temporary pain to achieve long term success and a time to quit wasting your time with diminishing returns on a path that is just not working out and has little chance to work out because there is no joy, success, or progress on the wrong path.
Sometimes a marriage can not be saved through counseling it is just not going to work for many reasons. Sometimes a restaurant owner has worked 70 hour weeks for three years for the privilege of losing money and in deep debt, they are better off getting a job and at least get paid for there time and effort. No matter how much the Ford Motor Company believed in the Edsel or the federal government believed in the Chevrolet Volt they were making a mistake by continuing to produce them.
Cutting losses short is smart in all areas of life because it frees up resources to be used more wisely whether it is time, money, or energy.
Here are ten things that traders should stop doing where perseverance is the wrong thing to do.
- Quit letting trades go through your original stop loss, you were wrong, get out. When you start hoping and stop managing your stops you are losing money, losing discipline, and fighting a trend.
- Quit over trading, only take the very best entries and trade the very best stocks in your system.
- Quit making up stories about why you decided to hold your position instead of taking your stop when it was hit. Trade your plan.
- Stop trading your opinions and start trading what the price action is saying.
- Stop following people in social media that cause you to be biased and trade badly and lose money.
- Stop looking financial news networks for trading and investing advice, they are for news and entertainment.
- Stop trading so big that your emotions are more involved in your trades than your mind.
- Disconnect your ego from your trading. You determine your risk size and entry the market chooses whether you win or lose.
- Quit riding an emotional roller coaster, your emotions should stay level whether winning or losing. If not, trade smaller.
- Quit buying falling knives and shorting rocket stocks, wait for confirmation and a reversal before trying to short an uptrend or buy in a downtrend.
- Quit trading your emotions and replace them with valid signals.
- Quit having big losses and keep all losses small.
- Quit asking for trade ideas and start looking for a trading system.
- Quit agonizing over trading decisions and write a trading plan.
- Quit listening to traders who claim to know the future and start following traders who make money trading in the present.
Sometimes in life what you quit is more important than what you start. Quitting the wrong things frees up your time, energy, and passion to pursue the right things.