All together now:

"You got to know when to hold'em, know when to fold'em,
Know when to walk away and know when to run."
Kenny Rogers, The Gambler, 1978.

I'm not sure how much Kenny Rogers knew about trading Forex, Stocks, Shares or Commodities when he sang those words, but, in my view, it is the single best piece of advice to give an investor who is new to the financial markets. Regardless of whether you are trading Equities, Foreign Exchange, Contracts For Difference, Spread Bets or Futures, unless you know when to cut your losses you are doomed to failure.

I don't think there's a feeling like it in the world. It's not like a death, because you invariably live to fight another day. It's not like someone has beaten you up, because invariably it's your own fault.

And it's not like a divorce because the wife is still there when you get home. There isn't even anyone from whom you can seek consolation, because they will have absolutely no sympathy for you!

The 'feeling' I am describing is that lonely, soul-destroying, tortuous, depressing, gut wrenching, nauseating feeling you get when you're sitting on a losing forex, commodity or stock trade that has gone way beyond your normal pain threshold (and/or broken your trading desk limits!).

You promised yourself you would never put yourself in this position again, you did as much research into the trade as was prudent and you stayed within your limits when you entered the trade. "How could I have let this happen?"

You want to scream out loud, but you know it wouldn't do any good. Instead, the 'scream that no-one can hear' just gnaws away at your innards. You have it within your control to end the misery (by closing the trade), but you prolong the torment in the hope that "it will come back". It rarely does.

There are two consoling elements. Firstly, it happens to every single person who trades forex, stocks and commodities, whether they trade for themselves or trade for a bank - no-one is immune to it. Secondly, the feeling passes. I've never met anyone who didn't 'get over it'.

How you deal with it will determine how long you stay in the financial markets. No-one ever
leaves the party when it's in full swing.

Are we ready again?!:
"You never count your money when you're sittin' at the table
There'll be time enough for countin' when the dealin's done."
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